An article by John Helmer, a Moscow-based writer and critic of Russia's oligarchs, was the latest to discuss the prospects of Mikhail Prokhorov selling the Nets. It didn't contain much news. Its main contention was that even if Prokhorov "dropped" his price to $1.2 billion, "there is still no buyer." Darren Rovell and Ohm Youngmisuk reported that a month ago.
A Prokhorov spokesperson was quite clear in declining comment to Helmer, writing for Business Insider. Prokhorov, said the spokesperson, "will not comment on this subject, and he has not commented on it before for anyone."
So what is the latest? Bottom line, as they say in the business world, is that Prokhorov would like to get some cash out of his investment in the Nets and the Barclays Center, but retain control of the team. Specifically, as NetsDaily reported a month ago, he wants to continue to be "governor and controlling owner" of the Nets. That's very specific NBA language defining control That's not going to be easy. Anyone willing to invest hundreds of millions of dollars in the Nets is presumably going to want some control now or at some point down the line.
Complicating the matter is that Bruce Ratner wants to sell his 20 percent of the team or a part of the 55 percent of the arena. Beyond that, everyone in sports is waiting to see how much the Atlanta Hawks owners fetch in their sale. Some have suggested a price in the neighborhood of $800 million and $1 billion. Until that happens, a lot of the money --and investors-- are on the sidelines, waiting.
Moreover, there is the geopolitical issue that Helmer describes. If Russian president Vladimir Putin wakes up some morning and decides he wants all his oligarchs to divest all US holdings, that could lead to a distress sale, at way below market rates. There's no evidence Putin is ready to do that but US-Russian relations are getting worse and the US sanctions over Ukraine as well as a liquidity crisis and a drop in the price of oil are biting.
The suggestion that Prokhorov was going to move his interest to a Russian-based firm never went anywhere. The only reason for him to do that was to qualify for office since a new Russian law prohibits those with foreign holdings from running for even Moscow's city council. And he has removed himself from electoral politics in the last year. (One thing Helmer got right was how several of Prokhorov's recent investments have not gone as well as hoped. In fact, his Brooklyn investment may have been his best in the last five years.)
All of that is why the Guggenheim deal or something similar was (is?) so appealing. The two sides would combine assets with the Dodger partners continuing to control the baseball assets and Prokhorov and Ratner continuing to control the basketball assets. Prokhorov and Ratner would have come away with some cash and a diversified portfolio. At best, those talks are dormant.
There's no indication Prokhorov or his No. 2, and Nets chairman, Dmitry Razumov have lost interest in the team. And if they do want to sell or merge or combine assets, it's imperative the team does well this season. The valuation of the team depends on it. So do the upcoming negotiations on local TV rights. The Nets ratings jumped by more than 250 percent the first year they moved to Brooklyn, then dropped 20 percent last season as the team got off to a 10-21 start. Opening Night numbers weren't very good at all, but the game was up against Game 7 of the World Series. LeBron James' return to Cleveland on Thursday drew 11 times what the Nets drew the night before. Monday's numbers might be more revealing.
To us, the most interesting story of the week was not the Helmer story in Business Insider, but the story Josh Kosman wrote in the Post about the increasingly close relationship between the Nets, Barclays Center and Steven Schwarzman of the Blackstone Group. So far, they've been dealing with debt refinancing, but analysts suggest that that's one step away from discussing equity, that is ownership, positions either for themselves or others.
Again, the bottom line: Watch this space.