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September 7, 2009
Soon You're Talking Real Money...
Gumby Fresh
The pseudonymous bond-market insider Gari N. Corp parses last week's Nets Daily analysis of Bruce Ranter's precarious financial situation.
I finally got round to picking through this extremely interesting, timely, lucid, and well-reported Q&A at Nets Daily post about a potential sale of the New Jersey Nets basketball team. It's awesome. Go read it. Go read it again. Go pick through it yourself like an episode of The Wire. There at the bottom is a comment from me. I'm going to elucidate here on what I wrote there.
The blog's pseudonymous author has worked out that there are a lot of rather angry investors in the Nets ready to vent at the nearest knowledgeable Nets fan, and the author has done a very good job of tracking them down. They also have appeared to have gleaned a pretty convincing idea of the Nets team finances.
But buried down in the information is something pretty momentous - Ratner needs to scare up another $200 million from somewhere to finish his new stadium in Brooklyn.
...Now go back to the Nets Daily article and take a gander at the logistics of this. Ratner wants to sell the team, and use the proceeds to fund the stadium. But buyers - with the NBA's support, apparently - do not want to be locked into an above-market lease for a Brooklyn arena. They want to own the arena, but probably don't have the resources to convince the agencies to follow through.
The Nets losses then, are only part of the reason Ratner needs to sell. But Ratner might not be able to sell the team until the financing is in place, but needs to sell the team to conclude the financing. Can he bundle both into a single instantaneous transaction? Watch this space.
NoLandGrab: As usual, Mr. Corp (whose unstated motto would appear to be "quality, not quantity" of blog posts) has penned a piece well worth clicking thru to.
Posted by eric at September 7, 2009 10:39 AM