Back in 2010, Mikhail Prokhorov bought the Nets for $223 million in cash; assumption of about $180 in debt $60 million in working capital for basketball operations. In return, he got 80 percent of the Nets and 45 percent of Barclays Center.
It was seen as a good deal, not necessarily a great deal. The Nets after all were a poor team in a poor venue. They had just come off a 12-70 season and played in what was fast becoming a decrepit arena, IZOD. Bruce Ratner, Prokhorov’s predecessor, had just resolved the most difficult of arena lawsuits and Barclays was starting to rise at Atlantic and Flatbush. The Nets would play in Newark the next two years, the NBA’s foster child.
Now, according to Forbes, there’s evidence the good deal became a great deal in the interim. The Nets and Barclays Center are now worth $1.8 billion, the seventh highest price tag in the NBA. Forbes estimates a profit of $15.7 million on annual revenue of $223 million, what they paid in cash for it all. (And Prokhorov’s Brooklyn Sports & Entertainment, after a series of agreements a year ago, now owns all of the Nets and Barclays along with 85 percent of the renovated Nassau Coliseum.)
It is arguably Prokhorov’s best investment. Meanwhile, every day brings news of another sale of his Moscow investments, the most recent on Tuesday when he sold 3.3 percent of his 17 percent stake in the world’s largest aluminum company, Rusal.
Bloomberg News has reported that the Russian oligarch’s wealth is increasingly centered in the U.S. as he unravels his interests in Moscow and invests in sports and entertainment assets in New York. He also reportedly has a hoard of cash. He’s worth around $10 billion.
Prokhorov is trying to sell up to 49 percent of the Nets and perhaps the arena. BS&E has hired powerhouse investment banker Allen & Co. to sell the minority stake. So far, league sources say there’s a lot of interest from far and wide but no indication that a sale is close.
Will he get what he wants? One league inside thinks he will, noting that none of the NBA’s big city teams, those in New York, Los Angeles and Chicago, are likely to be available anytime soon. So despite their record and the prospect of a long rebuild, the Nets are going to draw offers, big ones.
- Brooklyn Nets, No. 7 - Forbes