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Nets now sixth most valuable NBA franchise

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Toronto Raptors v Brooklyn Nets Photo by Alex Trautwig/Getty Images

The Nets last season in New Jersey, 2011-12 the Nets were one of the NBA’s middling franchises, nothing special, valued at $312 million, according to Forbes. Worst, the team’s value hadn’t really budged in the eight years Bruce Ratner had owned it. The Brooklyn arena was stuck in court and needed financing.

Then, with Mikhail Prokhorov in charge, the team moved to Barclays Center and with the combination of the New York venue and the NBA’s explosion in revenue, the value jumped. So much so that in Wednesday’s ranking of team valuations, the Nets are now valued at $2.235 billion ... seven and a half time higher than the day they left Newark.

The valuation, based on what Joe Tsai paid for a 49 percent stake in the franchise, put the Nets between the Celtics and Rockets. Still, that’s only about half the value of their cross-town rivals, the Knicks, who are valued at $4 billion, tops in the league..

Here’s Forbes’ thumbnail of what makes the Nets valuable...

The NBA approved the sale of the Nets to Joe Tsai in April 2018. Taiwanese billionaire Tsai, who cofounded Alibaba, bought 49% of the franchise, with the option to assume majority control in three years. The deal values the Nets at $2.3 billion. Mikhail Prokhorov paid $365 million for 80% of the team and 45% of Barclays Center operating rights in 2010. He purchased the remaining stakes in the Nets and Barclays at a valuation of $1.7 billion in 2015. The sale to Tsai does not include the operating rights to Barclays, but a new lease was completed ahead of the sale to allow some arena revenue to flow to the Nets.

Here’s some details drawn from the Forbes report...

—The purchase by Tsai, a Taiwan native and citizen of Canada, shows “the sport’s global popularity expands the investor pool as well.”

—The Nets operating revenue is finally making its way into the black, earning $53 million last year, before interest, taxes, depreciation and amortization. In 2015, the Nets lost $99.4 million. That year was also the high point for player expenses, at $115 million. Last season, it was $106 million.

—Brooklyn was one of four NBA teams that kicked off new local TV deals last season at more than double their previous take. The Nets receive ”substantially more” than the $20 million they had previously received, as we reported.

—Two big reasons why the Knicks have a substantial value is the differential between the Knicks and Nets’ brands. Forbes puts the value of the Knicks brand at $563 million, the Nets at $211 million. Similarly, the Garden is valued at $995 million, Barclays at $577 million.

—The Nets have a low debt load, nine percent, among the lowest in the NBA. The Kings debt load is 34 percent of the team’s value.