Now that Mikhail Prokhorov, has said he has "no interest" in selling the Nets, the next question is, how much is he willing to spend?
Prokhorov has an estimated fortune, at least according to Forbes, of $10.9 billion. His No. 2 --and the Nets new chairman, Dmitry Razumov-- told a Russian business publication a year ago that number could be as high as $15 billion. That would match Forbes estimate of Trailblazers owner Paul Allen's wealth but be below that of Clippers' owner-in-waiting, Steve Ballmer, who's worth about $20 billion. Of course, none of those estimates are current and so don't take into account the jump in NBA franchise valuations. In other words, he has the money.
In that same interview with Kommersant last year, Razumov said Prokhorov and he enjoy the Nets, but wouldn't be spending so much if it wasn't a good business. "This is certainly fun. But we would not have gotten carried away if it did not bring money," said Razumov. They're losing money on the Nets but making it on the arena.
The big reason they're losing money on the Nets is the nearly $92 million in luxury taxes they will pay to the NBA next month. If they have to pay the repeater tax next July, that bill could be tens of millions higher. Even with a 1,000 percent rise in the value of his investment since 2010, that's a lot of money.
As Mike Mazzeo of ESPN New York wrote Saturday, "Prokhorov’s investment in the Nets from a business perspective has been a fantastic one. They are certainly worth way more than he paid for them," but some on the inside suggest he was not pleased with spending nearly $200 million ... and coming away with a second round loss.
Here's how to gauge whether they're still spending, starting on Draft Night. We included a wide range of possibilities.
--Do they buy into the second round of the Draft? They have $2 million and Billy King has said, he can get a pick with that. But Adi Joseph of USA Today reported Saturday "it's unlikely they'll trade into the draft," presumably the first round. That $2 million might get them a pick somewhere around the middle or the second round or maybe two picks in the 50's.
--Will they buy out a European contract if they like someone, as they did with Mirza Teletovic? The Nets paid out $800,000 two years ago to bring in Teletovic and Tornike Shengelia. If there's a player out there they want --and we are NOT suggesting it will be Mantas Kalnietis-- they can spent up to $530,000 per player. Unlike last year, Bojan Bogdanovic has no buyout.
--How much will they offer Paul Pierce? This is the big question. The Nets have his Bird Rights and can give him anything up to the maximum. But as they figure out how much to pay him, they have to also figure out whether Pierce's new deal will put them into repeater tax territory and cost ownership tens of millions more. He's unlikely to accept anything in the $5 to $6 million range, but if he wants $10 million, it could potentially cost the Nets a lot more in repeater tax money. More importantly, a fully guaranteed second year, 2015-16 would crimp them in free agency.
--Will they make an offer for Andray Blatche? He says he will opt out and has until June 29 to turn in the paperwork. Once a free agent, Blatche will no doubt get some offers. A rumor that the Pelicans had interest was shot down Saturday by John Reid, a respected Pelicans beat writer. They could offer Blatche up to six years and $25 million, which is simply out of the question. The Nets don't see him a reliable player. Would they match a small offer from another team? Is keeping him a priority ... at any price? Would it be a financial decision or a basketball one?
--Will they offer a buyout to Kevin Garnett? KG remains under contract, said King last weeks. Translation: until he tells me otherwise, he'll be in camp. Chris Mannix tweeted Saturday night that the Nets are operating on the assumption he will return. But would Garnett decide to stay behind in Malibu this October if the Nets offered him a buyout? When KG agreed to the trade last June, the Nets agreed to pay him his full salary this coming season. Under terms of his original deal with Boston, he could have opted out and receive a $6 million buyout if he retired. Have to think he'll want that ... or more.
--What do they do with the mini-MLE? King has said that retaining Shaun Livingston is the team's top free agent priority. It's been assumed that means offering him the full mini-MLE, but officially, no one has said that's what they will offer him. And of course who knows what the market price will be for Livingston? Will anyone offer him more? How much more? But, let's say he doesn't don't get an offer that big. Will the Nets low-ball him? And if Livingston goes elsewhere, what do they do with the mini-MLE? They don't have to use it.
--What's their priorities in trades? Do they want to bring back fewer dollars? Take Marcus Thornton, for example. Dealing Thornton for a player making less money is one way to cut down on salary. He makes $8.575 million next year, sixth highest on the team. He has value after he played well, at least in the regular season. He's only 27.
The way the luxury tax -- and repeater tax -- work is the bill is based on a team's payroll on the final day of the regular season. So the February trade deadline will have significant consequences for the team. If the Nets are competitive going into February, don't expect the prospect of the repeater tax to slow them down, all things being equal. But if they are not competitive as the deadline approaches, they could start throwing bodies overboard, dumping high paying contracts for little in return. It's the easiest thing a GM can do. Might be painful, but it can be done.
Everyone, from Prokhorov on down, knew this was the big year for financial decisions. Let's see how the finances affect basketball decisions ... and vice versa.
- Offseason breakdown: Mikhail Prokhorov - Mike Mazzeo - ESPN New York
- 2014 NBA draft team needs: Brooklyn Nets - Adi Joseph - USA Today