In 1967, a group of enterprising businessmen founded the American Basketball Association (ABA) as a competitor to the already established National Basketball Association (NBA). The NBA had teams in ten cities, but was reticent to open the league up to major expansion. The goal of the ABA was to eventually force a merger of the two leagues by showing the NBA how profitable it could be to expand its base. By 1970, merger talks had begun in earnest in the wake of another merger - the AFL/NFL merger that saw the older NFL absorb all ten teams from the upstart league. It was assumed that within a few years the NBA and ABA would be operating as one entity.
Unfortunately for the ABA, their league was not nearly as solvent as the AFL was, and by the time the legal issues preventing the merger had been sorted out, it was 1976, and the league had only seven teams left. The Virginia Squires declared bankruptcy immediately after the season, leaving only six teams remaining for the merger. The NBA, however, wanted just four of the six: the New Jersey Nets, Denver Nuggets, Indiana Pacers, and San Antonio Spurs. The owners of the remaining two teams, the Kentucky Colonels and the Spirits of St. Louis, would need to be bought out.
John Y. Brown, the owner of the Colonels, settled for $3.3 million, but the owners of the Spirits, Dan and Ozzie Silna, would not be placated so easily. Dan and Ozzie were businessmen, and certainly interested in turning a profit, but what they wanted more was to be a part of the NBA. They had failed in a bid to purchase the Detroit Pistons in 1974, so instead they bought the Carolina Cougars from the Southern Sports Corporation in 1974 and immediately moved the team to St. Louis. The St. Louis Hawks of the NBA had recently moved to Atlanta, leaving the Gateway to the West as the largest U.S. city without a professional basketball franchise. The Silnas believed establishing the team in St. Louis would make it more attractive, but the NBA disagreed. They wanted the Spirits out.
The Silnas refused the buyout and the merger could not be completed without their consent. So the pair countered the NBA's offer with a different proposal. They had expected the Colonels and Spirits to be included with the NBA, but did not believe that Virginia would be included, so they had already thought up a settlement for the Squires that they would now put on the table for themselves. In exchange for going away quietly, the NBA would give the Silnas $2.2 million dollars immediately. This was two-thirds of what Brown had settled for with the Colonels. On top of this lower payout, however, the NBA would give the Silnas one-seventh of the annual television revenue for the four ABA teams included in the deal.
Mouths drop nowadays when this deal is described, but in 1976, the NBA's annual television contract was not very large, and the first payout was only about $300,000. Still, the deal paid out more than Brown's deal after only about five years. In 1982, the NBA showed ever more poor foresight. Noticing that the annual check to the Silnas was steadily rising, they tried to buy them out again, offering $5 million a year for eight years (a total of $40 million). The Silna's countered with $8 million a year over five years (again, a total of $40 million), but for reasons unknown, the NBA balked at this proposal and the buyout fell through.
The Pacers, Spurs, Nets, and Nuggets have been trying since then to find a way to wiggle out of the deal, but have thus far been unsuccessful. Meanwhile the payouts amount to about $15 million a year, totaling over $200 million. As far as deals go, it's hard to find a better one that this. Most jobs that pay $15 million a year require the employee to at least do some semblance of work - even J.D. Drew has to pretend to play baseball to get his check. The Silnas, on the other hand, just sit around waiting for their annual check to arrive. This is what some would call "business acumen".