Reference no: EM131657844

In 1976, the ABA was a professional men's basketball league that competed with the NBA. The NBA and the ABA would eventually merge, but two ABA teams were left out. One of the teams took a buy-out for $3.3 Million, while the other team, the Spirits of St. Louis owned by the Silna brothers, worked out a different deal. They did accept some money ($2.2 Million) but they also negotiated a contract to receive 1/7th of the "visual media" (television) reveunes of the four ABA teams that the NBA did take (Spurs, Nuggets, Pacers and Nets) in perpetuity. Specifically, the contract stated: "The right to receive such revenues shall continue for as long as the NBA or its successors continues in its existence." At the time, it seemed like a great deal for the NBA as the league barely had a television presence with its championship games being shown on tape delay following the 11pm news. But, as time went on, the league grew tremendously in popularity and so did the television revenues. Since 1976, the Silnas have received over $300 Million from NBA TV royalties. A few years ago, the Silnas sued the NBA in Federal court to receive their share of the "visual media" rights that were unimaginable in 1976, namely international broadcasts, internet rights, and NBA TV Cable Network. The Federal judge encouraged the parties to settle, while also stating that the Silnas seemed to have a good case. The NBA eventually settled with the Silnas for an additional $500 Million along with an undisclosed small amount of future NBA revenue. The contract between the Silnas and the NBA is widely considered the greatest business contract in history.

For this discussion, please answer the following questions:

1. If you represented the NBA in the recent lawsuit brought by the Silnas, what arguments would you make to defend against the lawsuit ? If you represented the Silnas, what would your arguments be?