What Was the Most Profitable Contractual Loophole in History?

What was the biggest contractual loophole in history?

Steve Berman:

Ozzie and Daniel Silna owned a basketball team called the St. Louis Spirits, in the old American Basketball Association (ABA). You remember, they used to play with the red, white, and blue balls instead of the orange ones everyone else uses.

When the NBA and ABA merged in 1976, four teams were invited to be part of the NBA: the New York (now Brooklyn) Nets, Denver Nuggets, Indiana Pacers, and San Antonio Spurs. That left out two teams, the Spirits and the Kentucky Colonels. The Colonels' owners negotiated a $3 million buyout, and the Silnas accepted a $2.2 million payout, with a 2 percent share of TV revenues from the other four ABA teams.

The catch: The TV revenues were in perpetuity. As in forever.

When basketball wasn't on TV, nobody ever thought a 2 percent share of four teams would amount to much. Then in the '80s and '90s the NBA became white hot, and every year the Silnas would get tens of millions. By 2014, over $300 million had been paid.

How did this happen? From "Best sports deal ever? How the Silnas outsmarted the NBA," by Jon Wertheim in Sports Illustrated:

All first-year law students worth their highlighters know the danger of contracts without termination periods. The NBA's outside counsel—including a young lawyer, David Stern—saw this and tried to indemnify the league from disputes that might arise from the contract.

[The Silna's attorney Donald] Schupak countered with a masterstroke: He inserted an intentionally broad definition of broadcast revenues, a clause that could one day make the contract applicable to distribution channels unimaginable in 1976. "I was blunt during these discussions," Schupak wrote in a 2012 legal declaration. "Rather than narrow the definition of TV revenues, I insisted instead that we add a new sentence [to] emphasize that this was a broad definition that could not be evaded or made obsolete."

When League Pass and foreign broadcast rights entered the picture, the Silnas sued for their share, and the league finally had to deal with the issue once and for all.

The Silnas got $500 million, plus a continuing share of media revenue from a partnership with the Nets, Nuggets, and Spurs.

In the end, a team that was worth maybe $3 million tops netted over $1 billion to its owners, who are still being paid to do absolutely nothing.

This post originally appeared on Quora. Click here to view.

Banner images via Getty.

Big Questions
How Do They Dye the Chicago River Green for St. Patrick's Day?

It wouldn’t be a St. Patrick’s Day celebration in the Windy City without 400,000 spectators crowding the banks of the Chicago River to “ooh” and “aah” at its (temporarily) emerald green tinge. But how do officials turn the water green?

First, a bit of history: The dyeing tradition became an annual thing nearly 60 years ago, in 1962, but its real origins go back even further. In the early days of his administration as Mayor of Chicago, Richard J. Daley was a man on a mission to develop the city’s riverfront area. There was just one problem: The river itself was a sewage-filled eyesore. In order to get to the bottom of the city’s pollution problem and pinpoint the exact places where waste was being discarded into the waterway (and by whom), Daley authorized the pouring of a special green dye into the river that would allow them to see exactly where dumping was occurring.

Fast-forward to late 1961 when Stephen Bailey—part of the Chicago Journeymen Plumbers Local, the city’s St. Patrick’s Day Parade chairman, and a childhood friend of Daley’s—witnessed a colleague’s green-soaked coveralls following a day of pouring Daley’s dye into the Chicago River. That gave Bailey an idea: If they could streak the Chicago River green, why not turn it all green?

Three months later, revelers got their first look at an Ecto Cooler-colored river when the city poured 100 pounds of the chemical into the water. They got a really good look, too, as the river remained green for an entire week.

Over the next several years, the same practice was repeated, and again it was carried out by the Plumbers Local. The only difference was that the amount of dye used was cut in half over the next two years until they finally arrived at the magic number: 25 pounds of dye = one day of green water.

Unfortunately, the dye that was intended to help spot pollution was an oil-based fluorescein that many environmentalists warned was actually damaging the river even more. After fierce lobbying, eco-minded heads prevailed, and in 1966 the parade organizers began using a powdered, vegetable-based dye.

While the exact formula for the orange powder (yes, it's orange until it's mixed with water) is kept top-secret—in 2003 one of the parade organizers told a reporter that revealing the formula would be akin to “telling where the leprechaun hides its gold”—there are plenty of details that the committee lets even non-leprechauns in on.

The dyeing process will begin at 9 a.m. on the morning of the parade, Saturday, March 17 (it's always held on a Saturday) when six members of the local Plumbers Union hop aboard two boats, four of them on the larger vessel, the remaining two on a smaller boat.

The larger boat heads out onto the water first, with three members of the crew using flour sifters to spread the dye into the river. The smaller boat follows closely behind in order to help disperse the substance. (The best place to catch a glimpse is from the east side of the bridge at Michigan Avenue, or on Upper and Lower Wacker Drive between Columbus and Lake Shore Drives.)

Approximately 45 minutes later, voila, the Chicago River is green—but don’t expect it to stay that way. These days, the color only sticks around for about five hours. Which is roughly the same amount of time it takes to get a perfectly poured pint of Guinness if you venture out to an Irish pub on St. Patrick’s Day.

Have you got a Big Question you'd like us to answer? If so, let us know by emailing us at

Big Questions
What is the Riot Act, and Why Don't I Want It Read to Me?

In 2011, NBC published a guide on how employees could "read the riot act" to their subordinates. Professional footballer Stéphane Mahé was once "read the riot act" after fouling a rival player so hard he needed four stitches. In Bibb County, Georgia, a Superior Court Judge "read the riot act" to a group of wayward teens in an effort to curb their bad behavior.

The idiom, which has been in use for centuries, is generally thought to mean the admonishment of a person or persons who have committed an error in judgment. But the origin of the term "riot act" concerns a very particular wrongdoing—an unlawful public assembly that peace officers of the 16th century fought with a pre-written warning to disperse or face serious repercussions. Like death.

Atlas Obscura reports that the riot act was first passed by British Parliament in 1714 and took effect on August 1, 1715. At its core, the Act served as what linguists refer to as a speech act: a word, phrase, or order that carries real weight. (Think of an ordained minister pronouncing a couple husband and wife.) If confronted with a rowdy crowd, an authoritarian would arrive and—this was crucial—read the Act aloud in order to serve formal notice that the parties involved were overstepping their bounds.

A copy of language appearing in the Riot Act
Jenson, Wikimedia Commons // Public Domain

The Act was passed in haste because supporters of the Catholic Jacobite political movement had been voicing their disapproval of King George I. A "riot" was any group of 12 or more people that was engaged in public disharmony. Typically, the raucous formation would be given 60 minutes to take a hike. If not, their just punishment would be prison, labor, or death. If the peace officer believed danger was imminent, he wouldn't have to wait the whole hour: He could deputize citizens to try and break up the gathering.

To enforce the Act and any punishments, the officer had to punctuate the reading by shouting, "God save the King!"

Scholars have wondered how successful such orators were in scolding a large assembly of angry protestors. In 1768, the answer was: not very. People opposing the imprisonment of radical John Wilkes ignored the Riot Act and suffered shots of musket ball, which killed seven.

The Riot Act was officially repealed in England and Wales in 1967 as part of some legislative housekeeping. Today, it's almost always used as a figure of speech, although Belize still recognizes it as a meaningful method of crowd dispersal. In 2017, police officers drew criticism for launching tear gas into a People's United Party protest without first reading them the Riot Act.

Questioned by a reporter, assistant commissioner of police Edward Broaster said that the incident didn't "meet the threshold" for busting out the paperwork.

Have you got a Big Question you'd like us to answer? If so, let us know by emailing us at


More from mental floss studios