Blackstone Group, one of the world's largest private equity groups, is working with the Nets and Barclays Center to refinance some of the two entities' debt, reports the New York Post. The Post did not discuss whether Blackstone or its partners would be interested in an equity stake or a role in brokering a sale or partnership.
Led by its billionaire CEO Steven Schwarzman, the firm is buying up old team and arena loans, reports Josh Kosman. Also, Schwarzman is considering helping the Barclays Center rework its $511 million construction debt. Negotiations are apparently underway on that deal. By lowering the interest rates on the debt, Blackstone would reduce the team and arena debt payments and help its profit-and-loss picture. It's been reported that a large part of the Nets $144 million loss last season was directly related to debt payments.
According to the Post, Schwarzman recently refinanced $60 million of Brooklyn Nets debt, part of the team’s $210 million indebtedness. The $60 million loan was coming due, and Blackstone had the most enticing offer, sources told the Post. Mikhail Prokhorov agreed to finance 80 percent of the Nets debt when he bought the team in 2010. At the time, it was the biggest debt load of any NBA, in terms of both raw dollars and as a percentage of team equity.
The group's interest doesn't end there. Kosman reports Blackstone has lent the Brooklyn Nets new Industry City practice facility $50 million, citing a source. The Nets declined to comment, according to the Post.
Would Schwarzman be interested in a piece of the team or arena? Kosman doesn't suggest that, but the Guggenheim deal is apparently dormant, at best. Analysts suggest that nothing is likely to happen with the Nets until after the Atlanta Hawks sale is completed. The price tag for that franchise could be as high as $1 billion, suggested Sports Business Journal this week.
- Blackstone Group is the Barclays Center’s white knight - Josh Kosman - New York Post