Russian Billionaire Mikhail Prokhorov to Sell the Brooklyn Nets
Mikhail Prokhorov, the Russian billionaire who owns the Barclay Center as well as the Brooklyn Nets, has been on the lookout since November for an investor to take on a share in the arena as well as the NBA team. Now, after being unable to sell a minority stake, Prokhorov has decided to unload the team altogether, agreeing to relinquish his controlling stake. As per the NY Post, the 52-year-old is seeking roughly $2 billion for the Nets. The sale, as per Prokhorov's plan should consist of two phases. He would still like to first sell a minority share, and then deliver full control in a few seasons. There is a catch, however. The sale will not include the Barclay Center, which he wishes to keep.
Forbes valued the Nets at $1.8 billion in February. The Barclays Center accounts for over $551 million of that total. The actual Brooklyn Nets brand is valued at only at $186 million. Just being in the NBA in the New York area accounts for more than a $1 billion of the team's value. This explains the irony of how the Nets are one of the most valuable NBA franchises, despite concurrently being one of the least profitable.
The Barclay center is a money making arena. It is considered among the world's top-grossing concert venues. This month Ed Sheeran and Paul McCartney have concerts scheduled which will fill to capacity and charge high ticket prices, unlike the Nets games. The Nets have recently renewed their lease at Barclays with a clause allowing the team to pay less rent.
Last season, the Nets compiled the worst record in the NBA. Further, the Nets are expected to lose money next season. Prokhorov acquired the team in 2010, and took control of 100 percent stake in the team in 2015. When he first bought the team, he haughtily promised that within five years he would bring them an NBA title. It was a promise he could not deliver, and he is clearly disappointed.
The recent sale of the NBA's Houston Rockets for $2.2 billion to Tilman Fertitta must be emboldening Prokhorov to believe he could sell the Nets for $2 billion. The Rockets were at least a profitable team. Potential investors, which will likely be Wall Street types, will await details of the new Nets Barclay lease, as well as info on revenue the team will receive from sponsorships and suite rentals. Time will tell if point guard D'Angelo Russell, who was traded in from the L.A. Lakers this June, will add value to the team.
Mikhail Prokhorov, the Russian billionaire who owns the Barclays Center as well as the Brooklyn Nets, has been on the lookout since November for an investor to take on a share in the arena as well as the NBA team