4 Lessons from the Greatest Business Deal in Sports History

One of two brothers who signed what is likely the greatest deal in sports history -- earning the two of them and their attorney $800-Million as team owners without their  having to pay a player or build and operate an arena -- died this past week, with relatively few people outside the industry recognizing his name. But, when you hear what he achieved, you will quickly realize the importance of knowing -- and learning from -- his story.

In 1974, Ozzie Silna and his younger brother, Daniel, bought the failing Carolina Cougars of the American Basketball Association for about $1 million, and moved the team to St. Louis. The Silnas were not truly interested in operating their ABA team (which they renamed the Spirits of St. Louis);  they bought the team because they believed that the National Basketball Association (NBA) would ultimately acquire (or merge with) the ABA, creating a golden opportunity for themselves.

There are many practical lessons that can we learn from the Silnas - here are four:

1. It is difficult, but critical, to understand the long term value of non-liquid assets, and how societal changes can dramatically alter the value of intellectual property, franchise rights, and other non-hard-goods.  The NBA failed to understand the value of its future television revenue stream; the Silnas recognized the golden opportunity.

2. Owning something that others with deep pockets need creates great opportunity. The Silnas recognized that acquiring an ABA team meant that NBA would need to negotiate a deal with them if it wanted to merge with the ABA; similar opportunities exist in real estate, IP investing, and other areas of business in which larger enterprises need specific assets belonging to a smaller entity

3. Sometimes turning down a cash offer for a long-term annuity with growth potential can pay off handsomely.

4. Even the best investors sometimes make mistakes. Don't be too hard on yourself if something fails, just keep up the good work.