« Brooklyn Paper Editor Kuntzman: "Once [arena is] built, you kind of have to focus on the positives" | Main | Price drops at On Prospect Park provide another reason to doubt KPMG report on housing market »

May 31, 2010

Klub Prokhorov

The billionaire Nets owner and the creation (his creation, actually) of a new kind of New York Russian.

New York Magazine
by Michael Idov

When Mikhail Prokhorov—gangly, boyish, 45, and a billionaire seventeen times over—announced his purchase of the New Jersey Nets and a majority stake of their yet-unbuilt arena at the Atlantic Yards, he leaped into the city’s collective consciousness with a speed unusual for any foreigner, let alone a Russian. The Nets are not a trophy skyscraper, whose ownership ultimately matters only to the kind of people who keep track of trophy skyscrapers. They are a ticket to instant popular-culture importance. By becoming the first foreign owner of an NBA team, Prokhorov simultaneously established himself as a major figure in one of the world’s most glamorous businesses (in the world capital of the sport, no less) and a central player in New York’s biggest real-estate drama after ground zero. The scale of his trick didn’t really hit home until a May 19 breakfast photo op with Mayor Michael Bloomberg and Jay-Z: a perfectly orchestrated tableau of New York relevance.

Prokhorov’s interest in the Nets appears sincere enough. His father was a Soviet sports official, and Prokhorov is the head of the Russian Biathlon Union (he attended the Vancouver Olympics in that capacity). He played basketball himself in high school—because he was six-eight, it was practically an imperative—and invested in Moscow’s CSKA professional team before turning his attention westward. Prokhorov has already floated a $12 million to $15 million offer to Duke coach Mike Krzyzewski, openly plans to court LeBron James and other top free agents, and during his recent visit to the city promised to bring the team a “championship in five years.” He also hopes to raise the sport’s profile back in Russia and perhaps groom future stars there.

And yet buying the Nets and their arena was clearly a real-estate play as well. Prokhorov had already established himself as a major figure in the New York property market before the Atlantic Yards deal. In 2008, after developer Harry Macklowe defaulted on a $513 million loan from Deutsche Bank AG, the super-liquid Prokhorov swooped in and offered to buy the Park Avenue site in question for $250 million. “Guys like Prokhorov,” says a source who’s seen the bid, “are always looking to get in at opportunistic prices. They make extremely low offers that also happen to be all cash, which locals don’t do.” By the time Prokhorov turned his attention to Bruce Ratner’s Atlantic Yards, the project was in almost as much trouble as Macklowe’s. Only the infusion of Russian cash raised it from a coma.


Related coverage...

Atlantic Yards Report, New York Magazine suggests that, as notable new New York Russian, Prokhorov (Nets, Snob, etc.) is latter-day Baryshnikov

Idov's closing paragraph:

Have I sold out to Prokhorov? Sure I have. And not just by joining his club or working for his magazine. Simply by writing these lines, I’m helping him accomplish his trick by promoting the group he’s so bent on creating. But then I think of that picture of Prokhorov with Mayor Bloomberg and Jay-Z, and it brings to mind a similar photo, one that I apparently committed to memory. It’s a seventies shot of Baryshnikov lolling on a Studio 54 couch, sandwiched between Steve Rubell and Mick Jagger. In most respects, Prokhorov and Baryshnikov couldn’t be more different. But seeing the two Russians flanked by such iconic New York figures had the same effect on me. It’s a bit embarrassing to admit—maybe even a little snobby. But both pictures helped make me feel like I belong in New York, like my life, and those of my countrymen, is bigger somehow than it was back home. Isn’t that why we all seem to end up here?

Well, Idov and his Russian-American peers may feel the connection, but others may feel a tad bit of dissonance. Baryshnikov rose through stupendous talent and drive.

Prokhorov as New Yorker

Prokhorov has brains, talent and (clearly) drive, but his vast wealth tracks back significantly to his insider's deal to buy Norilsk Nickel, a process a prominent Russian journalist described to 60 Minutes as "rigged." (Without that deal, he wouldn't have been in a position to make a killing when he sold his shares.)

In buying into the Atlantic Yards project--80% of the Nets and 45% of the arena operating company--Prokhorov also gains from an insider's real estate deal.

Maybe that makes him a certain kind of New Yorker, as well.

Posted by eric at May 31, 2010 9:06 AM