Krell’s Korner is a column about the people, events, and deals that shape the entertainment, arts, and sports industries. The NBA-ABA Merger.
It was not exactly a slam dunk.
In 1976, the merger joining the National Basketball Association (NBA) and the American Basketball Association (ABA) blended the latter’s New York Nets, Indiana Pacers, San Antonio Spurs, and Denver Nuggets into the senior league and left behind the Virginia Squires, Kentucky Colonels, and Spirits of St. Louis.
The ABA Players Association attorney focused on financial well-being. “First, the ABA players who have contracts are guaranteed full compensation, no matter what,” said Prentiss Yancey. “Second, the pensions of all ABA players from 1972 to the present are improved.”1
For the quartet of ABA teams about to be NBA teams, each had to pay the NBA a fee of $3.2 million. As the Knickerbockers had territorial rights to the New York City area, the Nets had an additional burden: $6 million within a 20-year term to the team that called Madison Square Garden home.2
There was an agreement providing for the St. Louis and Kentucky teams to be compensated if the NBA refused to bring them into the merger, thereby leading to them closing operations. Kentucky reportedly got $3 million; St. Louis’s fee was “expected” to be in that neighborhood.3
However, the attorney for the owners of the Spirits negotiated an additional payment that set a new standard for the word “visionary.” Don Schupak saw television as the future, even though the championship games were not yet in prime time yet, so he negotiated for Dan and Ozzie Silna to get one-seventh of the television money involving the ABA teams in this new paradigm. There was no time limit in the agreement.
A 2003 article in Sports Illustrated claimed that the deal provided $100 million to the fraternal duo so far. They also received a flat $2.2 million payout. By this time, the NBA became a television phenomenon, thanks to Magic Johnson and Larry Bird at the center of the rivalry between the Los Angeles Lakers and Boston Celtics in the 1980s, followed by the Chicago Bulls dynasty led by Michael Jordan in the 1990s.4 A buyout in 2014 ended the perpetuity of the original agreement with a reported figure of more than $500 million, plus “a small stake in the revenue the former ABA teams will earn from the new TV contract.”5
The ABA had begun in 1967. The NBA was originally called the Basketball Association of America at its 1946 inception, then changed its name to the NBA three years later when it joined with the National Basketball League. Several teams had already folded by the time of the NBA-ABA merger in 1976.
The Minnesota Muskies spent one season in the land of 10,000 lakes before moving southward to the Sunshine State, becoming the Miami Floridians—eventually known simply as Floridians—and disbanding after the 1972 season.
Pittsburgh’s entry was the Pipers. With the distinction of being the first ABA champions, the team moved to Minnesota and replaced the Muskies after the 1967-68 season only to return a year later. The team’s name changed to Pioneers in 1970; it got a pink slip from the ABA in 1972 and joined the Floridians in the league’s graveyard.
Three ABA teams had closed in 1975.
The San Diego Sails, né Conquistadors, ceased operations in November, largely because of poor attendance. It was the second time that the city lost a pro hoops team—the Rockets debuted in the NBA in 1967 and moved to Houston four years later. The Sails were an expansion team in 1972.
The Baltimore Claws had a lifespan of three preseason games before the 1975-76 season. Originally known as the New Orleans Buccaneers, the team left The Big Easy in 1970 for Memphis and brandished three names during its Tennessee tenure—Pros, Tams, and Sounds. A group of Marylanders bought the team and moved it to Baltimore in 1975, but financial pressures led to the Claws’ demise. “They (Claw owners) were constantly haggling among themselves,” explained ABA President John Y. Brown. “They could have sold 2,500 season tickets by getting a little bit of talent. But you got to give the businessman, the fan, evidence of a team!”6
In early December, the Utah Stars flatlined when the ABA dissolved the franchise because of a weak financial standing and failure to meet payroll obligations. Salt Lake Tribune sportswriter Steve Rudman pointed to mismanagement dating back a few years, including a lengthy, debilitating breach of contract lawsuit involving Coach Bill Sharman leaving for the Los Angeles Lakers after the Stars won the 1970-71 ABA title. Sharman and the Lakers had been ordered to pay $250,000 and $175,000, respectively; the Tenth Circuit Court of Appeals reversed the lower court’s decision.7
Suffering, the Stars operation dimmed into oblivion. “But their demise was inevitable and not the result of lagging attendance, negative press or lack of community support,” opined Rudman. “It was suicide pure and simple.”8
Before its 1970-76 stint in Utah, where it brought home an ABA championship and four Western Division titles, the team began as the Anaheim Amigos but only lasted in Orange County for the initial season: 1967-68. It moved to Los Angeles, changed the moniker to Stars, and played home games in the Los Angeles Memorial Sports Arena until 1970, when Bill Daniels, a cable television mogul, bought the team and planted his flag in Utah.9
The merger might have happened sooner, but a lawsuit by NBA star Oscar Robertson posed a formidable obstacle. Robertson, a keystone of the Cincinnati Royals and later the Milwaukee Bucks, wanted to remove the NBA’s power over players and filed his suit in 1970 after a merger idea was first publicized. As it stood, the NBA could keep a player on his team with no recourse for going to another team. Free agency was not an option. Robertson based his suit on antitrust grounds and won a preliminary injunction in 1970, preventing a merger except in the case of arguing to Congress for exemption from antitrust laws.
It was moot.
The United States District Court for the Southern District of New York explained that no legislation went forward because the NBA did not want the condition. Further, the district court noted that a 1973 order by the lower court gave a green light to a merger as long as Robertson or the NBA Players Association’s attorneys were present.10
In 1976, the suit was settled.
Terry Pluto’s 1990 oral history Loose Balls: The Short, Wild Life of the American Basketball Association covers the ABA’s genesis, influence, and demise in terrific detail. Mike Goldberg, the ABA counsel, is a prominent contributor, offering a no-holds-barred analysis of the leagues joining forces. “First of all, the NBA never called this a merger,” said Goldberg. “The four ABA teams in essence bought their way into the NBA and the NBA considered it in an expansion.”
Both entities had been worn down, forcing them to link together or suffer indefinitely and perhaps fatally. “To most ABA people, it was impossible to imagine playing another season,” revealed the attorney. “On the NBA side, fatigue also was a factor. The ABA had turned their world upside down. Guys were jumping leagues, guys were leaving college early, guys were getting paid astronomical salaries. Both sides just said, ‘Enough already. Let’s end the madness.’”11
Decades have passed since the ABA folded. Basketball fans may remember the signature red-white-and-blue basketball; innovation of the three-point shot; financial challenges leading to the termination of certain teams; and excitement of stars Julius Erving, Artis Gilmore, Dan Issel, plus others competing against their high-level NBA peers after the merger
Sports lawyers look at it as a legacy of legal importance, thanks to merger complications, Oscar Robertson’s lawsuit, and the Silnas’ television deal. To use a basketball term, it is necessary to use a full-court press for being innovative in negotiations, technology, and contract language.
David Krell is the author of Do You Believe in Magic? Baseball and America in the Groundbreaking Year of 1966 and 1962: Baseball and America in the Time of JFK.
Endnotes
1 Bob Logan, “ABA merges with NBA,” Chicago Tribune, June 18, 1976: C1.
3 Sam Goldpaper, “A.B.A. Draftees Up for Auction,” THE N.Y. TIMES, June 23, 1976: 29.
6 Bob Ibach, “ABA Claws Get Final Buzzer,” Baltimore Sun, October 21, 1975: 26.
7 Eckles v. Sharman, 548 F.2d 905 (10th Cir. 1977).
10 Robertson v. National Basketball Association, 556 F.2d 682 (2d Cir. 1977).
