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Brooklyn Nets in talks with Guggenheim, Dodgers owners, on "combination of assets"

By Net Income
Bruce Bennett

The ownership of the Brooklyn Nets is in "ongoing discussions" with Guggenheim Sports and Entertainment Assets on a "combination of assets." Mikhail Prokhorov would remain in control of the Nets and Bruce Ratner would remain in control of Barclays Center, say sources close to the discussions.

Guggenheim Sports and Entertainment Assets is an affiliate of Guggenheim Partners. Another affiliate, Guggenheim Baseball Management, own the Los Angeles Dodgers.

In the discussions, the team is being valued at $1.7 billion and the arena at $1.1 billion, said multiple sources. There is no agreement yet, nor a deadline for a conclusion of the discussions. The next step would be an agreement in principle followed by a closing. The combined assets of a new entity could be as high as $8 billion.

The discussions are continuing, said one source.  Another source says that Guggenheim's president, Todd Boehly, met in Moscow earlier this week with Prokhorov,  Ratner, and CEO Brett Yormark.

The first source emphasized that Prokhorov would continue to control the team as "governor and controlling owner" of the team "for the foreseeable future." Prokhorov currently owns 80 percent of the team and 45 percent of the arena, with Ratner's Nets Sports & Entertainment owning the remaining share of the team and the majority share in the arena. Presumably, in a combined entity, both Prokhorov and Ratner's shares would be reduced, but still be controlling.

The source did not describe "foreseeable future," but has said Prokhorov is heavily engaged in team's prospects this year.  Another source that Ratner is as engaged in arena operations.

How much Guggenheim would control after the combination of assets remains uncertain, as does the price the group would pay and how much Prokhorov and Ratner's group would each receive, said the first source. Also uncertain: would Nets ownership have any role with the Dodgers following a combination of assets. The combination of assets is a way for Prokhorov to retain control of the team while at the same time parlaying the assets into cash. He paid $223 million in cash for the team in May 2010.

Guggenheim Sports and Entertainment purchased controlling interest of the Dodgers in 2013 for $2.15 billion, the most ever for an American professional sports.  They have since expanded into entertainment with a stake in Dick Clark Productions.

So far, the only comment from Guggenheim/Dodgers comes via tweet from Ramona Shelburne of ESPN LA.

But Shelburne later tweeted the Dodgers Chairman and Guggenheim investor noted the Nets are a great asset.

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