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Good news for the Nets: NBA COO Adam Silver said today that the league would likely welcome new Nets owner and Russian billionaire Mikhail Prokhorov into the fold next month.
Speaking at a press conference to discuss the Nets move to the Prudential Center in Newark, Silver said the league would confirm Prokhorov as the new Nets owner “probably sometime in early to mid-April.”
See video of the press conference here.
That timing would be great for the Nets, who have $23.3 million to spend on this year’s phenomenal free-agent class, which could potentially include you-know-who.
Also from the Times today, we learn that Mikhail Prokhorov is purchasing the Nets at just the right time:
Mikhail D. Prokhorov’s $200 million investment for 80 percent of the Nets and 45 percent of the team’s proposed arena is just one-third of what the team and arena are worth, according to Michael K. Ozanian, the national editor of Forbes, which compiles an annual list of professional team valuations.
Prokhorov’s investment is also far less than the total cost of $360 million in acquisition costs and working capital that Bruce C. Ratner, the team’s owner, paid for the Nets in 2004.
True, the team has floundered, its best players are gone and it plays to thin crowds in New Jersey. Ratner and his investors in the Nets have also lost nearly $400 million since buying the club. But few teams in recent years have been sold at such a steep discount.
If only you’d had two hundred million dollars lying around…
Harvey Araton and at the New York Times have an article today that’s worth a look, if only for the goofy picture at the top. What’s more, the article cites Prokorhov and the Nets’ move to Brooklyn as signs of a new day dawning for a franchise that’s been a perpetual second fiddle for nearly its entire history.
Legal challenges and N.B.A. vetting hurdles remain before 80 percent ownership of the Nets shifts from Bruce C. Ratner to Prokhorov. Then it would take at least two years for them to move from New Jersey and become the Brooklyn Nets. If and when, the Nets will matter in a way they have only dreamed of since they were born in 1967 as the New Jersey Americans of the American Basketball Association, cash-poor and attention-starved.
Suddenly, the team that has been slumming in the shadows of the Manhattan skyline is a few notarized documents from initiating a fierce intracity rivalry with the Knicks. The franchise that has long symbolized suburban sterility could become a central player in Commissioner David Stern’s global basketball crusade.
And for those predicting Mark Cuban-like meddling, Ettore Messina, a former employee of his for CSKA Moscow, dismisses any such notions:
“Prokhorov’s philosophy is very simple. He says, ‘I select the specialists, they do their job and at the end I evaluate.’ In the four years I was there, he never made a call on basketball.”
If this sounds too good to be true for Nets fans, well, wait and see. There’s no telling how this will play out in the long run, but right now, it certainly appears as though Mikhail Prokhorov’s involvement is a sort of best-case scenario for the soon-to-be “Brooklyn” Nets.
You never know, of course, but right now it looks as though this goofy billionaire from Siberia might just be the savior this franchise has needed all along.
This report from the New York Post will make it harder for opponents of this move to demonize Mikhail Prokhorov as a backward-thinking Russian. Apparently, his decision to move West is none too popular in
his homeland the fatherland. And as we all know, if you're pissing off the Russians, you're probably doing something right:
…the hundreds of millions of dollars could have been spent better in Russia, members of the Russian parliament said.
Viktor Ozerov, another upper-chamber legislator, said Prokhorov is sending his money in the wrong direction.
"I don’t deny that Mikhail Prokhorov has put money into developing sports in Russia, but I would have liked all the means he considered possible to have gone to specifically supporting sports in the fatherland," Ozerov was quoted as saying.
The Kremlin hasn’t commented on Prokhorov’s move, but members of the upper parliament chamber, the Federation Council, commonly reflect the views of the Russian leadership.
See? They really do call it the fatherland.
(And conspiracy theorists, take heart: perhaps the Russians are just saying this, when in fact, Prokhorov’s takeover of American sports has been planned on all along, and in 3 years Lebron will be ballin' in Moscow, right on schedule.)
Tom Ziller has his own take over at AOL Fanhouse, seconding Wojnarowski’s fine work, but alternately worrying that the hysteria that’s sure to ensue in the New York media will ultimately cast a shadow on Prokhorov’s players:
Where the real damage will be done over the next few years is in the New York media, where every report of a lavish Prokhorov party will be accompanied by snarky headlines and faux-puritanical finger-wagging. Certain sectors of journalism know how to prosecute the young and rich in the public eye — heck, basketball players know that better than most. While I won’t cry for Prokhorov’s coming exposure, and obviously think any illegal activity should be covered vigorously, I’m a bit worried this will all become a Page Six running gag, and Nets players (current and future) will be tarred by association. What’s the saying? “Don’t hate the player?”
And while I certainly agree that Prokhorov was made for the New York Post, et. all, I think that any connection between Prokhorov’s exploits and the character of his players will be strained, at best. On the one hand, you have a group of people (NBA players) that already party hard. Presumably, partying with Prokhorov (if that ever happens) will put them in the spotlight and cast them in a more negative light than that to which they’re accustomed.
But on the other hand, these are NBA players. We (the fans) already overlook so many moral indiscretions (marital infidelity, children out of wedlock, general conduct fit for a mid-90s Puff Daddy video), that it seems foolish to think that Mikhail Prokhorov will somehow make the world pay attention to the illicit behaviors of athletes. Stars and role players do crazy things all the time, but for the most part, those actions are obscured by amazing play on the court--because it's Lebron James--or ambivalent reactions from the fans--because we're talking about an 8th man for the Nets.
In the end, stars like Lebron James or Dwyane Wade will be mythologized just the same, and someone like Nets rookie Terrence Williams will be ignored, all while Prokhorov parties on.
Adrian Wojnarowski checks in today with a comprehensive piece looking toward 2010 free agency and beyond. Namely, what effect will Mikhail Prokhorov have on Lebron James, specifically, and NBA free agents, in general?
Once LeBron James(notes) meets Mikhail Prokhorov, the superstar’s sightline will reflect an unprecedented visage. When offering a global vision of business and basketball, here’s an NBA owner who can look James in the eyes. Russia’s richest man is 6-foot-7 with an air of cool and a tenacity of the streets. [...]
“He has the personality, the charisma and the wherewithal to reach any of the league’s young stars on a level that I don’t think other owners can,” David Vanterpool said by phone Wednesday. “He likes to go out. He likes to fly to Europe and go to the most exclusive resorts. He’s going to connect with these guys."
And then there's this from Woj. A concession to the recession, if you will:
For whatever wink-wink that comes with suggesting that Prokhorov made his fortune as simply a “banker and mining executive,” there’s a grudging acceptance that he’s the future of the NBA. Someone had to get the Nets to Brooklyn, and if it took $700 million of funny money, most of Stern’s bottom-feeder owners couldn’t care less. When no one is looking, most of the NBA Board of Governors will be pestering Prokhorov for jet rides from Russia, with love.
Which is part of what makes this whole scenario so fascinating. The economic calamity that's enveloped just about every aspect of American life has created a window for a guy like Prokhorov to finagle his way into an NBA franchise. Forget his background as a businessman, because this is a business, mannn. And it's failing a business for a shocking amount of NBA teams--infusing one of those teams with endless capital and an enthusiastic owner is a no-brainer, regardless of whether that man's capital gains have been partially ill-gotten.
Moreover, I think Wojnarowski and Vanterpool are spot-on in their assessment. In Prokhorov, players won't see a faceless foreigner, but something of a kindred spirit. Someone who has beaten the odds to collect his billions, and if reports are correct, isn't afraid to celebrate with lavish parties and scores of Russian prostitutes. Like Mark Cuban, only cooler, significantly wealthier, and surrounded by Russian women. Think players will have trouble embracing him?
Whatever your take on Mikhail Prokhorov, you have to admit: the New Jersey Nets just got a lot more interesting. And with a move to Brooklyn imminent and Lebron James on the horizon, the whole league's going to be paying attention to Mikhail Prokhorov. If some of the profiles on him are accurate, I imagine we're in for a quite a show.
And he’d like an investigation, too. If only he’d got the NBA’s commissioner’s name right, this would be far less difficult to ridicule.
Yes, U.S. Rep. Bill Pascrell has sent a letter to David Stern asking for an NBA investigation into the Nets’ sale to Russian billionaire Mikhael Prohorov. In Russia, league investigates you! (Sorry.)
“Mr. Ratner faces a December deadline to break ground on his development, or else lose much of his tax-free financing. Due to the large level of taxpayer subsidies involved in the project, and Mr. Prokhorov’s background, this potential sale raises concerns.
According to documents released by the Empire State Development Corporation, taxpayers are providing over $2 billion dollars in financing and direct grants towards the Atlantic Yards project. This represents a significant investment and risk by the taxpaying public. Should this sale go through, a large stake in the project, as well as a majority stake in the Nets, would be controlled by a foreign corporation, a first for the NBA. As a result, these taxpayer dollars will be directly subsidizing the profits and business risks of this foreign corporation, whose investment will be reportedly smaller then the public’s, instead of benefiting the taxpaying public. Especially during these tough economic times, this is, at best, a questionable use of taxpayer money and it is a question that should be explored.
Furthermore, Mr. Prokhorov’s background raises questions about his fitness to be the owner of a high-profile NBA franchise. Both Mr. Prokhorov’s business and personal history have come under intense scrutiny in his home country and abroad. I expect that the NBA will conduct a full and thorough review of Mr. Prokhorov’s background and businesses before allowing him to purchase a majority stake in the Nets."
I’m sure Daniel Stern will take a very close look at this. Yep … looks good! Can we build the new stadium now?
Because he's Russian, you know? And because he's alledgedly corrupt (insofar as prostitution is really "wrong"). Anyway, the jokes can go in any number of directions, and a few writers have had some fun with this news on twitter today.
In no particular order...
@Marcel_Mutoni: RT @kevinwilson16: Nets' slogan for 2009-10: If he dies, he dies.
@Unsilent: It's only a matter of time before Roman Abramovich makes the Knicks an offer they can't refuse. .
@Marcel_Mutoni: The writing on the New Jersey Nets' jerseys next season: Нью-Джерси Нетс
@Truth_About_It: Heard that LeBron James bought one of those Russian hats with a Yankees logo on it.
@Jeskeets: So wait, with a Russian billionaire now in control, we can go ahead and pencil in the Nets w/ the No. 1 draft pick next summer, right?
@Marcel_Mutoni: Good thing Vince Carter left Jersey. He would've heard from the Gulag after a string of lazy fadeaways in early November.
@Jeskeets: I can't wait for Prokhorov to trade Devin Harris, Brook Lopez and Courtney Lee for Kirilenko.
Incidentally, last night at a baseball game I met the son of the late, great Shirley Povich of the Washington Post. Among other things, we talked about great sportswriting. And I just created a post comprised entirely of tweets...
/Ducks lightning bolt from W.C. Heinz.
The biggest reason why foreign interests now will own more teams in the future is simply because there’s not enough rich Americans to buy the vast amount of sports teams that are available. Because of the decline of the primary business of most sports owners, more teams are for sale now, some quietly, than any time in recent history.
To get the price where some of these owners can accept it, they have to open it up to a worldwide pool. It’s why the Cavaliers will soon have a Chinese businessman owning a piece of their team and why it looks like the New Jersey Nets will finally become the Brooklyn Nets thanks in part to an upcoming investment by Russian billionaire Mikhail Prokhorov.
Fans haven’t liked the idea of out-of-town owners, so there might be some pushback if people from other countries begin swooping up teams. But for the current owners and the leagues –- especially in this economy -- it’s actually a good thing. For one, it makes the sport that much more international. Secondly, as I mentioned before, the trophy value is more. That means that a foreign owner is willing to pay more than other Americans because it is worth more to him, and his other business, to be called an owner in one of the major sports leagues.
The entire article is great, and diagnoses a trend that could have any number of implications for sports leagues and their players. Will more games be played in Europe, for instance? Or, perhaps the greatest fear for owners: Will American owners find themselves getting squeezed out of the league in favor of European or Asian businessmen with more capital?
At a certain point, especially in leagues without a salary cap, it becomes a matter of protecting competitive interest. It's not inconceivable, then, that a league might weed out a family ownership team of lesser finances (like, say, the Rooneys with the Steelers) in favor of a foreign billionaire who'll spend a bajillion dollars to give his team every advantage.
But that's all much further down the line, and involves hypotheticals that are more useful for fear-mongering than actual forecasts for the future of pro sports in this country. For now, Prokhorov is the first and only foreign NBA owner. And his involvement is going to bring a sneakily promising young team to the biggest city in America, and a borough that's been drastically improved over the last ten years. This is exciting news, and a welcome influx of good franchise karma at a time when multiple teams in the NBA are hemmorhaging money left and right.
Is it the sign of a coming trend? Possibly, but if this deal is any indication, that's good news for NBA fans.
From the New Jersey Nets ownership group (when do we affix "Brooklyn" to the Nets?):
Forest City Ratner Companies (“FCRC”), Nets Sports and Entertainment (“NSE”) and Onexim Group announced today that they have signed a letter of intent to create a strategic partnership for the development of the Atlantic Yards Project, a 22-acre residential and commercial real estate project in Brooklyn and the Barclays Center, the future home for the NBA's Nets.
This partnership will ensure the successful completion of a world-class entertainment venue in Brooklyn, the relocation of the NBA Nets basketball team and the economic and housing benefits of the Atlantic Yards Project.
In accordance with the agreement, entities to be formed by Onexim Group will invest $200 million and make certain contingent funding commitments to acquire 45% of the arena project and 80% of the NBA team, and the right to purchase up to 20% of the Atlantic Yards Development Company, which will develop the non-arena real estate.
Bruce Ratner, the Chairman and CEO of FCRC, said, “Mikhail and Onexim will be great partners for this project. I am thrilled that smart global investors appreciate the exciting economic potential of Brooklyn. We are one step closer to achieving our goals of creating much needed jobs and economic development for Brooklyn and the city.”
Mikhail Prokhorov, President of Onexim Group, said “We are delighted to join in this exciting project and to participate in the landmark development of global sports in this entertainment arena in the heart of New York City. I have a long-standing passion for basketball and pursuing interests that forward the development of the sport in Russia. I look forward to becoming a member of the NBA and working with Bruce and his talented team to bring the Nets to Brooklyn.”
NBA Commissioner David Stern said, "We are looking forward to the Nets' move to a state-of-the-art facility in Brooklyn, with its rich sports heritage. Interest in basketball and the NBA is growing rapidly on a global basis and we are especially encouraged by Mr. Prokhorov's commitment to the Nets and the opportunity it presents to continue the growth of basketball in Russia.
That last part. That would seem to be a blessing from the NBA's Godfather, David Stern, who's the only person I could think of that might have halted this deal. The Nets-to-Brooklyn move has seen its fair share of obstacles over the past few years, but with $200 million emerging to infuse the deal in a dead economy, this might just be the final push that the franchise needs to commence a move to the BK.
Lebron, take note: there's a team with eons of cap space and lots of young talent that's about to take root in New York City. Oh, and your idol owns a piece of the team.
(H/T to Curbed for the Press Release)
This according to CNBC’s Darren Rovell:
The Nets have signed a letter of intent with the group owned by Russian billionaire Mikhail Prokhorov to fund Brooklyn. That was quick.
Rovell adds that Prokhorov will front $200 million, which will cover 45% of the project. He will also own 80% of the franchise.
Nets Daily reports:
Mikhail Prokhorov confirms he is in serious negotiations with the Nets to finance Barclays Center and gain control of the team. In return for financing the arena, Prokhorov wants control for “a symbolic price”–probably $1. The Russian billionaire also wants to be able to use the Nets to train Russia’s basketball players and place “Russia’s leading coaches and managers in the NBA.” He added he expects negotiations to “move forward.” Meanwhile scrutiny of the deal continues.
This is great news for Nets fans. The tax-free bonds being used to help fund the new arena expire at year’s end, so the Nets need to break ground soon. A move to Brooklyn should make the team financially viable, and couldn’t hurt their sales pitch for Lebron James when he hits free agency this summer. And finally, adding a crazy Russian sports owner is always a good decision. Mark Cuban might have some competition for owner who most infuriates David Stern.
Julian Garcia of the New York Daily News checks in today with some interesting background on the New Jersey Nets’ newfound benefactor:
The Russian billionaire who is on the verge of funding the Nets’ long-awaited move to Brooklyn is a hard-partying bachelor who was arrested in 2007 on suspicion he was involved in an upscale prostitution ring. […]
Prokhorov, who reportedly could also take over a majority stake in the team if a deal is reached, was arrested in January 2007 while on vacation at a French ski resort when police cracked down on a suspected prostitution ring. According to numerous reports at the time, Prokhorov told investigators that he flew beautiful women in from Russia because he enjoyed their company.
However, investigators suspected that Prokhorov had supplied the women as prostitutes to his wealthy friends and kept the billionaire in custody for several days before releasing him and dropping the charges. Prokhorov later told the French press that “my winter vacation in France was spoiled by local police, who arrested me and my friends without giving any reasonable explanations.” A Ratner spokesperson refused to comment on Prokhorov’s controversial past.
Though easily my favorite part of the article is this little nugget: “At 6-9, Prokhorov would be the sixth-tallest player on the Nets’ roster.” You mean he’s six-foot-nine, a Russian billionaire, and possibly involved in organized crime? Last time I checked, that makes him a Bond villain, not an NBA owner.
Still, with the NBA in dire financial straits and Nets owner Bruce Ratner reportedly looking to offload his principal stake in the team, there’s a real possibility that we could be looking at our newest addition to the NBA ownership family. And I, for one, am excited to see where this goes. American sports needs its own Roman Abramovich. Think Mark Cuban gets frustrated with David Stern? Well Mikhail Prokhorov could just woo him with Russian prostitutes.
The Moscow Times reports:
Mikhail Prokhorov may help fund the construction of an arena for the New Jersey Nets, a spokesman for the billionaire’s holding company said Thursday.
Prokhorov, Russia’s wealthiest man and an avid basketball fan, is considering funding the stadium after being approached by someone involved in building Barclays Center, which is planned to go up in Brooklyn, Onexim spokesman Igor Petrov told The Moscow Times. [...] Though Barclays has never disclosed the cost of the project, reports have said the stadium’s construction will cost around $800 million. [...] Another source told Reuters that Prokhorov was getting a stake in the team as payment for a debt.
Prokhorov would get a noncontrolling stake in the club in return for funding the arena, a source close to the billionaire said, Vedomosti reported.
The potential upside for Prokhorov is rather obvious: the Nets' Q rating (and market value) would skyrocket with a move from the Meadowlands to Brooklyn. And there's also the small matter of whether a certain Global Icon (whose favorite borough is Brooklyn) could be lured to the Nets in 2010.
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