Mikhail Prokhorov has bought 80% of the Nets and 45% of Barclays Center from Bruce Ratner, a transaction now contingent only on the NBA Board of Governors' approval. Here is a profile of him, drawn from public sources.
Who is Mikhail Prokhorov?
Start with this: He is the most interesting man in the world.
Mikhail Dmitri Prokhorov was born in Moscow in 1965 and is one of Russia's leading businessmen and one of the world's richest individuals, with an estimated net worth of at least $9.5 billion and quite probably more. Some reports put the figure at $15 billion...or even higher. Forbes ranked Prokhorov #40 on the list of the world's richest last March and calls him the richest man in Russia. Finans Magazine, a Russian business publication, put the number at $14.5 billion. He is the chairman of Polyus Gold, Russia's largest gold producer, controlling nearly 40% of Polyus stock. He also owns nearly 20% of RusAl, the world's biggest aluminum producer, and a variety of other investments through the Onexim Group, his personal investment vehicle. His family was part of the old Soviet elite. His father was a member of the Soviet sports committee and his mother a scientist. His parents sent him to a language medium school in Moscow and then to the Moscow Financial Institute. He is a veteran of the Soviet Army and Komsomol, the Soviet communist youth organization, but he is hardly communist. While a student, he sold stone-washed jeans, his first capitalist venture, under the brand name, "Yourself" jeans. In 1989, he graduated with a first class degree from the International Economic Relations Department of the institute. Prokhorov is 6'9" tall and says when he gets final NBA approval, he will become the first NBA owner who can dunk. (Bruce Ratner, we are reliably told, can not.)
He is single and has been called Russia's most eligible bachelor. He is often seen in the company of some of the world's most beautiful women.
He lives in Moscow, but his official residence is Yeruda, a village in the middle of Siberia. He switched residences this year so his local taxes would be paid to the region where most of his business interests are located. He's said he doesn't intend to move to New York. Two years ago, he made a bid for the world's most expensive home, Villa Leopolda, a palace on the French Riviera built for the King of Belgium and now owned by the widow of banker Edmond Safra. According to French media reports, he planned to present it as a gift to Vladimir Putin, something he denies. He agreed to pay $600 million for it and put down a non-refundable deposit of $60 million, then backed out. He is currently in a French court, trying to get the deposit returned.
What is the source of his personal wealth?
He's not called the mining mogul for nothing. He has over the past decade been involved in the mining of nickel, palladium, gold and bauxite, from which aluminum is made. It's not how he started out. From 1989 to 1992 he was head of the International Bank for Economic Cooperation’s Management Board. In 1993, during the largely unregulated and highly controversial privatization of former state-controlled industries after the fall of Communism, Prokhorov and a partner, Vladimir Potanin, engineered the acquisition of Norilsk Nickel through his Onexim Bank. He was 28 at the time. He is credited with turning the inefficient Soviet nickel mines in Siberia into one of the world's largest and most profitable natural resource corporations. Both his current interests, Polyus Gold and RusAl Aluminum, were spinoffs from his investment in Norilsk. In spite of large-scale spending on pollution control technology, Norilsk is still one of the world's worst polluters, emitting nearly 2 million tons of sulfur dioxide annually, more than the entire nation of France! (Probably not good for the NetsGoGreen campaign.) Following his detention on suspicion of prostitution in France two years ago (see below), he was pressured by the Kremlin to sell his 25% interest in Norilsk. The sale, just before last year's economic downturn, turned into a bonanza. He received nearly $5 billion in cash as well as stock in Polyus and stock and debt in RusAl. The recession turned into, well, a gold mine for Prokhorov. The value of Prokhorov's stock in Polyus quadrupled as gold broke through the $1,000 an ounce barrier. Recently, the owner of RusAl, desperate to reduce his debt load, made a deal with Prokhorov. In return for restructuring his debt, Prokhorov got another 5% of the company.
He has used his ample cash reserves to make a number of strategic investments outside mining. In September 2008, as the world financial system tottered, Prokhorov purchased a 50% stake in Renaissance Capital, a troubled Moscow-based investment banking firm, for $500 million. It has since turned around and he recently provided Renaissance with a large cash infusion, permitting them to hire 300 bankers. Using his cash reserves, he also bought into other firms engaged in banking and finance, nanotechnology, energy efficiency and media. He's finalizing the purchase of a controlling interest in RBC, Russia's leading financial news site. He has also established a magazine for Russia's newly rich, appropriately named "Snob", whose Christmas issue cover features Santa driving a sleigh pulled by two scantily clad women. "Snob" sometimes includes imagery of the boss looking heroic (Is that Josh Boone he's dunking over?) Both the media interests and the Nets purchase are seen as attempts to gain a level of international legitimacy....or as an associate of a rival Russian oligarch says Prokhorov "suffers from boredom and $7 billion in cash."
To top it all off, none of his companies have any debt, the Russian press has reported...a fact which Prokhorov has confirmed.
How much is he committed to Brooklyn?
He will own 45% of Barclays Center and have certain management perogatives. He also has an option to buy up to 20% of the overall Atlantic Yards project, Ratner's $6 billion mini-city in Brooklyn. Ratner and other investors will still own 20% of the team, but will become more focused on the real estate aspects of the move. He'll also control a majority share of the arena, 55%. Under terms of the agreement, Prokhorov was to put down $200 million for the interest in the arena and the Atlantic Yards option. As for the Nets, he'll pay what he has called a "symbolic price"--apparently one dollar--for the 80% interest in the team. (That would put the value of the team at a buck 25.) He would also assume 80% of the team's estimated $210 million in debt and agree to eat up to $60 million in operational costs while the team remains in New Jersey. He has also agreed to help the team with "cash needs", not further defined, during this period. We can confirm the Nets have "cash needs".
If Brooklyn falls through, does that end his interest in the Nets?
It's increasingly unlikely the Brooklyn move will collapse, but if it does, there have been reports Prokhorov still might be "so geeked" he'd do what had to be done to get control. Both Marc Stein of ESPN and Dave D'Alessandro of the Star-Ledger have reported that Prokhorov so wants an NBA team he'd be willing to make a deal to buy the team and move it to Newark. He hasn't commented on the possibility and he is on the record as saying, No Brooklyn, No deal.
What are his basketball connections?
Prokhorov didn't play organized basketball past elementary school. Watching him play in a charity game last spring, we can attest that he's not very athletic but has a good basketball IQ. He's a decent post passer, for instance. For 13 years, he owned 25% of Euroleague champion CSKA Moscow, the last six through his control of Norilsk Nickel. When he was forced to sell his stake in Norilsk, he lost his piece of CSKA. During his time as owner, he turned CSKA into one of the richest and most successful teams in the Euroleague and easily the richest and most successful in Russia. His payroll regularly topped $50 million, making CSKA the highest paid team outside the NBA (and only a little less than the Nets' current cut-rate roster). Under his ownership, CSKA won two Euroleague titles and got to the championship game a third time. They dominate the Russian league.
Does he enjoy other sports?
He says he loves kickboxing, jet skiing and snow skiing. There are videos of him on Russia's version of YouTube performing all manner of daredevil stunts, including doing wheelies while jet-skiing and racing down slopes on snow skis after being dropped off by one of his helicopters...all of it recorded by professional videographers and dutifully posted on the site by Onexim. There's also video of him playing in the previously mentioned charity basketball game with Scottie Pippen and Arvidas Sabonis, who he flew in for the occasion.
He trains every day. He told an interviewer in October about his daily routine: "Two hours a day, no matter what. I may even sacrifice some sleep. I can go jogging at 2 a.m. with a low pulse. For example, if you jog for 10 km your pulse should not exceed 125 bpm. If I have 125 bpm I will fall asleep within 20 minutes after I finished jogging. If the pulse is higher I will have trouble falling asleep. On weekends I train for 4-5 hours. On holidays for 4-6 hours, this is my routine daily training."
He also is head of the Russian Biathalon Federation. That role became controversial last year when two of the country's top biathletes were charged with doping and banned from international competition, including the Olympics. He continues to support the athletes even though he has proposed tougher anti-doping rules. He regularly travels to an international competitions to cheer on Russian Biathletes and spends a considerable amount on the team.
What's he like, personally?
Prokhorov describes himself as an "extremist" in his personal life.
"To prevent the workaholic syndrome from passing into the syndrome of constant tiredness and dissatisfaction, follow the principle of the old joke that goes like this: You cannot eat all food, you cannot drink all wine, you cannot have all women, but that’s what you should strive for!" Yes, he said that and more importantly, there is evidence he actually lives that way.
He is driven but until recently, he's been mostly private. He might spend nearly $18,000 on lunch at a midtown restaurant but it was the restaurant owner who bragged about it. He might spend $30 million (not a misprint) on a vacation in the south of France--as French media reported, but he won't confirm it or boast about it. He doesn't deny it either. He refuses for example to identify his favorite author, his favorite fictional character, even his favorite color! (We suspect it's not red, as in losses.) He said he didn't want the media or public to be aware of his "cultural biases". He did identify a favorite quote, from a French author: "Good advice is something a man gives when he is too old to set a bad example".
He plays the guitar and reportedly has a fine singing voice.
He doesn't dismiss luck as big part of his success, telling CNN earlier this year, "In business, you need to have luck...That's why it's very stupid to say there is no luck". (If he's available, could he sit in on the Draft Lottery this May?)
Asked which "gift of nature" would he like to have, Prokhorov responds, "To understand women. I know this sounds quite stupid. Somerset Maugham said it best: 'You should love women, you do not have to understand them'".
He's given more interviews to the Russian media since agreeing to buy the Nets in September than he did the previous year. In his most recent, he discussed the team's prospects with SovSport. But he's yet to give one to the US media. There are reports that he's agreed to be profiled by both "60 Minutes" and Bloomberg News and that shooting has already begun in Moscow. He and his people have been pleasantly surprised by the generally favorable coverage the Nets' purchase has generated.
Who are his basketball people?
Prokhorov has hired consultants from American basketball, whose identities have not yet been disclosed.
His best known NBA connection is with Andrei Kirilenko of the Jazz, who was nurtured by the CSKA Moscow system. Kirilenko has called Prokhorov "someone I know very well" and says he expects the Nets to become contenders after Prokhorov gains control.
He also maintains contacts with a variety of hoops hands from his days at CSKA. Prokhorov's old coach at CSKA Moscow, Ettore Messina, was rumored as a possible successor to Lawrence Frank as early as last April, long before anyone was talking about Prokhorov. He signed a three-year deal with Real Madrid this summer. Prokhorov is also believed to know and respect David Blatt, the Israeli-American Princeton grad who is coach of Russia's national basketball team. Blatt is a protege of Pete Carril, the legendary Princeton coach and the author of the Princeton Offense.
While still with CSKA, Prokhorov tried to hire Toronto Raptors assistant GM Maurizio Gherardini. The Raptors turned him down. He reportedly relies on Gherardini for advice regarding NBA personnel and recent reports indicate Gherardini has endorsed retaining Rod Thorn.
What's his management style?
"His actions for CSKA were limited to hiring the management, approving the budget, and the strategy," his CSKA publicist Nicolai Tsynkevich told D'Alessandro. "All other things he was leaving into hands of the people he trusts. And he was always trying to hire the best in the industry."
How often would he show up at the CSKA office?
"Never," Tsynkevich told D'Alessandro. "Believe it or not, he visited CSKA only to watch some games. Oh, sorry: Once he visited our legendary physiotherapist, Asker Bartcho, to have a dinner in his office."
"The guy has a way about him, a vision," Messina told Harvey Araton of the Times, adding that the vision didn't require him to be hands-on. He's not the Russian Mark Cuban. "Never saw him in the practice gym, only at Euroleague games, where he’d be in the first row with a CSKA jersey and his name on the back.
"There was only one time when he got involved in a personnel decision, and that was when there was a chance to bring Andrei Kirilenko back to Moscow," Messina said. "It was after Russia had won the European championship in 2007. It would have been a big patriotic thing for Kirilenko to come back, but he had a contract with the Jazz and they wouldn’t let him go.
"But 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."
A former NBA journeyman who played then coached at CSKA says Prokhorov will get over any hurdles, around any obstacles. "There are no obstacles this guy can’t overcome," David Vanterpool told D'Alessandro. "He wouldn’t be involved in this if he didn’t already know how it’s going to turn out. That’s how shrewd he is: He understands the future as well as most of us understand the present. That keeps him five steps ahead of everyone else."
As for the practical reality of spending money, Andrei Kirilenko says, "I don't think he'll be afraid to spend. But I think his main issue will be to build a good team, rather than just throw the money out. He always been known for creating great business rather than just get something and get a quick result. If he's coming, it's going to be for a long time."
"He's ready to spend. I don't think it's an issue," the Jazz forward added. "But I think he wants to make sure he's going to get a result. It's not just, 'Get everybody at a crazy price' and then it's like, 'I don't know what to do with it.' I think he still is going to be really wondering what kind of piece he can get for the price he's ready to spend."
He's told the NBA Board of Governors he expected to attend about a third of the Nets' games. He also asked the other owners to call him "Mike Prokhorov" and in return one of the owners, Wyc Grousbeck of the Celtics, dubbed him "the people's billionaire". (When Keyon Dooling was told he could call Prokhorov "Mickey", he responded, "No, I can't".)
Overall, he fills his upper management with young people, many of them hired after he had acquired their companies. His top two financial people are women (as is Ratner's chief operating officer). He boasts he doesn't carry a blackberry or cell phone or clutter his desk with a personal computer. He has people who do that. It's always good to have "people".
Is he active in philanthropy?
In March 2004 he founded the Cultural Initiatives Foundation (The Mikhail Prokhorov Foundation), a charitable foundation; it is headed by Prokhorov's elder sister Irina Prokhorova, prominent Russian publisher. According to the foundation, "the purpose of the Foundation is the encouragement of cultural awareness and activity as the most important element in enhancing all aspects of life, and the Foundation’s activities are determined by its fundamental conviction that culture stimulates the creative abilities of individuals and society as a whole, leads to a clearer understanding of social issues and can assist in their resolution, and is the most important resource in social and economic development". He is a member of the Supreme Council of the Sport Russia organization. In August 2006 he was awarded the Order of Friendship for his significant contribution to the growth of Russia’s economic potential by then-President Vladimir Putin.
When his sister was harrassed and insulted by local youths at a foundation event earlier this year, he made more than a veiled threat against those who paid them.
Since I was a child, I had a rule -- to punish crudity and disrespect towards women. I see one simple and effective way to handle it: If the two gentlemen, who financed this PR campaign, do not apologize to my sister in the next two weeks, I will do what every man should: I will personally beat the shit out of them. You know that I will."
When later asked if he was serious, he responded, "Do you have any doubts? However, those responsible made their apologies to Irina."
All we can say is, "Whoosh".
How controversial is he?
Very...although some might call him more "colorful" than controversial. Like most Russian oligarchs, Prokhorov has been tied to stories of high living, but unlike many of his contemporaries he's steered clear of confrontation with Russian strongman Putin. His only problem: at an annual two-week long Christmas party for the Russian rich at the French Alpine resort of Courchevel in January 2007, he was detained for allegedly arranging prostitutes for his guests. After four days he was released without charge. None of the women were charged either and many are suing the local police. The case was closed just before he announced he was buying the Nets. He has been satirized on Russian television for his lavish lifestyle and his reputation as "Russia’s most eligible bachelor". All that aside, he has survived the league's vetting process as a potential owner and David Stern has warmly welcomed his decision to buy the Nets.
Prokhorov is close to the Kremlin, although not necessarily Prime Minister Vladimir Putin. He is closest with President Dmitri Medvedev, a contemporary in age and demeanor. Through those Kremlin connections, met with President Obama at a US-Russian Business Forum during the US President's visit to Moscow. He had previously met with President Bush on a similar visit. During a September 23 reception for heads of government at the UN General Assembly, Russian President Dmitri Medvedev informed President Obama of Prokhorov's intention to buy the Nets, revealed hours earlier...then had his press secretary inform the Russian media of the conversation!
How big is all this in Russia?
Very. Here's a CIA report on how Russian TV handled the biggest stories on September 24, the day after Prokhorov revealed he was buying a controlling interest in the Nets.
Russia's role at the UN Security Council's meeting was highlighted on Russian TV in the main evening news on 24 September. The New York summit was the top story on both the Russian official state television channel Rossiya and state-controlled Russian Channel One TV. It was second down on Gazprom-owned NTV (after a report on Russian billionaire Mikhail Prokhorov's plan to buy a US basketball team). The subject was mentioned in brief by the privately-owned Russian television channel Ren TV.
Kirilenko (there's that name again) was interviewed on several Russian channels, including one that caters to English speakers, about what a big deal this will be for Russia as well as the Nets. He has even recommended Prokhorov could sign Timofey Mozgov, a 23-year-old Russian big man. Expect to see a Russian player on the Nets or at least in training camp next season.
Just how driven is this guy?
Asked by a Russian journalist what male quality he most admires, Prokhorov responded, "to be The Man". Another asked if he needed to be first in everything he does. Prokhrov responded, "Well, let’s say, not all, but if it’s the subject of a professional interest, or what I am doing in the public part of my life, here, of course, only first place matters."
"Only first?" the journalist asked again. "Only first", Prokhorov replied...unsmiling.
Bottom line, whether you love him or hate him, think him the Nets' savior or an ostentatious consumer of riches in a time of poverty, one thing is clear: even if he wasn't 6'9" tall, he'd still be larger than life.