A stroke of brilliance, a lifetime of cash

Updated: June 1, 2006, 8:11 PM ET
Associated Press

MALIBU, Calif. - "In Spirit, In Perpetuity."

That four-word phrase pretty much says it all for multimillionaire Ozzie Silna, one of the architects of arguably the best sports deal - and maybe one of the best in the annals of all American business - ever negotiated.

Silna isn't renowned like Donald Trump or Bill Gates, or even as well-known as NBA owners Mark Cuban or the Maloof brothers. But any of those magnates certainly would be proud to have their name associated with the coup Silna, his brother Daniel and their attorney, Donald Schupak, pulled off 30 years ago this summer. So far, they've netted appoximately $168 million from their ownership of a struggling team during the final days of the American Basketball Association.

And there's no heavy lifting involved, no fat payroll checks to write. In fact, there's no work to do at all. All they have to do is open the mail.

"You've got to be lucky in a lot of this stuff," Silna said. "But you've got to see the stuff, too. If it's there, and you don't see it, you don't have a chance to get lucky."

Banking on the eventual merger between the ABA and NBA, the Silnas bought the failing ABA franchise in North Carolina for about $1 million and quickly moved it to St. Louis. They founded the Spirits of St. Louis in what was then the biggest American city without a pro basketball team.

After the 1975-76 season - the ninth year of a costly talent war with the ABA - the NBA relented and agreed to accept four of the remaining six ABA teams into the league. The Denver Nuggets, Indiana Pacers, New Jersey Nets and San Antonio Spurs made it. The Spirits and Kentucky Colonels did not.

Colonels owner John Y. Brown received a $3 million payoff from the remaining ABA teams.

Silna wasn't willing to go away that easily.

As part of a concept he had come up with months earlier, he negotiated to receive four-sevenths of a share of the NBA's annual TV revenue for as long as the NBA was around. At the time, it was worth about $300,000 a year. Today, that deal nets the Silnas and their attorney about $15.6 million a year. Overall, they've collected about $168 million since the merger, an amount that has grown mightily through investments.

An incredible deal? Of course.

"But remember one thing," Silna said. "Had we been admitted into the league, what is the value of those teams today?"

Today, the value is around $300 million, but that's only if the owners are willing to cash out. By owning teams, they deal with expenses - most notably, payrolls that run anywhere from $50 million to $120 million a year - all of which makes it a chore to net even a few million dollars profit in any given season.

"Every five years, someone calls up with this story and it puts a dagger in my heart," Pacers president Donnie Walsh told the New York Times a few years ago.

Silna, meanwhile, reaps the benefits. He and his brother are set for life, the result of the gift that keeps on giving. The four former ABA teams used to make buyout offers. About 25 years ago, they offered $5 million over eight years. Silna wanted $8 million over five years. No deal was struck. Guess who came out on top in that one?

"I got into basketball not to make the money," Silna said. "I got into basketball for the thrill of owning the team, and to make money at the same time."

Now that he's got the money, the 73-year-old textile magnate doesn't just sit around counting it. He is an active environmentalist in his hometown of Malibu, the small beachside city in Los Angeles County set at the base of the mountains overlooking the ocean. It is one of the few spots left in that populous area that still has green space.

His house is gorgeous - an English Tudor sitting on a hilltop near the Franciscans' scenic Serra Retreat - but the parcel of land he's most proud of is a brown vacant lot that lies downhill, across from the ocean and the Pacific Coast Highway.

Working with government over the last nine years, Silna was able to preserve the 21-acre parcel and keep it from being developed for business. He wants it to be used for watershed restoration for Malibu Creek. His ability to maneuver through the political and legal landscape of Los Angeles County land issues has earned him the respect of his neighbors and even some who might be considered his opponents.

"If I've learned anything from this man, it's that once Ozzie believes that what he's doing is right, Ozzie is tenacious," said Steve Uhring, a friend of Silna's and president of the Malibu Coastal Land Conservancy. "He was a huge force in getting that piece of property and using it for cleaning up environment, versus providing Malibu with another T-shirt shop."

Silna downplays the brilliance of the deal he and Schupak dreamed up 30 years ago. In fact, Silna says, the basis for it came months earlier when only seven teams - the final six and the Virginia Squires - were left standing in the ABA.

League owners figured a merger was coming soon and thought six teams would be allowed and one would be left out. Silna wanted to be equitable to the owner who was excluded. He assumed it wouldn't be him.

"I told the owners, `We're all in this together," Silna said. "I thought that seventh team deserved the same benefit as the other six. That's how we came up with the one-seventh" figure.

The Squires, however, didn't make it through the next couple of weeks. A few months later, when the negotiations began, Silna and Schupak applied the parameters they'd set up for the Squires to themselves. One-seventh times four - four teams were admitted to the NBA - equals four-sevenths, which is the cut the Silnas get each year.

"You try to live by the Golden Rule," Silna said. "Some people say it's the best deal ever done. I just looked at it as a way of being fair."

Not that he hasn't cut a brilliant deal or two.

Thirty years before the ABA deal, Silna was running his parents' textile company while they were on vacation overseas. Presented on July 1 with a government request for a huge embroidery bid for military uniforms, he saw no way their small company could fill the order in such a short time.

His brainstorm: At the time, textile unions took three-week summer holidays beginning right after July 4. Knowing they wouldn't be producing anything for a while, Silna called around the country before the vacation started and bought up all the material needed for the order. By the time he and several other companies had submitted their bids, only one could guarantee the work by the deadline. That was Silna's company, because he had cornered the market on the material.

The deal netted $980,000 for his parents' business - quite a surprise for mom and dad when they returned home.

"My dad said, `You run the business, and he gave me a $50-a-week raise," Silna said.

In the early 70s, Silna became one of the first to tinker in a new material. It was called polyester.

A huge profit from the sale of that business gave Silna and his brother, both big sports fans, the resources to make a run at a pro basketball team. After failing in an attempt to buy the Detroit Pistons, they decided to take a shot at the ABA.

They accumulated one of the most eclectic and unpredictable talent pools in pro sports - Marvin Barnes, Moses Malone, Maurice Lucas and even a young play-by-play announcer named Bob Costas. All of that made them a lucrative property when it came time to merge - not so much for the team they were, but for the individual parts they could produce, each of which would be scavanged by the original NBA teams, who were hungry for the talent.

"They wanted our players," Silna said.

And the Silnas got their money.

While he doesn't believe he pulled off the greatest deal in the history of American sports, Silna does concede to knowing that back in the 70s, the NBA's TV deal was vastly undervalued.

"We saw some room for growth there," he said. "We had no idea it would grow this much."

It has.

Thirty years later, Silna remains a basketball fan. When he can, he watches the playoffs on TV. The NBA's last TV contract with ABC, ESPN and TNT was worth $4.6 billion over six years, a value that has increased more than twentyfold since the 1980s, when Magic Johnson, Larry Bird and Michael Jordan turned the NBA into much more than it once was.

"Of course I like to watch," Silna said. "And I hope all the series go seven games."

Copyright 2006 by The Associated Press

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