Alibaba’s Joe Tsai buys Brooklyn Nets in $2.3 bn deal
Alibaba Group Holding Executive Vice Chairman Joe Tsai has agreed to buy 49 per cent of the Brooklyn Nets from Russian billionaire Mikhail Prokhorov in a deal that values the National Basketball Association club at a record $2.3 billion, according to people familiar with the matter.
The agreement gives Tsai, whose net worth is $10.7 billion, the right to buy the remaining stake of the team in 2021, according to the people, who asked not to be identified because the deal hasn’t been announced. Prokhorov has the right to keep a 20 per cent stake in the team, the people said. The Nets declined to comment. The transaction doesn’t include the Barclays Center, the Brooklyn arena where the team plays, the people said.
The price tag is $100 million more than the record $2.2 billion Tilman Fertitta paid for the Houston Rockets last month. That deal included operational control of the team’s arena.
In 201O Prokhorov’s Onexim Sports & Entertainment paid $223 million for an 80 per cent stake of the team and a 45 per cent share of the arena that, for now, also houses hockey’s New York Islanders. In 2015 the Russian billionaire consolidated ownership of the team and arena. That purchase from real estate developer Bruce Ratner’s Forest City Enterprises valued the team at $875 million and the building at $825 million, including debt.
The team is worth $1.8 billion, seventh in the 30-team NBA, according to Forbes’ most recent valuations. Prokhorov has a net worth of $11.3 billion, according to the Bloomberg Billionaires Index. ESPN earlier reported on the sale. The first non-North American owner of an NBA team, Prokhorov had, at his introductory press conference in 2010, said the Nets would win a championship within five years. They didn’t. The Nets haven’t had a winning season since the 2013-14 campaign, finishing last season with a 20-62 record.
On-court struggles aside, the sale comes at a time of ballooning franchise values across sports, a boom fuelled in large part by media rights. Even with ESPN losing subscribers, those so-called rights fees show no signs of abating as new bidders such as Amazon.com, Facebook and Twitter wade into the distribution of sports content, including live games. And many would-be owners say that legalised sports betting, which NBA Commissioner Adam Silver has said is inevitable, will be worth billions to the major US sports leagues.
The would-be buyer is getting something rare: a major professional sports team in New York, the nation’s number one media market. It’s unlikely that any of New York’s other marquee teams — the Jets and Giants, baseball’s Yankees and Mets, or basketball’s Knicks and hockey’s Rangers — will be on the market anytime soon.