Mikhail Prokhorov is selling the Brooklyn Nets, according to Scott Soshnick of Bloomberg.
Estimates for what the team will sell for vary. Peter Schwartz, an expert in valuations, told Bloomberg that the team is worth $US1.3 billion.
Forbes has the Nets as the fifth-most valuable team in the league at $US780 million. But Forbes valuations have been really low in recent years. The Milwaukee Bucks sold for $US550 million when Forbes had them at $US405 million. The Los Angeles Clippers were valued at $US575 million by Forbes before they sold to Steve Ballmer for $US2 billion.
The Clipper sale, combined with the league’s unexpectedly lucrative new TV deal, suggest that the Nets sale is going to be a monster.
The Clippers are a way better basketball team than the Nets, but other than that there are some similarities between the two franchises.
Both are in premiere markets. Both have neighbouring teams with larger fan bases. Both play in new arenas (or new-ish in the Staples Center’s case).
It’s also important to note that Ballmer bought the Clippers before the league signed a new TV deal with ESPN and Turner.
The deal will pay the league an average of $US2.66 billion per season for nine years — a significant increase from the $US930 million per year the league made under the previous deal. Most expected the new deal to total $US2 billion per year.
About half of that new revenue will go to the players, but the rest of it goes to the owners. All 30 teams in the NBA stand to make an extra $US25 million per year from that TV deal alone.
Prokhorov lost $US144 million on the team during the 2013-14 season because he spent an unprecedented amount of money in luxury tax payments for going over the salary cap. But with the skyrocketing values of NBA franchises, it’s safe to assume his investment is going to pay off whenever he pulls the trigger on a sale.
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