SBJ: Prokhorov Could Wind Up Paying $700 Million for Nets
by Net Income on Mar 22, 2010 7:30 AM EDT
in Brooklyn
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Buried in a story on team values, a Sports Business Journal chart suggests that by some estimates the price tag for Mikhail Prokhorov's Nets purchase "could be worth up to $700M". SBJ didn't break down the number, but the $700 million figure appears to be much higher than any previous estimate.
As reported, Prokhorov's Onexim Group has agreed to put down $200 million in cash; assume about $180 million in franchise debt from Forest City Enterprises, Bruce Ratner's parent company; eat $60 million in costs--including losses--sustained while the team remains in New Jersey; and purchase up to $106 million in junk bonds needed to finance Barclays Center infrastructure, for a total of around $550 million. In return, Onexim receives 80% of the team, 45% of the arena and an option to purchase up to 20% of the overall Atlantic Yards project in downtown Brooklyn.
Separately, the journal reports the vote to transfer ownership from Ratner to Prokhorov "will likely occur" when NBA owners gather in New York April 15-16 for their regularly scheduled board of governors meeting. However, it remains uncertain whether all details of the condemnation for the arena will be settled by then with some Nets insiders suggesting it could take until May to work them all out.
- Owner will put Warriors on the market - John Lombardo - Sports Business Journal
- After quick OK for Jordan, Prokhorov is next - John Lombardo - Sports Business Journal
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So how do we go from $550 million to $700 million?? Something missing.
Also, the $106 million in junk bonds isn’t a really a cost unless something goes wrong. Wouldn’t he be able to recover that cost if he sold his bonds later on (after receiving a nice profit from interest)?
At least the media may finally stop quoting the incorrect figure of $200 million for buying Nets and Barclays. He is really paying AT LEAST $440 million. And he wouldn’t “own Barclays”, just have 45% Control. Barclays should cost over $800 million to build.
maybe
there is something we don’t know about.
Moreover, the 45% stake in the arena also includes certain management perogatives, which I assume has to do with the staffing. For example, Yormark, its been reported, will move from the Nets to the arena holding company, Brooklyn Sports and Entertainment. Does Prokhorov have veto power over the selection of certain arena officers? Also, if he does buy the junk bonds—he’s reportedly agreed to buy them if they can’t be sold—his hand would be strengthened since he would hold significant stakes in both the equity and the debt of the arena.
Hope Yormark(et) move will give him less influence with Thorn/Proky over not trading Yi.
The beat writers are finally addressing this issue of the dispute over Yi, in 2 articles from after Toronto loss.
Yormark's in China, I believe
question asked and answered
I have no problem with Yi. he’s on a rookie contract. i have more of a problem with two guys who make $18 million combined and contributing nothing.
Yi would make $5.4 million in 2011-2011 if Nets chose to extend him (when will that decision be made?). That would not be an easy decision this time.
Best to part with Yi before making that decision. If Kiki can’t maximize Yi’s trading value when giving him 38 min/game and lots of attention, how is his value going to go up next season when everyone agrees he will get limited minutes, if the new coach even puts him in the rotation??
However Simmons and Battie were known to be “throw ins” for getting someone else. At least Thorn tried to get rid of them but couldn’t. We still haven’t learned if Thorn tried to get rid of Yi or if he already knew there was no interest anymore.
My opinion is that Thorn is staying clear of the “trade Yi” issue until have Proky is in charge and contracts/coaches are settled.
Do you suspect it was Rod who made those anti-Yi remarks that Dave D. reported this weekend??
To put it another way, if Nets plan on keeping Yi for future, then his 2011-2012 $5.4 million salary could prevent Nets from getting LeBron or Carmello in 2011.
Would that make sense if the new coach keeps Yi out of the rotation anyway?
Meanwhile Nets are prepared to lose Dooling, who may have significant value to team winning next year, rather than pay him an extra $3.3 million or possibly a lesser amount.
Anotherwords, Yormarket could do all the Marketing in China he wants, but if the new coach doesn’t play Yi, China and Yi’s agent would be very upset. Nothing Yormarket could do about it.
Warriors up for sale?
Maybe the Warriors will have a fire sale just like the Nets did.
The only problem is the Warriors pick we own next year is protected 1-7.
We won’t be getting the pick if the Warriors stink.
The Nets luck continues. LOL
interesting
it appears that Larry Ellison, CEO of Oracle, is interested. He is worth $22 Billion. So he could spend wildly as well.
The Nets do not have the Warriors first round pick next year. They have the Warriors (unprotected) second round pick in 2011, then the Warriors first round pick (protected 1-7) in 2012. If they don’t get it in 2012, they will have the Warriors first round pick (protected 1-7) in 2013. If they don’t get it in 2013, they will have the Warriors first round pick (protected 1-6) in 2014…and if by 2014, they still don’t get it, they will get the Warriors second round picks in 2014 and 2016.
Sorry about the misinformation.
Thanks NI for correcting my bad info. I hate those protected picks. They should change that trade rule. It’s like having a “player to be named later” who might never be named. LOL
I've been following the Warrior situation.
Ellison wants to win. If anything, he will tell Cohan to keep the team as competitive as possible in order to facilitate his transition to making the W’s a winning team.
Also, I hear that he’ll try to build an SF arena. Probably transfer the Oracle name across the bay similar to how Orlando will be moving from Amway Arena to the Amway Center.
New collective bargaining agreement is simple. Give small markets a larger share of the national tv revenue sharing pie, limit MLE's to teams under the lux tax threshold, allow owners to terminate one deal every other year provided players have played at least 3 years on it and limit raises to 5 and 10%
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