Word that Jay Z has sold his stake in the Nets for as much as 10 times his original investment is the latest example of how, after years of being a black hole for investors, the Nets are a solid moneymaker. And the rise in value also explains why the Nets have been so willing to pay out big salaries and luxury taxes. The team's value has skyrocketed.
Don't take our word for it.
Back in April, the same week the Nets lost to the Bulls in the first round, two members of the Russian ownership group gave interviews to Moscow publications. The interviews didn't get a lot of attention, but maybe they should have. Irina Pavlova, president of ONEXIM Sports USA, and Dmitry Razumov, CEO of ONEXIM and Billy King's key contact point in Moscow, provided the rationale for the Nets' spending spree this summer: the team has dramtically jumped in value. It's not just about fun.
Irina Pavlova told Finparty, a Russian business magazine, that the rising players salary make annual profit difficult to achieve, but notes the Nets are probably worth $700-to-800 million.
"Since our move to Brooklyn, the Brooklyn Nets value has increased by 2.5 to 3 times. The (original) deal was estimated at $220 million, now it is worth $700-to-800 million. Forbes recently estimated us at $ 530 million, but it's has since been announced that the Sacramento Kings could be sold at a price above $ 500 million."
In an interview with Kommersant, Russia's leading business publication, Dmitry Razumov said Mikhail Prokhorov and he enjoy the Nets, but wouldn't be spending so much if it wasn't a good business.
Can the Nets be called a successful project?
"Certainly. it’s fascinating, and rising in value. By leaps and bounds.You shouldn’t smile. In fact, a good business. A new, beautiful, super-modern arena, the team playing in the biggest market in the world, and playing well. The new brand is already recognizable in the world. In a few months, it has created an audience of many millions. This year has breakthrough in terms of the revenue from ticket sales, sales of T-shirts, TV ratings, and so on."
Are you pleased with this story?
"Basketball? Very much."
This is a business or a hobby?
"This is certainly fun. But we would not have gotten carried away if it did not bring money."
Prokhorov went even further in talking to the Times after the Nets July 18 press conference, saying his investment had increased "minimum, fivefold," not the "2.5 to 3 times" Pavlova had suggested only three months earlier.
"That’s why I’m ready to invest more in order to make Brooklyn franchise the best in the league," he said.
Now, investors from Prokhorov to Jason Kidd will be watching to see whether their money has been well-spent.