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As US begins to sanction oligarchs, word that Vladimir Putin wanted Mikhail Prokhorov to sell Nets

New York Knicks v Brooklyn Nets Photo by Nathaniel S. Butler/NBAE via Getty Images

Brian Lewis and Josh Kosman of the Post report that Russian President Vladimir Putin forced Mikhail Prokhorov to sell the Nets as U.S.-Russian relations soured following the original Russian invasion of Ukraine in 2014. The pressure, the two write, ultimately led to the Russian oligarch to sell first 49 percent, then all, of his NBA holdings including Barclays Center to Joe Tsai over a two-year span from October 2017 through October 2019.

Events that led Prokhorov’s 2019 sale of the Nets and Barclays Center to Chinese billionaire Joe Tsai stretch back five years earlier, according to sources close to the situation. At the time, the US and European Union had begun to apply sanctions on Russia for taking over Crimea.

But as tensions between the US and Russia over Crimea grew, Putin in 2016 also began pressuring Prokhorov to sell the Nets, according to sources. That’s because Putin, especially during times of political turmoil, will test the loyalty of oligarchs with assets in the West to show they won’t get too close to the US or Europe, according to one source close to the situation.

The Post writers report Russian nationalism was also a key issue for Putin. Prokhorov was the most prominent Russian businessman in the United States at a time when bot Russian nationalism and anti-Americanism were on the rise. Privately, Prokhorov lamented the change from when he bought the team in 2010. Then, it was a source of pride as Prokhorov was the first European owner of an NBA team.

“Putin strongly suggested he sell the Nets,” the source said. And if Prokhorov refused, he risked losing his considerable assets in Russia.

“You couldn’t be pro-Russian and own an NBA team,” another source who knows Prokhorov said.

Prokhorov and Putin have a complicated relationship. As an oligarch, Prokhorov is dependent on the government — and Putin’s — favor. Among other things, Prokhorov championed the Russian biathalon training program ahead of the Sochi Olympics in 2014 and helped champion Russian industries as well.

However, Prokhorov also ran against Putin in the 2012 Russian presidential elections. Although many believed Prokhorov was a liberal foil for Putin and not a serious candidate, others note that after he garnered 8.8 percent of the vote (25 percent in Moscow) in the balloting, he tried to finance a new political party, Civic Platform, and perhaps run for the Mayor of Moscow. Both were slapped down by Putin loyalists.

There were indeed rumors of Putin’s displeasure with Prokhorov’s ownership of the Nets after US relations with Russia soured starting in 2014, four years after Prokhorov bought the Nets from Bruce Ratner, One source told ND at the time that Putin wanted Prokhorov to sell and that Prokhorov had relayed that information to NBA Commissioner Adam Silver. The same source however said the pressure ultimately relented.

At the same time, the Nets Russian ownership with that the U.S. government was threatening. In 2018, the US Treasury in discussing possible economic sanctions on oligarchs published a list of Russia’s richest that included Prokhorov’s name. Although people around Prokhorov feared that he could be sanctioned, he was not. If he had been, the US government would have seized control of the team and arena. (The Treasury list was reportedly compiled not from any intelligence reports but cut-and-paste from Forbes 400 list of the world’s wealthiest.)

Even before that, in August 2017, Prokhorov began talks to sell a 49 percent stake in the team to Tsai with an option for full ownership. In October 2019, Tsai agreed to close on the rest of the team and Barclays Center as well, with a price tag of somewhere between $3 billion and $3.4 billion.

In denying that Putin pressured Prokhorov to sell, a spokesperson for ONEXIM, his holding company, said the success of Prokhorov’s investment is what drove the sale.

“Mikhail had said for years before Joe Tsai appeared that he was open for discussion about the Nets. He was not pressured by anyone to sell, unless you mean the ‘pressure’ of the attractive offer he received for the team and the arena at the time,” said the spokesperson.

Prokhorov agreed to buy the team in September 2009, paying $230 million for 80 percent of the then New Jersey Nets, a 45 percent stake in the unbuilt Barclays Center, assumption of $160 million in corporate debt and agreement to finance $60 million of basketball operations over two years. When Prokhorov sold out a decade later, his capital gains were estimated at $2 billion dollars.

The current saga is in stark contrast with the welcome the Russian government had given Prokhorov when he bought the team in September 2009. Indeed, in the evening of the day Prokhorov’s purchase was announced, then Russian President Dmitry Medvedev approached President Obama at a reception for heads of state visiting the UN General Assembly to excitedly tell him a Russian had purchased the Nets.

During his near decade of ownership, Prokhorov, with aid of Dmitry Razumov and Irina Pavlova, finally moved the team to the billion dollar arena at Flatbush and Atlantic, built the $52 million HSS Training Center in Industry City, created a new G League team on Long Island and hired Sean Marks as GM.