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.
Dodgers source says "we don't see any transaction likely to occur re: the Brooklyn Nets"— Ramona Shelburne (@ramonashelburne) October 2, 2014
But Shelburne later tweeted the Dodgers Chairman and Guggenheim investor noted the Nets are a great asset.
Dodgers Chairman Mark Walter: "As for the Nets, I have not seen their numbers. They are a terrific franchise (cont'd)— Ramona Shelburne (@ramonashelburne) October 2, 2014
Walter (cont'd): "I would be happy to look at their information & any proposal anyone wanted to make to me -- as I would with any proposal.— Ramona Shelburne (@ramonashelburne) October 2, 2014
- Dodgers ownership group Guggenheim Sports and Entertainment in talks with Nets: report - Stefan Bondy - New York Daily News
- LA Dodgers owner in talks to buy Brooklyn Nets - Tim Bontemps & Josh Kosman - New York Post
- Mikhail Prokhorov reportedly considering selling Nets - Rod Boone - Newsday
- Report: Nets owners in talks with Dodgers owners - James Herbert - CBS Sports
- Ownership Groups of Brooklyn Nets, Los Angeles Dodgers in Negotiations - Alex Raskiin - Wall Street Journal
- Dodgers’ owners eye Nets - Andy Vasquez - The Record
- Nets in talks with ownership group - Brian Erni - SNY Nets
- Reports: Prokhorov could listen to offers - Greg Hrinya - Examiner
- Los Angeles Dodgers wouldn’t be first baseball partner for Nets franchise - John Brennan - The Record
- Brooklyn Nets ownership discussing combining assets with Dodgers' owners - Sports Illustrated
- Report: Owners of Brooklyn Nets, L.A. Dodgers discussing 'combination of assets' worth billions - Dan Devine - Yahoo! Sports
- Report: Mikhail Prokhorov looking to sell Brooklyn Nets - Kurt Helin - NBC Sports
- So is Proky leaving the Nets or not? - Max Rodriguez - The Brooklyn Game
- Russian Billionaire Prokhorov in Talks to Sell Brooklyn Nets Stake - Moscow Times