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Prokhorov, Ratner reach 'agreement in principle' on consolidation

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Anthony Gruppuso-USA TODAY Sports

NetsDaily can confirm that the Mikhail Prokhorov and Bruce Ratner have reached an "agreement in principle" to consolidate ownership of the Nets and Barclays Center in Prokhorov's hands, says a league source.  The proposal will now move to the NBA's finance committee which is expected to approve it by year's end.

Scott Soshnick of Bloomberg News broke the story early Wednesday morning.

Ratner's parent company, Forest City Enterprises, is converting to a real estate investment trust (REIT) on January 1 which limits the types of assets it can control. Neither a basketball team nor an arena fits the REIT model.

Talks between the two sides have been underway for months. Prokhorov currently owns 80 percent of the team and 45 percent of the arena. Last month, Prokhorov agreed to buy at least 85 percent of the Nassau Coliseum, with an option to buy the remaining shares once the arena reopens in December 2016. Prokhorov is expected to attend both the Warriors and Rockets next week.

The transaction, expected to involve the exchange of hundreds of millions of dollars, would expedite Prokhorov's plan to sell a minority stake in the team, perhaps as much as 49 percent.  League sources say Prokhorov has not been marketing that stake. One source told NetsDaily that based on the transaction, the team's valuation will be second only to the Clippers, who were sold last year to Steve Ballmer for $2 billion.