The franchise they gave up—and the revenue they kept
When the American Basketball Association and the older National Basketball Association merged in 1976, four ABA teams entered the NBA. The Spirits of St. Louis did not. Their owners, brothers Ozzie and Daniel Silna, agreed to let the team fold rather than join the merged league.
The unusual part of the arrangement was what they received in return: a continuing share of national television revenue generated by the four ABA teams that did make the move. In effect, the Silnas traded an active franchise for a claim on money the NBA would earn as its television business grew.
Why a small share grew so large
A television-rights payment is money broadcasters pay for the right to show games. As the NBA reached more viewers and its broadcast deals expanded, the value of the revenue stream rose. The Silnas’ share was tied to that stream, so it could grow without them operating a team, paying its players, or bearing the day-to-day costs of running a franchise.
That was the key tradeoff: the NBA kept the Spirits out of the league, while the former owners retained a financial stake in the league’s future broadcasts. The terms proved far more valuable than a one-time payment would have been as professional basketball became a major television property.
The deal eventually produced hundreds of millions of dollars for the Silnas. Their story is a striking example of how, in a merger, ownership of a future revenue stream can outlast—and ultimately be worth far more than—the business that was surrendered.
