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Message
The Most Profitable Contractual Loophole in History
Posted on 5/12/16 at 9:06 am
Posted on 5/12/16 at 9:06 am
Thought this was interesting.
LINK
Ozzie and Daniel Silna owned a basketball team called the St. Louis Spirits, in the old American Basketball Association (ABA). You remember, they used to play with the red, white, and blue balls instead of the orange ones everyone else uses.
When the NBA and ABA merged in 1976, four teams were invited to be part of the NBA: the New York (now Brooklyn) Nets, Denver Nuggets, Indiana Pacers, and San Antonio Spurs. That left out two teams, the Spirits and the Kentucky Colonels. The Colonels' owners negotiated a $3 million buyout, and the Silnas accepted a $2.2 million payout, with a 2 percent share of TV revenues from the other four ABA teams.
The catch: The TV revenues were in perpetuity. As in forever.
In the end, a team that was worth maybe $3 million tops netted over $1 billion to its owners.
LINK
Ozzie and Daniel Silna owned a basketball team called the St. Louis Spirits, in the old American Basketball Association (ABA). You remember, they used to play with the red, white, and blue balls instead of the orange ones everyone else uses.
When the NBA and ABA merged in 1976, four teams were invited to be part of the NBA: the New York (now Brooklyn) Nets, Denver Nuggets, Indiana Pacers, and San Antonio Spurs. That left out two teams, the Spirits and the Kentucky Colonels. The Colonels' owners negotiated a $3 million buyout, and the Silnas accepted a $2.2 million payout, with a 2 percent share of TV revenues from the other four ABA teams.
The catch: The TV revenues were in perpetuity. As in forever.
In the end, a team that was worth maybe $3 million tops netted over $1 billion to its owners.
10
Posted on 5/12/16 at 9:07 am to anc
Flint Tropics got screwed in that merger.
Posted on 5/12/16 at 9:08 am to anc
This is why you always have an attorney present before signing a contract.
Posted on 5/12/16 at 9:09 am to anc
Yeah, Ozzie Silna passed away recently so I saw this.
Posted on 5/12/16 at 9:13 am to anc
They are about to start making bank when the new TV deal kicks in. 
Posted on 5/12/16 at 9:13 am to LSUBoo
quote:
Yeah, Ozzie Silna passed away recently so I saw this.
Way to make it all about you.
About the deal, great foresight on their part.
This post was edited on 5/12/16 at 9:14 am
Posted on 5/12/16 at 9:14 am to anc
I wouldn't consider this a loophole when it was negotiated as part of the lower initial buyout, but it has certainly worked out well for them.
Posted on 5/12/16 at 9:16 am to Pectus
Just saying, I read about this recently because he passed away so it was in the news.
Posted on 5/12/16 at 9:16 am to slackster
quote:
but it has certainly worked out well for them.
I'd say so
Reminds of the old story about Animal House. All but 1 actor involved in the film chose to get royalties in perpetuity for the film instead of a lump sum. They've made millions but the guy who took the lump made barely anything.
Something like that.
It was Donald Sutherland, so I think he'll be ok
This post was edited on 5/12/16 at 9:19 am
Posted on 5/12/16 at 9:21 am to anc
That's not a loophole.
Posted on 5/12/16 at 9:21 am to anc
I met Donald Schupak, the attorney for the Silnas. We were discussing the coordination of loan covenants with terms of a limited partnership agreement as they pertained to distributions of cash to partners to cover their anticipated tax liabilities attributable to their partnership interests.
We talked about the Spirits of St. Louis, and he told me tales about the players. Some of the stories about Marvin Barnes made me laugh, but at the same time feel sad for him.
We talked about the Spirits of St. Louis, and he told me tales about the players. Some of the stories about Marvin Barnes made me laugh, but at the same time feel sad for him.
Posted on 5/12/16 at 9:22 am to CajunAlum Tiger Fan
quote:
That's not a loophole.
Posted on 5/12/16 at 9:25 am to Poodlebrain
quote:
I met Donald Schupak, the attorney for the Silnas. We were discussing the coordination of loan covenants with terms of a limited partnership agreement as they pertained to distributions of cash to partners to cover their anticipated tax liabilities attributable to their partnership interests.
Not so subtle brag, like at all.
You hear about these crazy contracts every so often, but there are plenty of times someone chooses the better lump sum and ends up much better off. That is the risk/reward of royalties.
Posted on 5/12/16 at 9:26 am to Poodlebrain
quote:
I met Donald Schupak, the attorney for the Silnas. We were discussing the coordination of loan covenants with terms of a limited partnership agreement as they pertained to distributions of cash to partners to cover their anticipated tax liabilities attributable to their partnership interests.
We talked about the Spirits of St. Louis, and he told me tales about the players. Some of the stories about Marvin Barnes made me laugh, but at the same time feel sad for him.
This post makes me want to give you a wedgie and stuff you in a locker.
Posted on 5/12/16 at 9:26 am to anc
Apparently, OP and article writer don't know what "loophole" means.
Posted on 5/12/16 at 9:28 am to TheCaterpillar
quote:
Flint Tropics
oxymoron
Posted on 5/12/16 at 9:32 am to Poodlebrain
quote:
I met Donald Schupak, the attorney for the Silnas. We were discussing the coordination of loan covenants with terms of a limited partnership agreement as they pertained to distributions of cash to partners to cover their anticipated tax liabilities attributable to their partnership interests.
Posted on 5/12/16 at 9:33 am to Epic Cajun
quote:
They are about to start making bank when the new TV deal kicks in.
I think the NBA finally bit the bullet and negotiated a huge buyout not too long ago.
Posted on 5/12/16 at 9:49 am to anc
quote:
anc
quote:
The Most Profitable Contractual Loophole in History
Not even close to this one...
Cliffs: A French Life Insurance Company offered clients the ability to go back and change their investment decisions that their $ within their policy was invested within, without losing capital. So when the market shifted over the weekend, you could go back and take advantage of it-perfectly legally due to the contract which has been upheld over 60 times in French Courts-over and over and over again. Essentially piling up free money for life, and easily transferrable to the heirs of your estate.
It is without question the worst contract of all time and there are still about 30 of them that are still in force.
This post was edited on 5/12/16 at 9:50 am
Posted on 5/12/16 at 9:59 am to Pectus
quote:
About the deal, great foresight on their part.
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