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Joe Tsai to take on bigger role with Alibaba, effect on Nets uncertain

Brooklyn Nets v Los Angeles Lakers Photo by Kevork Djansezian/Getty Images

Not the breaking news one would expect two days before the Draft.

Joe Tsai, who seemingly was distancing himself from Alibaba, the company he co-founded and the source of his wealth, was instead named chairman of the board Tuesday, Alibaba announced.

Tsai had been executive vice-chairman of the board. Daniel Zhang, who Tsai had helped pick for the role of chairman and CEO, is out of both roles, being reassigned to run the company’s cloud operations.

The move was a surprise in one sense. Tsai and his new CEO, Eddie Wu, were both part of the group of entrepreneurs who founded Alibaba in 1999 along with the charismatic and controversial Jack Ma, who the Chinese government forced out of his role with the company more than two years ago.

Alibaba, called the Amazon of China, saw its stock skyrocket in the early part of the century, leading eventually to the then-biggest IPO in Wall Street history, the company raising $25 billion in 2014. However, after the BABA stock price rose to an all-time high of $300 a share in late 2020, a number of issues, including Ma’s falling out with Beijing, led to a dramatic spiral down. As of the markets’ close on Friday, Alibaba shares were going for $92.

How Tsai’s new role will affect the Nets remains uncertain. Neither the Alibaba announcement nor news reports indicated any change due to Tsai’s new role. In recent, months, it seemed like Tsai was stepping back from Alibaba, having his family investment vehicle and BSE Global parent, Blue Pool Capital, first divest itself of all U.S. stock holdings, then invest heavily in New York City real estate, buying two units at 220 Central Park South for more than $300 million, as well as a wide portfolio of other investments from a chain of hotels in Spain and Portugal to start-ups in bio-tech. Separate from his Blue Pool Capital, Tsai agreed to sell eight percent of his Alibaba holdings — roughly a quarter billion dollars — with the help of Morgan Stanley, the big investment bank.

Now, however, Tsai is likely to be intimately involved in Alibaba which after dominating online sales in China is facing new and aggressive competition from other Chinese companies. Presumably, Tsai will be spending more time in Huangzhou, where Alibaba is headquartered.

One possibility is that Clara Wu Tsai will take on a bigger role with the Nets. A native of Kansas who holds degrees from Harvard and Stanford, Wu Tsai played a significant role in the Liberty’s acquisition of Breanna Stewart, Jonquel Jones and Courtney Vandersloot, the WNBA’s first “Big Three.” She is listed on Nets directory as Vice Chairman, BSE Global, and referred to officially as co-owner of the Nets. However, she is not listed as co-governor or alternate governor of the Nets, only the Liberty. The Nets alternate governors are Oliver Weisberg, who runs Blue Pool Capital, BSE CEO Sam Zussman and Sean Marks.

A native of Taiwan and a citizen of both Canada and Hong Kong, Joe Tsai bought full control of the Nets and Barclays Center in 2019, paying Mikhail Prokhorov’s ONEXIM more than $3 billion. Separately, he purchased the New York Liberty which is managed separately from the Tsais other properties. He has been caught up in several controversies since taking over, most recently his and Marks decision to twice suspend Kyrie Irving, the first time in 2020 for failing to get the COVID vaccine, then again last year when Irving posted a link to an antisemitic video. First Irving, then Kevin Durant were traded at the NBA trade deadline in February.