« Is Russia's richest man interested in the Nets and the arena deal? | Main | From "economic impact analysis" to "economic benefit analysis;" behind the ESDC's funny numbers and methodology »

September 18, 2009

Ratner Said to Be Closer to Selling Majority Stake in Nets

The New York Times
by Charles V. Bagli

The developer Bruce C. Ratner, who received final state approval Thursday to build an $800 million arena in Brooklyn for the Nets, is inching closer to selling a majority stake in the team to a Russian billionaire, according to two executives briefed on the negotiations.

Ratner, who bought the team for $300 million in 2004 with plans to move it to a new home in Brooklyn, has acknowledged in recent weeks that he is talking to potential investors. The arena, which would be known as Barclays Center, is the centerpiece of a planned 22-acre residential and commercial development project.

The executives said that Mikhail Prokhorov, one of the richest men in Russia and an avid sports fan, is the leading contender to buy a majority stake in the team and in the planned arena at the intersection of Atlantic and Flatbush Avenues.

The Nets, who play at the Izod Center in East Rutherford, N.J., declined to discuss potential investors.
...

Ratner has been eager to bring in new blood. His company, Forest City Enterprises, owns 23 percent of the team, which has endured about $380 million in pretax net losses over the past five years.

article

More grist for the rumor mill...

Russia Today, Russia’s richest man to acquire stake in New Jersey Nets for $1

One of Russia’s richest men, businessman Mikhail Prokhorov, is set to acquire a majority share in the New Jersey Nets basketball club for just one US dollar, reports Sport Express.

The Russian newspaper reports that the deal – giving Prokhorov a stake in the team – is almost complete.

In turn, Prokhorov, who is a former mining executive, will invest at least $700 in building a new arena for the Nets, Reuters reports.

NoLandGrab: Is it possible Prokhorov might be overpaying?

Field of Schemes, Russian rescue for Ratner's Nets arena?

New Jersey Nets owner Bruce Ratner's $200 million financing gap might be resolved soon, if Reuters is to be believed:

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.

This would, needless to say, solve Ratner's biggest problem, which is how to raise enough money to get his $900 million arena built, when he's only eligible for $700 million in tax-exempt bonds (or maybe not even that). The big question is: What would Prokhorov be getting in exchange for his $700 million? The entire Nets franchise is worth less than $300 million, so even a "large stake" wouldn't get him his investment back. (While a move to Brooklyn would increase the team value somewhat, even the Knicks aren't worth $700 million.) If the $700 million is mostly a loan, Prokhorov would get annual payments as well — but then we're back to asking where Ratner would get the money to pay off the annual cost, regardless of where he borrowed it.
...

Of course, it's also entirely possible that the entire story has been concocted to make the Nets project seem more viable, as ESPN.com notes has been the case in other instances where teams have dropped Prokhorov's name. Though Prokhorov and Ratner would seem to have one bond between them: They're both losing money hand over fist.

NBA Fanhouse, Majority Stake in Nets Being Sold to Russian Tycoon?

A report from Reuters Thursday afternoon asserted that Russian billionaire Mikhail Prokhorov was preparing an offer in the neighborhood of $700 million to purchase a stake in the Nets franchise and help build current team owner Bruce Ratner's Atlantic Yards project, which would include a new Nets arena in Brooklyn. A Prokhorov representative vaguely confirmed that the tycoon (Russia's richest man, at assets around $9.5 billion) could possibly participate in building a sports arena in the United States.

mcbrooklyn, Ratner, the Nets, and the Russian Billionaire

It also came out yesterday in Reuters that Mikhail Prokhorov, Russia's richest man, is putting together a deal to issue $700 million in bonds to help the team (and developer Bruce Ratner) build the arena. NBC New York says the Reuters story is "suspicious."

NBC New York, Russia's Richest Man to Pave Nets Path to Brooklyn?

The timing is curious, simply because everyone knows that the Nets have been losing money hand over fist for the last few years and that they'll almost certainly need outside investment in order to actually get the arena project off the ground. Prokhorov's name has come up before without any action, and it wouldn't be the first time that the name of one big financier was used to get other ones interested in beating him to what could wind up being a lucrative real estate deal with a basketball team thrown in for good measure. All Prokhorov's company spokesman would say is that he's considering an investment, which is probably true and isn't indicative of all that much.

The biggest reason to believe he might not be interested in a deal is that the NBA does a significant amount of vetting for investors in teams. Prokhorov, like all of Russia's oligarchs, has connections to government interests that he might not want to disclose to the likes of David Stern. Of course, Stern has seemed as desperate as Nets owner Bruce Ratner to get the team to Brooklyn so he might opt for a circumvented process if it helps get the arena built after long last.

HOOPSWORLD, Selling The Nets

It is believed Ratner's personal holdings in the Nets are what is being shopped to a potential buyer, and that could give control over the team to another group.

Minority investors in the Nets have told reporters for months that Ratner is aggressively shopping for cash, and that an outright sale of the team is possible, but it was more likely that Ratner would look to cash out his stake in the club to insure his Atlantic Yards project gets funded.

SLAM Online, Russian Billionaire Wants to Buy the Nets

From Russia, with boatloads of money....

AP via ESPN.com, Tycoon considers giving loan for Nets

Russian billionaire Mikhail Prokhorov is considering a deal with the New Jersey Nets to help fund the construction of their new arena.

Igor Petrov, spokesman for the tycoon's investment vehicle Onexim, told The Associated Press on Friday that "there is a possibility" that Prokhorov would participate in the construction of the new arena for the NBA team. Petrov declined further comment.

Russia's leading business daily Kommersant reported Friday that as part of a deal Prokhorov would provide a loan for the Nets and receive a large stake in the team in return.

Deadspin, Russian Billionaires Are NBA's Last Hope

All New Jersey Nets owner Bruce Ratner wants to do is get the Nets out of New Jersey and plant them in the heart of Brooklyn, but he's missing one key ingredient. What's it called? Oh right...money. He has none.

Ratner is still scrambling to build his terrible horrible no good very bad basketball arena right in the middle of the busiest intersection in Brooklyn. Nobody really wants it there and no one wants to pay for it—he had to fire architecture god Frank Gehry because his original design was too expensive—and the eminent domain-ed land owners will fight it tooth and nail. Yet Ratner persists. And with a "break ground or else" deadline looming he's turned to the only person who can help him—a disgustingly rich Russian oligarch.

Brownstoner, Russian Billionaire To Bail Out Ratner?

Posted by eric at September 18, 2009 8:54 AM