clock menu more-arrow no yes

Filed under:

JOE TSAI CLOSES ON NETS, BARCLAYS; HIRES DAVID LEVY AS CEO AND PREPARES FOR HIGHER STAKES

New, comments

The deal is done. Nearly two years after Joe Tsai agreed to a buy a minority stake in the Nets, he became owner— “governor” in NBA parlance— of the Brooklyn Nets on Wednesday morning.

The NBA Board of Governors approved the sale of the Nets to the Taiwanese-Canadian entrepreneur, ending Mikhail Prokhorov’s nine-year run. In addition, Tsai closed on the purchase of Barclays Center, which didn’t need league approval. According to various reports, the price tag for team and arena was somewhere between $3.3 and $3.5 billion.

To run it all, Tsai, 55, hired David Levy, the respected former head of Turner Sports, as CEO of the Nets, Barclays and J Tsai Sports, his holding company which also controls the New York Liberty and other sports investments in lacrosse and soccer. Levy also is now a “venture partner” in Tsai’s family investment vehicle, which the press releases didn’t name but presumably is Blue Pool Capital fund. In addition, Oliver Weisberg, who runs the Hong Kong-based Blue Pool, was named a Nets “alternate governor” as was Levy.

In statements and comments by Levy to NetsDaily and others, it’s increasingly clear that Tsai —and Levy— see the Nets as the centerpiece of a sports empire that could —long-term— hold interests in everything from other sports properties to sports technology and data, even sports betting. Levy laid out the plan in a team statement issued after the NBA approval,

“We have a tremendous opportunity to capture the growth of sports globally. J Tsai Sports is in a unique position to leverage our global resources and a strong portfolio of sports, entertainment and technology holdings to create value for our existing franchises as well as invest in new ventures for growth.”

Tsai also pointed out Levy’s broad experience in announcing his hire.

“David brings a unique combination of sports and media know-how, strategic thinking and operating skills to our sports and entertainment business,” said Tsai. “He is an entrepreneur at heart with the experience of managing and scaling organizations, and I really look forward to working with him,”

Adam Silver offered Tsai his congratulations after the vote, which took place late Wednesday morning. He also touched on Tsai’s potential to grow the league in China and elsewhere.

“We are thrilled that Joe Tsai is becoming the principal owner and governor of the Brooklyn Nets,” said the NBA commissioner. “In addition to being a passionate basketball fan, Joe is one of China’s preeminent internet, media and e-commerce pioneers and his expertise will be invaluable in the league’s efforts to grow the game in China and other global markets.”

Tsai first became interested in the Nets in late 2017, ultimately purchasing a minority stake of 49 percent in early 2018 for more than $1.1 billion. The agreement provided Tsai with an option to purchase full control in January 2021, but in recent months, both he and Prokhorov expressed an interest in moving up the deal —and adding Barclays Center. An agreement was reached a month ago to sell the team and arena, pending league approval which came Wednesday.

While there was a lot of talk about the future of sports, Tsai and Levy also spoke warmly of where the Nets are as they take over.

Tsai, as he has in the past, offered effusive praise for Sean Marks and Kenny Atkinson and the job they did in rebuilding the team from its 21-win season in 2015-16 to last year’s playoff team, which in turn attracted Kevin Durant and Kyrie Irving to the Nets.

“I’m honored to come into full ownership of the Brooklyn Nets,” said Tsai. “Sean and Kenny have done an extraordinary job building the team. They established the culture, developed talent others couldn’t see, and made Brooklyn the place where the best players want to play...

“We have an incredible group of players who want to win, and because of their talent and hard work, we are now in a great position to compete. I am thrilled to be partners with winners!”

In his NetsDaily interview, Levy also praised “the job that Sean Marks and Coach Atkinson have done” and he said he took the CEO job knowing Tsai “is willing to provide the resources and infrastructure needed” for the Nets continued success.

“I am looking forward to supporting them as we build a sustainable foundation of success on and off the court. I am excited for our fans and can’t wait to get started.”

Levy said his first priority is “better consumer experience,” explaining he wanted more “engagement” with all of the team’s fans, “from VIP areas for high-end fans” to “the average season ticket-holder.” (He suggested that he might explore “better ways to enter” the arena, a common complaint of fans.)

He noted as well that the best way to improve the team’s attendance, which has been woeful, was “winning games, getting into the playoffs.” He said that the acquisition of stars like Kevin Durant and Kyrie Irving will help the Nets bottom line in a lot of ways, not just on the court and in attendance, but also in increased and more lucrative sponsorships. So does a real rivalry.

“I love the fact there is that competitive crosstown rivalry on the floor because that also sells tickets and it keeps conversations going on sports shows and in magazines and newspapers,” Levy told Greg Logan. “But I think we’ll attract young fans to this team. If we’re winning on the floor, we’re going to get those fans. It’s just natural. It’s a big enough market. This story will continue to play out for sure this year.”

Both the official takeover and Levy’s appointment were no surprise. The vote by the board of governors was seen as a formality and Levy’s hiring had been reported by Adrian Wojnarowski. What is a bit of a surprise is the openness about the aggressive investment strategy Tsai and Levy are planning for J Tsai Sports. They want to take the company’s portfolio far beyond the Nets, Brooklyn and his other sports properties.

With today’s announcement, Tsai is already a big player in the NBA. He outright owns the Nets, Barclays Center, the New York Liberty of the WNBA, the Long Island Nets of the G League, the Nets Gaming Crew of the NBA2K League as well as Barclays and HSS Training Center. He is one of only two NBA owners to control franchises in all four NBA leagues and the arena where his NBA team plays. Ted Leonsis of the Wizards is the other. Tsai also sits on the board of NBA China.

Through J Tsai Sports, he also owns the San Diego Seals of the National Soccer League, the indoor soccer league, and has invested in the Premier Lacrosse League, the outdoor league. He is among several celebrity investors in the L.A.F.C. the Los Angeles entry in Major League Soccer. Tsai was also part of a group that attempted but failed to buy the Carolina Panthers last year.

In his interview with NetsDaily, Levy said, “On the investment side, we can leverage the building for esports, sports technology and data,”

As he explained to Brian Lewis...

“When a team is hot, the building gets hot. When the building gets hot, there are new opportunities around e-sports or other things you want to bring into the building. And it builds up Brooklyn.”

Levy even cited the possibility of Tsai’s businesses becoming involved in sports betting by developing a mobile gaming app or even setting up a sports book within Barclays Center. “Ultimately, sports betting will come to New York,” he noted.

He also threw out some ideas for promoting the Nets this season, like following Durant’s return from injury.

“Ultimately, I think there’s a good story around the comeback of Kevin Durant. ‘How does he rehab? What is he doing? How is he embracing himself in the community of Brooklyn?’ And I think Kevin is going to like that kind of thing,” he told Stefan Bondy.

Levy seemed most excited about entering the global sports technology and data businesses, a growing part of sports worldwide, noting how every fan wants increasing access to in-game data. While Prokhorov and Levy’s predecessor, Brett Yormark, were more interested in brick-and-mortar investments like renovating Nassau Coliseum and Brooklyn Paramount Theatre, Tsai and Levy seem more interested in digital investments.

“Live content is the future of television and television rights, all rights,” Levy told Lewis. “Live content is so valuable and quality live content like the NBA adds tremendous value from...a streaming perspective, a mobile perspective. That’s key in how we leverage the value of the Nets,”

Bottom line, Levy said the Nets fulfilled all four of his criteria for joining an organization: “a passion for the sport; working with people I want to work with; it’s set up for success and the availability of resources.”