Reuters, the British news agency, reports Monday that Mikhail Prokhorov is transferring ownership of the Nets from an American company to a Russian company, implying that's related to the Ukraine crisis. The US has begun sanctioning Russians, including oligarchs close to Russian President Putin, which could result on the seizure of their US-based assets.
Indeed, Prokhorov had considered transferring his ownership in the Nets (80 percent) and Barclays Center (45 percent) since last summer. It had nothing to do with the Ukraine crisis. Instead, Prokhorov began the process because a new law, instituted by the Putin-controlled Russian parliament, prohibits anyone from running for office in Russia if they own assets overseas.
NetsDaily reported on the move last June after Prokhorov announced he wouldn't run for mayor of Moscow because he didn't have time to move all his assets. He called the law "a trick" and many in Russia thought it was directly aimed at stopping him from re-entering politics after he lost to Putin in the 2012 presidential race. As we noted...
Prokhorov told Russian media that he intends to slowly begin moving his assets back to Russia to permit him to run in next year's Moscow City Duma (council) elections. Specifically, he said "American authorities" have agreed to let him transfer ownership of his Nets-related assets to "Russian jurisdiction." Currently, his 80 percent stake in the team and 45 percent stake in Barclays Center are held by ONEXIM Sports and Entertainment Holdings USA, a Delaware company headquartered in Manhattan. Such a transfer will not effect control of the team, said a team insider.
But Mike Bass, director of communications at the NBA, issued a statement Monday, stating nothing has happened, period.
"The Nets are owned by Mikhail Prokhorov through a US-based company. We have received no official application nor is there a process underway through our office to transfer the ownership of the Nets to another company," said Bass indicating that while the Nets considered transferring ownership, there's been no actual movement.
Richard Sandomir of the Times reports that if Prokhorov did want to transfer ownership to a Russian entity, it would be treated like a new purchase with all the parties subject to investigation and clearance by the NBA. Sandomir also writes there are no rules against teams having foreign owners but there are rules against teams being foreign-domiciled as would be the case with the Nets.
As for the Ukraine crisis, Prokhorov has laid low, offering a blog posting on March 6, before the Russian incursion into Crimea, suggesting Russia and the US solve the crisis through negotiations.
- Brooklyn Nets owner says plans to bring club under Russian jurisdiction - Reuters
N.B.A. Denies Clearing Nets to Become ‘Russian’ - Richard Sandomir - New York Times
- Mikhail Prokhorov plans to move Nets ownership to Russian company - Micheal Vinton - New York Daily News
- Billionaire Prokhorov Heeding Putin Call With NBA’s Nets - Bloomberg News