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September 26, 2009
U.S. finally embraces foreign sports owners
National Post
By Jeffrey Goldfarb
This article sees the sale of the Nets to oligarch Mikhail Prokhorov as a herald of more foreign ownership of U.S. sports franchises.
Russian billionaire Mikhail Prokhorov agreed to invest US$200-million in return for a 80% stake in the New Jersey Nets basketball team, 45% of the Barclays Center development project and an option for as much as 20% of Atlantic Yards Development Co.
The U.S. sports establishment finally seems to have embraced all the global economy has to offer. The country's professional teams have happily imported players and exported game broadcasts and merchandise to great monetary gain. But with few exceptions, they have remained averse to foreign owners. The financial crisis seems to have brought this protectionist streak to an end.
New York property developer Bruce Ratner is selling 80% of the National Basketball Association's New Jersey Nets and a 45% stake in the team's new arena to Russia's richest man, Mikhail Prokhorov. The 6-foot-7 playboy could be the first non-North American to control a major U.S. sports franchise without any strings attached.
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Ratner is just another overextended millionaire under financial pressure, while Prokhorov was a rare shrewd oligarch, converting much of his holdings to cash right before the world went to pieces. The deal is still no slam dunk even if the towering Prokhorov might become the only NBA owner able to attempt to match his players on the court.
Three-quarters of the league's owners must sign off on the transaction. Ratner also needs to secure additional financing to break ground in December on the ambitious US$4.9-billion Brooklyn development where he plans to relocate the team, or risk losing tax-free government bonds that have been pledged and a lucrative sponsorship deal from Barclays.
If those hurdles can be cleared, it could prove a major victory for U.S. sports. The Nets deal may ultimately hinge on a real-estate investment, but Prokhorov could bring advanced Russian training habits to the team and build its brand in new parts of the world.
Posted by steve at September 26, 2009 8:57 AM