As John Torenli of the Brooklyn Eagle notes Wednesday, Joe Tsai’s record of making big investments in Brooklyn — and his sports teams— suggests that when the luxury tax bill comes due, he’ll be ready to write the check despite some skepticism among pundits that he’ll be “skittish.”
Torenli ticks off what Tsai has spent —or agreed to spend— on the borough and the teams it represents...
The Nets and New York Liberty owner has already joined with his wife, Clara, to donate millions of masks, hundreds of thousands of goggles and 2,000 ventilators to aid our borough’s residents during the ongoing COVID-19 pandemic.
The billionaire co-founder and executive vice chairman of Alibaba Group has also agreed to pay his Barclays Center employees through the end of the year, despite the fact that the Downtown arena has been shuttered since March.
Tsai and his wife even made a whopping $50 million donation to social justice causes back in August.
And that tally doesn’t include the donation of 12 tons of Barclays Center food to city food banks, seven last week. There’s also been no accounting of how much he and Clara have laid out other than the $50 million Social Justice Fund and the $7 million price tag for the ventilators back in March. It’s been estimated that the cost of keeping all the arena employees on the books through the end of the year (at least) will cost him another $10 million.
So the point Torenli makes —and it’s a valid one— is that the Nets co-owner with his wife, Clara Wu, can be counted on to make luxury tax payments when they come due.
Earlier this year, when Tsai was asked whether or not he’d be willing to go above the NBA salary cap in an attempt to capture the Nets’ first-ever NBA championship and Brooklyn’s first major pro sports title since 1955, he didn’t mince words.
“We know the fans expect us to win a championship … if we pay luxury tax, so be it.” he revealed. “And the good thing is I believe that we do have the pieces in place [to win a title].”
Torenli also noted Tsai has said it more than once, as has Sean Marks, presumably with the boss’s approval.
“We’re going to be a tax team. We are married to that,” said Marks. “There’s a limited amount of times and ways you can continue to add to your team. You better do it now. You’re gearing up for a run.”
And of course, Tsai has already shown he’s willing to slap down the big bucks on basketball, buying the Nets and Barclays Center for more than $3 billion and agreeing at the same time to hand out contracts worth nearly a half billion dollars to Kevin Durant, Kyrie Irving, DeAndre Jordan, Garrett Temple, Caris LeVert and Tauran Prince, all within months of agreeing to buy the team. He also purchased the Liberty for an undisclosed sum.
Why the need for all this assurance? Because in discussing the Nets fortunes, John Hollinger, among others, has suggested that Tsai may be “skittish” about the tax “while operating in a rickety financial environment.”
“Rickety,” of course, is a relative term. For Tsai, co-founder of Alibaba, this has been another good year financially. The league may have financial issues, but Tsai has added $3.5 billion in net worth so far this year after after adding $3.4 billion in 2019, bringing his total to $15.7 billion, per Bloomberg Billionaires Index. (He is likely to get even richer in the next couple of weeks when Ant Financial, a spinoff of Alibaba, goes public.)
As Torenli concludes...
Of course he can’t go out and play for them, nor can he tell neophyte head coach Steve Nash how to lead them.
But the one thing Tsai can do and has proved he is willing to do going forward is spend whatever it takes to make the Nets the best team in the sport and provide Brooklynites with a bit of comfort during one of the most disquieting eras in our nation’s history.
“Whatever it takes,” of course, is the question. Mikhail Prokhorov famously spent $90.58 million in luxury taxes to win it all in 2014 which only got the Nets to the second round. This team, of course, has a younger, more star-studded and deeper roster. But as Torenli writes, there is a track record.
- For Nets owner Joe Tsai, no price too high on road to Brooklyn title - John Torenli - Brooklyn Eagle