NBA merges with ABA

On June 17, 1976, the National Basketball Association (NBA) announces a merger with its rival, the American Basketball Association (ABA), and takes on the ABA’s four most successful franchises: the Denver Nuggets, the Indiana Pacers, the New York (later Brooklyn) Nets and the San Antonio Spurs.

Founded in 1967 to fill the basketball void in areas not served by the 10-city NBA, the ABA selected former NBA star George Mikan as its first commissioner. He helped institute a more entertaining, high-scoring brand of basketball than that seen in the NBA, as well as an eye-catching red, white and blue ball, the three-point shot and an emphasis on marketing players with colorful nicknames like Julius “Dr. J” Erving and George “The Iceman” Gervin. Despite these popular innovations, the ABA was plagued by a series of bad business decisions, among them a failure to copyright the red, white and blue ball, which went on to sell wildly in the 1970s. The league also struggled to reach a mass audience, as only one of its cities was a top 20 American market. As a whole, the population in ABA cities was less than half that of the NBA cities, and although the underdog league was popular with what fans it did reach, in the end it could not make enough money to survive on its own.

Seeing the writing on the wall, seven ABA owners agreed to a merger, announced to the public on June 17. Plans were then made to dismantle three of the seven ABA franchises and incorporate their players into the NBA. On August 5, a dispersal draft was held to reallocate players. According to the terms of the deal, the three teams not absorbed into the NBA would be paid a separately negotiated lump sum. One of the three teams, the Virginia Squires, went bankrupt before the merger, but the other two were rewarded with substantial payouts. The owner of the Kentucky Colonels, John Y. Brown Jr., received a payout of $3.3 million dollars, while the Silna brothers, owners of the Spirits of St. Louis, negotiated what many believe to be the best deal in sports history: They received $2.2 million dollars and 1/7 of a share of each of the four remaining ABA (now NBA) teams’ television rights in perpetuity.