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Bruce Ratner believes Brooklyn Nets ...alone... worth $1 billion

By Net Income
Eliot Harrison

The investment banker hired by Bruce Ratner to sell his partnership's 20 percent stake in the Nets believes the team alone, not counting the group's interest in the arena, is worth $1 billion and is pricing the stake accordingly.

"We feel so confident on the billion … because every team will benefit from the new national TV deal," Lyle Ayes, managing director of Evercore Partners, told Sports Business Journal. The NBA is expected to get double its rights fee from national media with new deals after the current national agreements with ESPN and Turner Sports expire in 2015. Ayes also told SBJ that the Nets’ local TV deal with YES Network as a factor in the valuation. While the Nets get only $20 million from YES, it's believed there are provisions to up that number if ratings rise. SBJ also reports, the Nets and YES have begun negotiating a new agreement. The deal can expire in 2016, reports SBJ.

Although Forbes and others have valued the Lakers and Knicks as billion dollar teams, that number has never been tested in the market. The billion dollar mark Ratner has set for the Nets would be "far and away the highest price ever set for an NBA team," SBJ's Daniel Kaplan writes.

There are potential problems with the sale, Kaplan adds, including Mikhail Prokhorov's free-spending ways and concern over how geopolitical issues could effect the team. Based on public reports by Ratner's parent company, Forest City Enterprises, SBJ estimates the Nets lost $23.3 million last year.

One thing making the stake more attractive: SBJ hints that under the Nets partnership agreement, the two partners, Ratner's Nets Sports and Entertainment and Prokhorov's ONEXIM Sports and Entertainment, have the right of first refusal on the other's share in the team.

How much is the combined team and arena worth?  One investor in both tells NetsDaily that number could be #2 billion. However, the investor says separating the two won't be easy under the partnership agreement.

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