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September 17, 2009

NBA-Russia's richest man eyes Nets deal

by Polina Devitt and Anastasia Onegina

Reuters' Moscow bureau is the source for a story on what would be the ultimate Bruce Ratner bailout.

Russia's richest man Mikhail Prokhorov is preparing an offer to help the New Jersey Nets build a new arena and sources close to him say he could own a large stake in the NBA club as part of the $700 million deal.

A spokesman for Prokhorov's Onexim investment vehicle confirmed on Thursday it had been approached to participate in building the Nets' long-awaited arena in Brooklyn and was preparing an offer.

"As we have said before, we have received interest from potential investors in the team," Nets CEO Brett Yormark said in a statement. "That interest is growing as it is clear that we are moving to Brooklyn."

Officials with the National Basketball Association were not immediately available to comment.

Prokhorov is considering issuing a bond worth $700 million through Onexim to help fund the project, one source close to the deal said.

The source said the bond must be issued before the end of 2009 so it is exempt from government taxes, adding: "This is a pure business story. The value potential of the club and arena are very high."

Another source familiar with Prokhorov's plans said the billionaire may end up owning a stake in the club as part of the deal.


NoLandGrab: There have been rumors about Prokhorov being interested, and not being interested, for several months now, and Bruce Ratner reportedly flew to Moscow early this summer to prostrate himself, no doubt, before the mighty Russian oligarch.

One thing is pretty certain, though — Prokhorov didn't become Russia's richest man by investing with boobs like Ratner. On the other hand, he could be eyeing the ESDC's "NY Loves Business" Atlantic Yards largesse like a kid in a candy store.

One more thing — the bit about Prokhorov issuing a bond seems a bit odd. Then again, the whole thing seems a bit odd.

Additional coverage...

ESPN True Hoop, Russia's Richest Man, A Cash-Strapped NBA Team

ESPN blogger Henry Abbott serves up a little cold water for the "done deal" crowd.

Reuters has been reporting on the possibility that billionaire Mikhail Prokhorov might infuse the Nets with the capital they need to become a presence in Brooklyn.

Is it real? Is the NBA really about to welcome an "oligarch" into the ownership club?

Who knows? But it is interesting to note that the Wikipedia entry on Prokhorov says that teams like to drop his name, apparently as a way of stirring other investors.

There's a global tendency to report that Mikhail Prokhorov is becoming a strategic investor of some companies or sport clubs with deep financial problems in order to attract an interest to their activities. New Jersey Nets and FC Roma are also in the list.

His name has been connected to the Nets for some time, along with speculation that he might not want to let the NBA dig into his finances as part of the ownership vetting.

The Moscow Times, Prokhorov May Fund NBA Stadium

Mikhail Prokhorov may help fund the construction of an arena for the New Jersey Nets, a spokesman for the billionaire’s holding company said Thursday.

Prokhorov, Russia’s wealthiest man and an avid basketball fan, is considering funding the stadium after being approached by someone involved in building Barclays Center, which is planned to go up in Brooklyn, Onexim spokesman Igor Petrov told The Moscow Times.

“The possibility exists” that Prokhorov will participate in the project, Petrov said, declining to say how much he would contribute.

Another source told Reuters that Prokhorov was getting a stake in the team as payment for a debt.

NLG: A stake in the team as payment for a debt? Wait, isn't this the Simpson's episode all over again?

Posted by eric at September 17, 2009 8:33 PM