New details have emerged about Mikhail Prokhorov's investment in the Nets and Barclays Center and they indicate the team's new owner could, under certain circumstances, wind up an 80% interest in the arena, equal to the interest he already controls in the Nets. Under his agreement with Bruce Ratner, he will control 45% of the arena with certain "consent rights".
Standard & Poor's, the bond rating agency, issued a report Wednesday on the arena bonding, noting that Prokhorov has agreed to lend the arena operating company $75.8 million to complete infrastructure around Barclays Center. That's in addition to the $200 million Prokhorov has already invested in the Nets, the $175 million in team debt he's agreed to pay off and the $60 million in team losses he's agreed to eat while the team is in New Jersey. The loan may be needed to fill a gap between the half billion dollars in tax-exempt bonds and the money Bruce Ratner has sunk in the project.
As first reported by Norman Oder of Atlantic Yards Report, Prokhorov could, under certain circumstances, turn that loan into stock in the arena company, giving him control. Oder suggests, "Had that been announced during the approval process, it surely would have generated much more concern." A Nets insider says that the manner in which the deal is structured, "I think Mikhail could ultimately get control of the arena too."
Prokhorov filled arena financing gap - Norman Oder - Atlantic Yards Report