Sports Business Journal reports Monday that the NBA has told Mikhail Prokhorov that if he is going to sell his majority interest in the Nets, he must also sell his minority interest in Barclays Center. The league's rationale is that the lease is so one-sided it would create a burden for the team.
Quoting multiple source and noting it has had part of the letter read to them, the SBJ reporters write...
The NBA’s instruction stems from a league rule on sales that would require the same ratio of team and arena ownership the Russian billionaire assumed in 2010 be replicated if he sells. He owns 80 percent of the Nets and 45 percent of the arena. It is possible that the league could issue a waiver on that rule, but it could not be determined the likelihood of such a move...
(T)he lease is onerous fothe team and a significant element of the team’s expenses.
The 37-year lease has long been viewed as one-sided, and thus favorable to Bruce Ratner who owns 55 percent of the arena as well as 20 percent of the team. It was negotiated as part of the 2009 agreement that led to Prokhorov acquiring his interests in the two Brooklyn properties. It has helped the arena make a profit --although less than projected-- and added to the team's losses, which are obviously more than projected. If the team were owned by others and the arena left in Ratner and Prokhorov's hands, prospective owners might find the team less attractive.
Indeed, SBJ's Daniel Kaplan and John Lombardo quote a "source close to the owner" as saying, "the NBA directive is one that will complicate his sale of the team."
However, there are ways around the issue, but none appear likely. The league could issue a waiver --and a big sale price for the team might make the league more amenable-- or the lease could be reworked. However, Prokhorov and Ratner would have to go to the arena's bondholders before that could happen and with half a billion in arena debt, they're unlikely to want to devalue one of the "key pieces of their collateral: the Nets’ lease," SPJ notes.
NBA tells Nets owner he must sell arena share - Daniel Kaplan & John Lombardo - Sports Business Journal