Judge in WBD-NBA Suit Was Part of Legendary Deal That Cost NBA $500 Million

It turns out that the judge in Warner Bros. Discovery’s lawsuit against the NBA is intimately familiar with the league’s media-rights wheelings and dealings. He represented two brothers in a settlement with the league that ultimately netted them hundreds of millions of dollars in 2014.

WBD sued the NBA on Friday, claiming that the league choosing Amazon was an “unjustified rejection of our matching of a third-party offer.” The NBA said that “Warner Bros. Discovery’s claims are without merit and our lawyers will address them.”

The case was filed under seal in New York County Supreme Court. On Monday night, legal reporter Daniel Wallach reported on a letter from Justice Joel M. Cohen, alerting both sides to a potential conflict of interest.

Before being appointed a judge in 2018, Cohen was a partner in a case against the NBA. Cohen represented the Silna brothers, Ozzie and Daniel, the former owners of the Spirit of St. Louis basketball team, which played in the American Basketball Association. When the ABA merged with the NBA in 1976, the Spirits were left out of the new league. The Silnas then made one of the greatest deals in the history of the business of sports. 

With their team dissolving, the Silnas made a deal. They agreed to cease operations in exchange for a slice—approximately one-seventh—of the future TV broadcast revenues from the four ABA teams joining the NBA. The deal was for as long as the new-look NBA continued to exist, which has amounted to perpetuity. (At the time, the NBA’s popularity was minuscule compared to what it is today.) While the league’s profile rose, so did the Silnas’ pile of cash. For context, former Kentucky Colonels owner John Y. Brown got just $3 million to fold his team. 

As of 2013, the brothers had netted $300 million from the arrangement. The NBA realized the impact the arrangement would continue to have on its books and sought to buy them out. Cohen represented the brothers in the renegotiated settlement; the league and the Silnas ultimately settled in 2014 for $500 million. 

“I do not believe this raises any recusal issues, but wanted to disclose the facts and see if there are any concerns,” Cohen wrote to the parties in the WBD-NBA case. 

While never big winners in the ABA, the Spirit of St. Louis had future Hall of Famer Moses Malone briefly play for them during the 1975–76 season, when the team’s coach was Rod Thorn. Thorn went on to become a successful general manager who drafted Michael Jordan out of North Carolina in 1984.