A Russian white knight seems to have rescued the New Jersey Nets’ plans for a move to Brooklyn.
Mikhail Prokhorov lost some $7 billion in the economic downturn, but is still worth $9.5 billion, making a $200 million, 80 per cent investment in Bruce Ratner’s basketball team no sweat.
Prokhorov says on his blog the deal is a “very profitable business project.”
AP: Russia’s richest man has a deal to buy a controlling interest in the New Jersey Nets and nearly half of a project to build a new arena in Brooklyn.
Mikhail Prokhorov’s Onexim Group announced the deal Wednesday with Forest City Ratner Companies and Nets Sports and Entertainment. They say they have signed a letter of intent to create a partnership for the development of the Atlantic Yards Project.
According to the agreement, entities to be formed by Onexim Group will invest $200 million and make certain funding commitments to acquire 80 per cent of the NBA team, 45 per cent of the arena project and the right to purchase up to 20 per cent of the Atlantic Yards Development Company, which will develop the non-arena real estate.
Prokhorov would be the first non-North American NBA owner.
NBA commissioner David Stern praised the move, saying it will help the NBA expand globally and ensures that the Nets, whose current principal owner is Bruce Ratner, will have a new arena.
“Interest in basketball and the NBA is growing rapidly on a global basis, and we are especially encouraged by Mr. Prokhorov’s commitment to the Nets and the opportunity it presents to continue the growth of basketball in Russia,” Stern said in a statement.
The NBA will review the proposal, and the deal must be approved by three-fourths of the NBA’s board of governors.
Ratner and Prokhorov said in the joint statement they hope to have the sale completed by the first quarter of 2010.
“I have a long-standing passion for basketball and pursuing interests that forward the development of the sport in Russia,” Prokhorov said in a statement. “I look forward to becoming a member of the NBA and working with Bruce and his talented team to bring the Nets to Brooklyn.”
Stern said the league was looking forward to the Nets’ move to a state-of-the-art facility in Brooklyn. The team currently plays at the Izod centre in East Rutherford, N.J., a building that opened about 30 years ago.
Prokhorov, who owns a share in the Russian basketball team CSKA, was ranked as the country’s richest man in the Russian edition of Forbes, with an estimated fortune of $9.5 billion. He has weathered the global economic crisis better than many of his wealthy compatriots by cashing out of some lucrative assets before the downturn battered commodity markets.
According to Forbes, his fortune shrank by some $7 billion — a breathtaking loss by most standards, but mild in comparison with some Russian oligarchs. Roman Abramovich, who as owner of Chelsea is Russia’s best-known international sports magnate, lost more than $9 billion, and Oleg Deripaska, a rival in Russia’s metals business, lost around $35 billion.
Prokhorov’s interest in basketball isn’t only as a spectator. The 44-year-old was an avid player in his high school and college years.
He shot to prominence in the murky and chaotic early years of privatization deals that followed the collapse of the Soviet Union. In 1993, the Onexim bank that he headed acquired Norilsk Nickel, one of Russia’s huge but lumbering and inefficient industrial conglomerates.
Prokhorov’s stewardship saw Norilsk become more efficient and profitable. He resigned as Norilsk chairman in 2007 and sold off his shares for $7.5 billion, but retains substantial interests in other metals companies through Onexim, including shares in gold miner Polyus and Rusal, the world’s largest aluminium company.
Onexim’s other interests include real estate, insurance and energy.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.