The Brooklyn Nets Are For Sale
In what could become the most expensive sale of a professional team ever, Nets Owner Mikhail Phokorov may demand $2 billion.
Get ready for a bonanza. Feeling the pressures of a free-falling Ruble and a marginal product on the court, Russian tycoon Mikhail Phokorovwill sell the Brooklyn Nets, a team he has owned since 2010. Prokhorov, who bought the team for $223 million when they still played in New Jersey, has asked a financial services firm to help with the sale, which comes just a few months after Microsoft billionaire Steve Ballmer bought the Clippers for $2 billion.
There are a few similarities between the Clippers sale and the pending Nets transaction. The Clippers, like the Nets, are the less popular team in a massive market. But while their secondary status is similar, the Nets will surely draw an even bigger asking price than the Clippers, with the potential for the sale to go as high as three million, or, with the share of the Barclays Center included, even as stratospheric as four million.
Unlike the Clippers, the Nets play in their own arena and share a market larger than Los Angeles. Prokhorov would be selling 80 percent of the team as well as 45 percent of the Barclays Center. Prokhorov’s stake in the Barclays Center alone is worth $2 billion dollars, and while the team was recently valued at $1.3 billion, the market will certainly bear a much higher price than that, considering the $2 billion price tag for the Clippers.
The Nets have struggled to define themselves since moving to Brooklyn, rotating aging and injured players and taking on bad contracts in an attempt to win as fast as possible. Because of the bloated salaries, the Nets lost $144 million last season. But the basketball business is a good business to get into, and one that figures to be even more profitable in the future.
After a new television deal this fall, the league will be tripling its profits from streaming and broadcasting, making a stake in an NBA team an almost sure way to make money. Unless, of course, you happen to be dealing in Rubles. Russian president Vladimir Putin has urged Russian oligarchs to begin bringing their businesses back to Russia in an attempt to pump money into the failing Russian economy. Prokhorov, who has lost $1.4 billion in the past two years, might be looking for a massive cash infusion as well as an opportunity to return his investments to his home country, where he’s facing heavy government pressure to disentangle from Western interests.
A bizarre mix of a booming market for basketball, a record television deal and a slumping petrol state might create the highest franchise sale in sports history, eclipsing the record set only a few months ago.
As to who will be in the market for the team, there’s no shortage of suitors. While the Atlanta Hawks (who also went on sale this month), have found interest from technology companies and jet makers, expect the Nets to attract some very high profile names, including the group of insurance businessmen that bought the Dodgers two years ago.
With the impending sale, the Prokhorov ownership, which began with such bluster with a large mural featuring the oligarch next to co-owner Jay-Z, taunting the Knicks, ends with a whimper, with Prokhorov facing trouble at home and the Nets failing to make much of a mark on the basketball landscape. Perhaps the new owners will finally make peace with the 69-year-old woman who owns Nets.com? Or better yet, offer her an ownership stake?
Photos by Nathaniel S. Butler/NBAE via Getty Images