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IT’S OFFICIAL: MIKHAIL PROKHOROV SELLING NETS, BARCLAYS CENTER TO JOE TSAI FOR $3.5 BILLION

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This story will be updated.

NBA: New York Knicks at Brooklyn Nets Brad Penner-USA TODAY Sports

Other than NBA Board of Governors approval, which is seen as a formality, Mikhail Prokhorov’s sale of a controlling interest in the Brooklyn Nets and all of Barclays Center to Joe Tsai is complete. The Nets announced the sale early Friday.

Although the Nets did not disclose the price, a league source involved in the transaction said the final price tag for the team and venue is $3.5 billion, by far the largest sum ever paid for a U.S. sports franchise. The $3.5 billion figure includes the value of the Nets, Barclays Center and more than $320 million in arena debt that Tsai will take over.

Prokhorov, a Russian, became the NBA’s first European owner in 2010. Tsai, a citizen of Taiwan and Canada, now becomes its first ethnic Chinese owner. Tsai is already a member of the board of directors of NBA China.

The Nets also announced that Brett Yormark, the team’s long time CEO is leaving, as reported Thursday evening.

Here’s the official release.

Mikhail Prokhorov has entered into a definitive agreement to sell full ownership of Barclays Center and his 51% controlling interest in the Brooklyn Nets, which he has held through his company Onexim Sports and Entertainment Holding USA, Inc., to an entity controlled by Joe Tsai. With the purchase of Prokhorov’s shares of the Nets, Tsai will become the sole investor in the team. Tsai purchased 49% of the Nets in 2018.

Upon the closing of the arena and team transactions, which is expected by the end of September, Tsai will assume the role of Chairman of the Board of Directors for Barclays Center, and NBA Governor of the Nets and its affiliates. The transaction requires the approval of the NBA Board of Governors.

The current management team will continue to run the venue and team under new ownership. Brett Yormark, CEO of BSE Global, will oversee the transition to new ownership before departing for a new role. Yormark will announce his next career move in the coming weeks.

Both Prokhorov and Tsai issued statements on the sale. Prokhorov who acquired control of the team and 45 percent of the yet unbuilt arena in May 2010, spoke of the “honor and joy” of bringing the team to Brooklyn ... even though the team won only one playoff series during his tenure and his final record as owner is 288-434.. Prokhorov also thanked Yormark for his efforts in the 14 years he’s served as CEO.

“It has been an honor and a joy to open Barclays Center, bring the Nets to Brooklyn, and watch them grow strong roots in the community while cultivating global appeal,” said Prokhorov. “The team is in a better place today than ever before and I know that Joe will build on that success, while continuing to deliver the guest experience at Barclays Center that our fans, employees, and colleagues in the industry enjoy.

“Without Brett’s innovative foresight and leadership, we would not be where we are today with the Nets and Barclays Center. Brett had always made it clear to me that when the arena and team sold, he would move on and begin his next journey. Thank you to Brett, who has been a true partner and friend over the past 15 years.”

Tsai credited Prokhorov with the team’s success, noting how far the team has come.

“I’ve had the opportunity to witness up close the Brooklyn Nets rebuild that Mikhail started a few years ago. He hired a front office and coaching staff focused on player development, he supported the organization with all his resources, and he refused to tank,” said Tsai, the executive vice-chairman of Alibaba, the Chinese e-commerce giant. “I will be the beneficiary of Mikhail’s vision, which put the Nets in a great position to compete, and for which I am incredibly grateful.

“I also want to thank Dmitry (Razumov, Nets chairman) and Brett for their guidance and friendship, and I hope to see them often in Brooklyn.” Tsai continued, “We are committed to maintaining Barclays Center’s iconic status by bringing together culture, community, and entertainment for our fans and everyone in New York.”

Yormark also issued his own statement ... and noted that he would continue to oversee Prokhorov’s other assets —Nassau Coliseum and two smaller venues: Webster Hall in Manhattan and Brooklyn Paramount Theater in Brooklyn.

“When I was hired nearly 15 years ago, my goal was to realize the vision for Barclays Center, move the Nets to Brooklyn, and build a world-class sports and entertainment company. It has been a tremendous honor leading BSE Global, and working alongside some of the most brilliant professionals in the industry,” said Yormark.

“I have always envisioned beginning my next chapter when Mikhail and Dmitry sold the arena and the team, and with today’s announcement, that time has come. I have the utmost confidence that Joe and his group, alongside current management, will continue to lead the way in shaping a strong future for Barclays Center and the Brooklyn Nets. While overseeing a smooth transition of Barclays Center and the Nets to new ownership, I will also continue to oversee Mikhail’s other Onexim assets.”

The transaction dwarfs other recent professional team sales, beating hedge fund owner David Tepper’s $2.2 billion acquisition last year of the NFL’s Carolina Panthers and Tilman Fertitta’s $2.2 billion purchase of the NBA’s Houston Rockets in 2017.

The $3.5 billion valuation of the team and arena represents about 35 percent of Tsai’s estimated net worth of $10.2 billion.

The deal also makes Prokhorov’s purchase of interests in the team and arena in 2010 one of the smartest investments in sports history. The Russian oligarch paid Bruce Ratner —and dozens of partners— $223 million in cash and took over $160 million in team debt to acquire 80 percent of the team and 45 of the arena. He also agreed to fund basketball operations to the tune of $60 million, $4 million of which was used to break the team’s lease at the antiquated IZOD Center and permit an interim move to Prudential Center in Newark. In December 2015, he later bought out Ratner’s remaining interests in the team and venue.

As owner, Prokhorov spent lavishly on the franchise, helping to finance the construction of the billion dollar Barclays Center and laying out $52 million to provide a state-of-the air practice facility for the Nets in Industry City, Brooklyn. He also bought an expansion franchise in the NBA G League for $6 million, planting it at the renovated Nassau Coliseum.

Most famously, he paid out $123 million in luxury taxes, including $90.6 million in the 2013-14 season, in hopes of building a championship contender in Brooklyn. That experiment ultimately failed miserably but Prokhorov recovered by hiring Sean Marks and Kenny Atkinson, which in turn led to his summer’s signings of Kevin Durant and Kyrie Irving.

For the fan, Tsai’s ownership, at least on the surface, shouldn’t bring many changes from the Prokhorov era which saw the team go from New Jersey and the worst venue in pro sports to Brooklyn and Barclays Center. Tsai has committed to supplying Marks and Atkinson with the resources needed to make the Nets a perennial championship contender.

“[Tsai and Prokhorov] have both shown the support we need from a basketball operations department,” Marks said in one of interviews after the signings of Durant and Irving. “The ultimate goal for everybody is to win the whole thing.”

Tsai is likely to be a far more public presence than Prokhorov whose visits to Barclays Center became few and far between in the last several years. Tsai, with a residence in La Jolla outside San Diego and his three children in U.S. schools, has attended Nets home and away games as minority owner, sometimes with his family.

Born in Taiwan, Tsai is also a citizen of Canada. In addition to La Jolla, Tsai also spends time in Hong Kong. He was educated almost exclusively in the U.S., and specifically the New York area He spent five years at Lawrenceville School outside Trenton, then earned his undergraduate and law degrees at Yale in New Haven, at the other end of the metropolitan area. He also met and married his wife, Clara Wu, a philanthropic investor, in New York before joining Jack Ma, a Chinese businessman, in founding Alibaba, the giant and wildly successful Chinese e-commerce company.

Tsai will also be generally more visible in the media. Prokhorov hasn’t spoken publicly to the New York media in more than three years, (although he took questions from NetsDaily fans just after the big signings.)

Tsai, meanwhile, spoke to the city’s sports media back in May about both his investment in the Liberty and the Nets. On non-basketball matters, has become somewhat of a fixture on newspaper business pages and business cable, often criticizing President Trump’s China trade policies.

The purchase of Barclays would seem to be good news for the Liberty and WNBA. Tsai purchased the Liberty in January from James Dolan. Dolan, as part of cost-cutting, moved the team to Westchester County Center, which cut attendance by three-quarters. Now, the way is clear for him to move the team to Barclays. Last week, the Liberty attracted 7,715 fans to the Brooklyn arena.