The New York Post reports Friday that Joe Tsai wants to accelerate his purchase of the Nets and buy both Barclays Center and Nassau Coliseum from Mikhail Prokhorov.
Josh Kosman and Brett Cyrgalis write that Tsai, who bought a 49 percent stake in the team last April, would take take over the Nets from Prokhorov who’s controlled the organization since May 2010. In addition, the Post says Tsai, who has no interest in either of the arenas, would buy out the Russian oligarch’s interest in both.
Under terms of the original agreement governing the sale of the minority stake, Tsai would have had an option to buy control of the team in 2021. The Post report indicates that has now been sped up. In January, Tsai led a group that bought the New York Liberty from James Dolan. If he succeeds in buying out Prokhorov, he would be among less than a handful of NBA owners to control an NBA franchise, WNBA franchise and home arena. It would make him one of the more powerful league voices.
The transaction would have to be worth billions. Tsai, the executive vice chairman and co-founder of Chinese e-commerce giant Alibaba, would pay a reported $1.35 billion for the remaining stake in the team, according to The Post. Adding the two arenas would require an investment at least another $1 to $2 billion. Tsai, 55, has a net worth of around $10 billion.
Quoting “a high-ranking sports executive familiar with the talks,” Kosman and Cyrgalis write that a sale to Tsai “would be embraced by the NBA,” which would like Tsai help the league grow in China. Tsai is already a board member of NBA China, a $4 billion entity that manages the NBA business in the People’s Republic. Tsai holds both Taiwanese and Canadian citizenship and was educated in the United States with undergraduate and law degrees from Yale.
He and his philanthropist wife, Clara Wu Tsai, have taken a more active role in recent months. Tsai has attended home and away games, reportedly including last night’s contest in Philadelphia. Last week, his wife hosted the Nets at a reception in Los Angeles.
The Post did not discuss Prokhorov’s motivation in selling the team but other Russian oligarchs have been sanctioned by the Trump administration, limiting their ability to operate US-based businesses. Although Prokhorov has not been sanctioned and there’s no indication any such action is imminent, the threat remains.
“The league would be ecstatic,” Kosman and Cyrgalis quoted a source regarding the possibility of a takeover.
The two reporters also quote a research note from Moody’s, the investment service, that under an agreement signed with the NBA last year, Tsai and Prokhorov agreed to provide the Nets with the extra funding the team needs to meet its expenses and payment obligations,
The Nets have never made money under Prokhorov’s ownership. Similarly, Barclays Center has had disappointing results.
A spokesperson for Brooklyn Sports and Entertainment, Prokhorov’s holding company, disputed the report, telling NetsDaily, “the story is wrong,” but provided no further details. In Moscow, TASS correspondent Andrey Kartashov said a source denied the story.
Source close to Prokhorov refutes media allegations on Barclays Center @barclayscenter sale talks with Alibaba's Tsai @joetsai1999— Andrey Kartashov (@LeDr0n) March 29, 2019
Kosman, a Post business writer, was among the first to report that Tsai was interested in buying a piece of the Nets.
Prokhorov agreed to buy an 80 percent interest in the Nets and a 45 percent interest in Barclays Center from Bruce Ratner in September 2009 for $223 million in cash plus the assumption of $160 million in team debt. He played a big role in getting the arena built and spent more than $125 million in luxury taxes in hopes of winning a title, an effort that failed. He also paid out more than $50 million to create the HSS Training Center.
- Joseph Tsai in talks to buy Barclays Center, become majority owner of Nets - Josh Kosman and Brett Cyrgalis