Reporting on the sale of the Nets to Joe Tsai has consistently noted that the Taiwanese-Canadian billionaire will acquire majority control of the team in 2021, with hints that Mikhail Prokhorov might retain a piece of the team going forward.
Not so. In a New York Times interview with Tsai, published Sunday, he says his ownership group has an option to buy all of the 51 percent of the Nets he didn’t acquire a year ago when he paid more than a billion dollars for 49 percent of the franchise. That deal valued the Nets at $2.35 billion, a record price tag in the NBA.
“Under the terms of the transaction, fully public, I have the option to buy the remaining 51 percent by early 2021,” he told Kevin Draper, a reporter who covers the business of sports in Asia. Porter noted that Tsai declined to comment further, or to comment on reports that he is looking to purchase the team and Barclays Center sooner than 2021. “I have that right, and that’s basically it. That’s what I want to say.”
It’s the first time we’ve seen Tsai confirm he’ll take full control assuming, as expected, he exercises the option.
Although Tsai did not provide a date in early 2021 for the proposed turnover, it appears to be January since he told Brian Lewis that he’s “very comfortable with the timeline we have set out at the original point of making the deal, which is in January 2021. Look, it’s only like 18 months away,”
Buying the 51 percent, whether in 2021 or sooner, would end Prokhorov’s financial interest in the team. The first Russian and European owner of an NBA franchise agreed in September 2009 to buy 80 percent of the team and 45 percent of Barclays Center from Bruce Ratner, completing the transaction in May of the next year. With a cash outlay of only $230 million —and the assumption of 80 percent of the team’s $200 million in debt— the deal is now seen as one of the most lopsided in recent pro sports history. Prokhorov bought out Ratner and other investors’ stakes in the team and arena in December 2015.
Under Prokhorov, the Nets moved from the IZOD Center to Prudential Center before finally arriving in the billion dollar Barclays Center in 2012. He also built the HSS Training Center in Industry City at a cost of more than $50 million and paid more than $120 million in luxury taxes. His ownership was marred by a number of disastrous moves on the court, but he has recently been given credit for hiring Sean Marks and Kenny Atkinson.
Also, in the interview, Tsai said he expects to slowly move away from his day-to-day operational role at Alibaba, the Chinese equivalent of Amazon, and focus on his sports teams. In addition to the Nets, Tsai, through J Tsai Sports, owns the WNBA’s Liberty and the San Diego Seals of the National Lacrosse League.
Tsai, 55, described the transition as the “next phase” of my life, telling Draper, “Today, I still have day-to-day responsibility, but over time, I suspect that I will delegate those day-to-day responsibilities to people in the company.”
He also said he will leave basketball operations to the professionals. The Nets extended both Marks and Atkinson over the past several months.
“Leaving the professionals to do what they do best,” is how Tsai described his management style to Draper. “I am well-versed in business. I have had 20 years at Alibaba; before that, I was in the investment business. But I can’t tell you whether this player is the better player to sign.”
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