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Jason Kidd bought Jay Z's stake in Barclays as well as the Nets, say sources


Jason Kidd isn't talking much about his investment in the Nets other to say he believes it was a good investment.

"It's official. It's a great opportunity. That's it. Nothing too exciting about that," Kidd said at this week's availability with beat reporters. "I think you look at the product and where the brand is going. And I'm a big believer that it's going in the right direction. Like any investment, you want to continue to go with a company that's going in the right direction, and this is a company I feel that's going in the right direction."

Good enough, but we tried to get a little more detail this week. Here's what we learned.

First of all, we spoke to a few people about whether, as Forbes reported, Jay Z's share in Barclays Center was up for sale, that it was separate from the sale of his Nets stake. The response, it is not. Jay Z's stake in the arena and his stake in the Nets were sold in the same transaction.

Kidd and an investor who wishes to remain anonymous each bought half of Jay Z's stake in Nets Sports and Entertainment, the Bruce Ratner-led partnership that owns a 20 percent stake in the Nets and a 55 percent stake in Barclays Center. NS&E is a partnership with two main assets and by buying out Jay Z, Kidd and the other investor got a tiny share of those assets. Before Mikhail Prokhorov bought a stake in the Nets, NS&E owned 100 percent of both and so when Prokhorov bought it, NS&E's stake was diluted.

According to an NS&E investor we spoke with, Kidd now owns 0.42 percent (roughly 2/5ths of one percent) of NS&E which in turn gives him a 0.08 percent (roughly 1/12th of one percent) stake in the team and 0.23 percent (roughly 1/4 of one percent) stake in the arena. The disparity is due to the larger NS&E stake in the arena. In addition, NS&E reportedly will own a stake in Nassau Events, LLC, which is rehabbing the Nassau Coliseum, through NS&E.

Smart investment? You bet. Jay Z needed to sell quickly. He had to prove to leagues and players unions that he had no conflict of interest. So he smartly sold out at a good, if not market, price. Agency fees on Robinson Cano's new deal are likely to far outweigh the value of his Nets/Barclays stake. The arena investment could be the bigger value, said multiple sources. It's already making money. The Nets are losing, according to one published report, $50 million a year. Also, the NS&E stake in the arena is larger.

Long term, don't be surprised, said the investor, if larger sports or real estate investment firms get interested in buying part of NS&E. The Nets and Barclays Center are hot properties, with internal estimates of the value of the team at $750 to 800 million and the arena at $1.1 billion, rising to $1.25 billion when the Islanders move in. Before Prokhorov bought in, laying out $223 million in cash for his stakes in 2010, the value was basically limited to the team's value if sold. Since at that point the team's debt load was nearly equal to its value, there wasn't much.

Both Kidd and the other investor --an avid reader of NetsDaily-- are happy with the deal. So are their partners, Mikhail Prokhorov and Bruce Ratner. The more high profile investors the better.