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The Prokhorov Effect: The Most Interesting Man in the World

Who is Mikhail Prokhorov?

He is the most interesting man in the world!

Mikhail Dmitrievich Prokhorov is a singular figure in Russia and now the larger world...6'9" tall and thin, the Global Russian, very different from the short, dour New Soviet Man.

A billionaire 17 times over, he is called Russia's most eligible bachelor and is often seen in the company of some of the world's most beautiful women. He is quick-witted, charming and affable, someone who enjoys the spotlight, craves it in fact.  In a literary sense, he is more F. Scott Fitzgerald's Jay Gatsby than Boris Pasternak's Dr. Zhivago...more excess than asceticism...and although a Russian patriot, he wants to be seen as a man of the world.  He flies around the world in a $45 million Gulfstream V corporate jet and can't seem to keep track of his $45 million yacht.

He owns a large house in one of Moscow's new gated communities and a $30 million Alpine chalet in France. He is in a French court trying to retrieve a $30 million deposit he placed on the world's most expensive home, the $700 million Villa Leopolda, built for a Belgian king on the Riviera.

Prokhorov was not born that interesting.  He made himself that way.  He arrived a simple comrade, a citizen of the Soviet Union, on May 3, 1985. His family was part of the Soviet elite. He was a member of the Soviet sports committee and his late mother a scientist. And while privileged, his upbringing was nothing special for the day.  His parents sent him to English Special School No. 21 in Moscow. There, he received a gold medal and was recommended by the local Komsomol (Young Communist League) for admission to the Moscow Financial Institute, where he graduated with a first class degree from the International Economic Relations Department.

But before that, he did what other Soviet youth were required to.  For two years, 1983-85, at the height of tensions between the US and Soviet Union, he served in the Strategic Rocket Forces, the military unit charged with nuking the United States, and joined the Communist Party. It doesn't seem like he was ever much of a communist. While in college, he sold stone-washed jeans--his first capitalist venture-- under the brand name, "Yourself Jeans".

But all that presents only an inkling of who he is.  Let's start with the money.

How'd he get so rich?

Over the past decade, he’s been involved in the mining of nickel, palladium, gold and bauxite, from which aluminum is made. As commodity prices soared, so did his wealth, once estimated at $22 billion.

He didn't start as a "mining mogul", what he's now called. He started as a banker after graduation from college. 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, Prokhorov and a partner, Vladimir Potanin, saw an opportunity. They engineered the purchase of Norilsk Nickel through his then-small Onexim Bank. He was 28 at the time, Potanin slightly older. It was a bargain. It's how most of the oligarchs got their big break. Some succeeded more than others  He succeeded the most. 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 original investment in Norilsk.

Not everything is up to western standards. In spite of large-scale spending on pollution control technology--about $100 million according to the New York Times, Norilsk is still one of the world's worst polluters, emitting nearly two million tons of sulfur dioxide annually, more than the entire nation of France.

Then, following his detention on suspicion of prostitution in the French Alpine resort of Coucheval two years ago (more on that later), he was pressured by the Kremlin to sell his 25% stake in Norilsk. At the time, officials decided to favor his partner, Potanin, a less complicated and controversial figure. In Russia, political favor goes a long way in determining business success. The sale, completed just before the 2008 economic downturn, turned into a personal bonanza for Prokhorov.. He received nearly $5 billion in cash as well as stock in Polyus and stock and debt in RusAl, now the main sources of his net worth.  Recently, on a trip to France with Russia's President Dmitri Medvedev, Prokhorov joked "France occupies a special place in my life. Thanks to France, I have become very popular."

A few months ago, Prokhorov posted a video entitled, "I'm Free" on his YouTube and RuTube accounts making fun of his erstwhile business partner. It's worth viewing, if only for the archival video of the Nets' new owner singing and bar-hopping.

Does he enjoy the game?

He used to joke that when he received final NBA approval, he will become the first NBA owner who can dunk. (Bruce Ratner, we are reliably told, can not.) Unfortunately, Michael Jordan was named owner of the Bobcats just before he was named owner of the Nets. Yes,  Jordan can still dunk.

Prokhorov didn't play organized basketball past his Moscow school days. Watching video of him play in a charity game last spring, you can see he's not very athletic but has a pretty good basketball IQ. He's a decent post passer, for instance.

For more than a decade, he owned 25% of Euroleague champion CSKA Moscow and served as its principal owner. When he was forced to sell his stake in Norilsk, he lost his piece of CSKA too. 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 cut-rate roster he inherited). During his last four years as owner, CSKA won two Euroleague titles and got to the championship game a third time. They simply 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 posted on the sites. Same with 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 and went to the Vancouver Olympics to watch the biathletes compete. Before they left, he told them, don't come back without victory! Although they won only two gold medals, a disappointment, the rest of the Russian Olympic team won only one.  He used the opportunity to criticize the Russian sports establishment for not giving up the old Soviet sports model.

It was also a nice turnaround for another reason.  Last year, 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.  He says he helps with "finance and strategy."  He is also building a new $11 million training facility for 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 considerable evidence he actually lives that way!

He is driven but until recently somewhat private, perhaps burned by the controversy surrounding his detention in France. He might spend nearly $18,000 on lunch at a midtown restaurant but it was the restaurant owner who bragged about it, not him.  He might spend $30 million (not a misprint) on a vacation for him and friends in the south of France--as French media reported, but he won't confirm it or boast about it. Of course,he doesn't deny it either. He refuses to identify his favorite author, his favorite fictional character, even his favorite color! 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".  It's all part of a carefully crafted and well maintained mystique.

Although he personally does not use a personal computer (too much information) his staff maintains both a personal website and a personal blog, regularly posting how he feels on life and business.

He plays the guitar and reportedly has a "fine singing voice".

In spite or because of his success, Prokhorov doesn't dismiss the value of luck, telling CNN in 2008, "In business, you need to have luck...That's why it's very stupid to say there is no luck".  And he enjoys taking risks, noting on his blog last year, "The biggest risk in business around the world is the risk of being ineffective. If you can't work under these conditions then don't get involved. I am an aggressive businessman, and want the businesses in which I invest to grow many times in value. I take big risks, but because I work at a large scale, the opportunities for growth are also great."

Asked which "gift of nature" would he like to have, Prokhorov is less coy: "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 had the previous year. He was careful not to step on Ratner's feet before taking over the team.  Before embarking on a whirlwind tour back in May, he discussed the team's prospects only once, with SovSport. The Star-Ledger's Dave D'Alessandro give it his best shot in Vancouver. While respectful, Prokhorov said he has been instructed by his lawyers to say nothing about the Nets until he is approved.  Still, he must have liked Dave D's resourcefulness.  He posted the story prominently on his blog. Then, of course there was the "60 Minutes" interview and the big takeouts in Bloomberg and Forbes Russia magazines. It was a public relations tour de force, topped off by his New York press conference, which left sports writers slack-jawed.

Does he know what he's getting into with the Nets?

Yes. When a Russian sports writer reminded him of the Nets poor record this year, his response was, "I always thought it bad form to rejoice when someone loses. However, all these developments only reinforce the anticipation of our arrival."

As for the team's future, he is quite well informed. When the same reporter, Konstantin Boitsov, asked if he had speciific plans for the Nets, he replied, "Do you think that I blindly buy? I can’t discuss specific names because everything that is connected with the players can’t be discussed until the NBA Finals are over. However, in the next two years, 14 NBA superstars will be free agents. In addition, bad records last two seasons and a number of good trades have made our position in the draft very good – we can get two or three stellar newcomers. Finally, next year, we have the lowest payroll in the league. All this can not but give rise to some optimism."

Who are his basketball people?

Prokhorov has assembled a group of advisors from both Russia and the United States. Even before that, he had talks with a number of players and coaches about the NBA.  Pippen and Sabonis certainly count as experts. Pippen traveled to Krasnoyarsk in Siberia this January to help a Prokhorov-funded college basketball initative.

His best known NBA connection before buying the team was 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.

Prokhorov also maintains contacts with a variety of hoops hands from his days at CSKA. His old coach at CSKA Moscow, Ettore Messina, was rumored as a possible successor to Lawrence Frank last April, long before anyone was talking about Prokhorov buying the Nets.  Messina 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, who became a national hero in 2007 when Russia won the FIBA Europe championshp, is a protege of Pete Carril, the legendary Princeton coach and the author of the Princeton Offense.  But his heart belongs to Avery Johnson.

While still with CSKA, Prokhorov tried to hire Toronto Raptors assistant GM Maurizio Gherardini. The Raptors turned him down.

What is his management style?

His management style often involves gathering whatever information he can, holding it close, then making his decision in a very clear and precise manner.

"His actions for CSKA were limited to hiring the management, approving the budget, and the strategy," his CSKA publicist Nicolai Tsynkevich told D'Alessandro not long after the transfer of ownership was announced. "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, Kirilenko told the Salt Lake Tribune, "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, quite prophetically. "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."

When Kirilenko was asked about the Forbes estimate that he's worth $9.5 billion, the Jazz star replied that he probably has that much in cash!

He told the NBA Board of Governors he expects 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.Two of them are already involved with the Nets and may own a small stake as well.  Dmitry Razumov, a Russian who serves as Prokhorov's CEO, and Christophe Charlier, an Ivy League-educated economist who holds a French passport, are heavily involved with the Nets, Razumov more on the basketball side, Charlier on the business side..

His top two financial people are women and he chose Irina Pavlova to run Onexim Sports and Holdings. 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".

How it will interact with the Nets Foundation, or if it will, is uncertain.

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 Vladimir Putin.

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 mostly steered clear of confrontation with 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 and he received an apology from French authorities, apparently arranged by Putin.

But some of the details of that event, laid out by French and Russian publications, show a man whose lifestyle can only be described as jaw-dropping. Paris Match reported that when the women were detained and their luggage searched, lucrative caches of gifts were discovered, with values estimated between 20,000 and 300,000 euros. Komsomolskaya Pravada reported that Prokhorov engaged a "face patrol" at his favorite Courcheval haunt, "Les Caves", to filter out all but the most beautiful people.

When his sister was harassed and insulted by local youths at a foundation event last 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? Those responsible made their apologies to Irina."

Most recently, he has been engaged in a controversy over the use of one of the Soviet Union's--and Russia's--most historic icons: the Aurora, a Russian cruiser that fired the cannon blast launching the Russian Revolution in 1918. It is permanently moored to the shoreline in St. Petersburg. Revered during the Soviet era, it has fallen into disrepair.  Prokhorov rented it in June for an evening of merrymaking to celebrate the first anniversary of his new magazine, the Russian Pioneer.

The party became so rowdy that millionaires jumped or fell into the Neva River and had to be souped out by authorities. Museum artifacts were reportedly damaged. Prohorov's reaction to the resulting controversy? He offered to buy the ship and restore an article published in the same magazine whose anniversary he was celebrating.

Prokhorov is close to the Kremlin, although not necessarily Putin, say US officials who track such things. He is reportedly closer to Medvedev, a contemporary in age and demeanor. Through those Kremlin connections, he met with President Obama at a US-Russian Business Forum during the US President's visit to Moscow last year and again in Washington this year. He had previously met with President Bush on a similar visit in 2007.  How close is he to Medvedev?  During a September 23 reception in New York for heads of government attending the UN General Assembly, Medvedev informed President Obama of Prokhorov's intention to buy the Nets, revealed only hours earlier...then had his press secretary inform the Russian media of the Net-centric conversation!

How big is all this in Russia?

It's huge. 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 and of course after the Medvedev-Obama meeting.

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 was interviewed on several Russian channels back then, 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. As we now know, the Knicks beat the Nets to Mozgov's door.

Just how driven is this guy?

Asked by a Russian journalist what male quality he most admires, Prokhorov responded, "to be 'The Man'". A Russian television commentator asked him 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.