What is Digg?43 Comments
- Chicken, on 10/12/2007, -30/+65Good. ***** the NBA.
- Eeqmcsq, on 10/12/2007, -0/+33"The right to receive such revenues shall continue for as long as the NBA or its successors continues in its existence.
In other words, the deal lasts as long as the NBA does. "
Wow, what a deal. - tdp05, on 10/12/2007, -1/+19It's the NBA's fault, this should have been paid out ages ago, now these guys get a bunch of money to sit at home, no way they accept a buyout now, with how big the league is.
From the article:
"In 1982, after several years of cashing TV checks, the Silnas came close to accepting a new buyout. The NBA offered them $5 million over eight years, but the Silnas countered with a demand of $8 million over five.
The league balked at that number, so the Silnas have kept cashing in. " - wilf_brim, on 10/12/2007, -0/+12Damn. Wish I got money for not having an NBA team. In retrospect, it would have been far cheaper to keep the Spirts in the NBA until they folded, but nobody thought that the TV money would have been so big. But didn't anybody consider that this was an outflow that had no end?
- aywwts4, on 10/12/2007, -0/+12Does this continue after their deaths?
What a endowment fund that would become. - adinb, on 10/12/2007, -0/+7Wow. Just wow.
Goes to show that being a good businessman doesn't necessarily have anything to do with a MBA--it's all about being a shrewd investor and looking to the future. - johnnyOnline, on 10/12/2007, -0/+6wow, there's at least 5 NBA teams that I don't own... I want in!
- blueday, on 10/12/2007, -1/+7I think that was $8 million spread out over 5 years compared to $5 million spread out over 8 years, not $x million per year for that length.
- izzie2, on 10/12/2007, -0/+6The key line in the Silnas' TV contract that makes NBA executives cringe reads: "The right to receive such revenues shall continue for as long as (This is the part you forgot to read) >>the NBA or its successors continues in its "existence"."
- ChrisPikula, on 10/12/2007, -0/+6So one person getting lucky and having money while the rest live in squalor is better?
- MGorgon, on 10/12/2007, -1/+5Wow, if he has any kids and they pick this one up...holy cow
I can't believe the lawyers can't find a loophole though, this will be an interesting story to tell your grand kids about, whether they like the NBA or not. - DROB003, on 10/12/2007, -5/+9This is really interesting and an issue in which I had no awareness....bigg digg
- christoscamaro, on 10/12/2007, -3/+7I don't care for sports personally, but this was an interesting article regardless.
- Lifestory, on 10/12/2007, -0/+4it consists of a little bit of luck too.. if NBA had agreed on a $8 million dollar buyout, things might have been different. But hell. that's still alot of cash!
- oooo, on 10/12/2007, -2/+6@deanlowe
"$5M x 8years = $8M x 5years."
Not quite true, present value of a lump of cash is in most cases more than future value of the same lump. So $5M today is worth more than $5M in 5 years time, and that is worth more than $5M in 8 years time.
So getting $8M a year in only 5 years they'd be better off than getting $5M a year over 8 years. Plus you have to count that they have an extra $3M to put to work for them in each year. - deanlowe, on 10/12/2007, -0/+3You're right, I wasn't paying attention when I skimmed through it. $40M would be an insanely large amount to pay during the early 80s. But the NBA was stupid to turn down the counter offer though.
- bpapa, on 10/12/2007, -4/+7holy crap. i've been an nba fan forever and never knew this. cool article.
- zclip, on 10/12/2007, -0/+2It said, the contract goes for as long as the NBA exists - so yeah, if they can somehow pass the contract on I don't see why not.
The deal may be easier to break then, but who cares. They will already have made hundreds of millions of dollars. - frogpelt, on 10/12/2007, -3/+5It wasn't luck, it was shrewd business. And the rest of us aren't living in squalor either. Have you checked out a third world country lately? The most poverty-stricken in our ghettoes have more than the middle class in a lot of countries.
Capitalism Rocks! As long as you're willing to lift a finger and use a brain cell every once in a while. - geronimo, on 10/12/2007, -0/+2That's an expensive lesson.
- DannoHung, on 10/12/2007, -0/+2Hahahha, always get a piece of the gross!
- inactive, on 10/12/2007, -0/+2Pays a lot more than not farming. Just goes to show you athletes are overpaid!
- Visceral, on 10/12/2007, -5/+7Haha, wow, that's an awesome story!
- ph23man, on 10/12/2007, -0/+1The NBA has spent tons and tons of advertising and marketing over the years to build their brand equity, I don't think they're just going to drop it. I think for them to develop a new name and brand would cost them more than what they're paying out now.
And that really is an awesome deal, very stupid on the NBA's part back in the day. Never say never but in business never say forever. Even if at the time TV revenue was minuscule, I can't believe they agreed to an indefinite payout period. - theotherme, on 10/12/2007, -0/+1The NBA could fold and reincorporate under a new name to break the contract. Although excessive, it would still break the contract.
- canewediggit, on 10/12/2007, -1/+2what a great lesson for all entrepreneurs (kevin, i hope you read this article). if/when you sell out, always make sure you get a piece of the back end.
oh, @ chicken- go ***** yourself, how about that? the nba is doing just fine without you. - frogpelt, on 10/12/2007, -0/+1The Artist Formerly Known As "The Artist Formerly Known As Prince" did it.
- pkulak, on 10/12/2007, -0/+1Im pretty sure they've thought of that. Seems like it may be a tad more complicated then that, though.
- geronimo, on 10/12/2007, -0/+1I thought about that.. Problem is the NBA is such a huge brand, they can't risk it. The NBA is a cash cow. ESPN, ABC, TNT.. even NBATV all jump over themselves to carry NBA games. The NBA basically supports ESPN.
- disruptor108, on 10/12/2007, -0/+1I think this deal was meant to be $5 million over 8 years vs. $8 million over 5 years.
In other words the first offer was $625,000/year for 8 years. The counter-offer was $1.6 million/year for 5 years. That's how I interpret the potential buyout... - LesPaul75, on 10/12/2007, -0/+1"the nba is doing just fine"
Not really... The NBA has become a joke over the last decade or so. It isn't about basketball any more, it's about the sponsors. It's about whoring the referees to stretch the series to seven games whenever possible, all for those glorious advertising dollars and ticket sales. - chitlin, on 10/12/2007, -0/+1Open-ended contracts like this almost usually last through generations, since there is usually a clause passing it on to "heirs and assigns." Just as they could "assign" their rights to someone else if that person made a buyout offer. There's an investment opportunity for someone.
- chitlin, on 10/12/2007, -0/+0Then their kids would inherit the rights of the contract. It's a never-ending payout unless some attorney can figure out some loophole or new case law is made.
- inactive, on 10/12/2007, -1/+1Ya these guys have it set for life......and their kids life and their kids life and their kids life......and so on and so forth.........till people stop watching overpaid kids play basketball.
- izzie2, on 10/12/2007, -2/+2notice it says successors
- 3Den, on 10/12/2007, -0/+0Plus, the contract says clearly "as long as the NBA or it's *successors* continue to exist"
- xenlab, on 10/12/2007, -2/+1I wonder if the NBA could just rename itself or otherwise, turn into 'some other business' to get ouf of the deal... but $25m is just a drop in the bucket when the TV Deal alone is worth $5b
- JamesWilson, on 10/12/2007, -2/+1Sounds like these guys better watch their backs.. if I were them I'd be scared NBA would be trying to put a hit on me. Seriously. Wouldn't be the first time. Wouldn't be the last.
- deanlowe, on 10/12/2007, -5/+3Yeah, a lot of times it's not how smart you are but how dumb they are. And the NBA was really really dumb in this case. $5M x 8years = $8M x 5years.
- KenMo, on 10/12/2007, -6/+3American capitalism at work.
Try that in the Socialist system so many American seem to want these days. - KnightMareInc, on 10/12/2007, -8/+3oh wow
- hoppdawg, on 10/12/2007, -19/+12You tell the NBA, big guy.
- Sunuva, on 10/12/2007, -31/+16Kudos for your thoughtful and constructive participation in the thread.
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