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May 13, 2010
Wall Street Journal on Atlantic Yards
Future Of Capitali$m
On its New York sports page, the Wall Street Journal covers a Reverse Robin-Hood: Mikhail Prokhorov, whose fortune has been estimated at $17 billion, gets to build a new basketball stadium in Brooklyn for the Nets in partnership with Bruce Ratner with $511 million in tax-free bonds. The article is headlined "Bruce Ratner Looks Back on His Ownership of the New Jersey Nets," but it might have been headlined, "American taxpayers, many of whom are struggling to raise capital to invest in their businesses without tax-exempt financing, pay to subsidize stadium for a man who could have afforded to build it with his own money."
NoLandGrab: That pretty much nails it.
Additional coverage...
Bergen Record, Nets: Ready, set, rebuild
The Nets have undergone a change in ownership and philosophy.
The sale from Bruce Ratner to Russian oligarch Mikhail Prokhorov, which was finalized Wednesday, means the Nets will make winning basketball games a priority again and not have to worry about shedding salaries and costs.
...When Ratner purchased the Nets six years ago for $300 million, he bought a team that had been to two straight NBA Finals. But Ratner wanted the Nets for real estate reasons, to move them to Brooklyn, which will be a reality because of Prokhorov.
Under Ratner and his ownership group, winning became secondary and cutting costs the norm. It led to Kenyon Martin’s trade in 2004 and Jason Kidd’s forced exit in 2007, and contributed to the Nets going from a 52-win squad during the 2001-02 season to a 12-win team this campaign.
NY Post, Nyet gain for Brooklyn
Brooklyn Daily Eagle, Done Deal: New Nets Owner Prokhorov Approved By NBA’s Board of Governors
NBC New York, Russian Basketball Comes to Brooklyn
NY Post, Nets new owner Prokhorov gets good reviews
"The happiest man in all this has to be Bruce Ratner," said one opposing executive who, like many NBA execs, coaches and assistants, yesterday saw approval of Prokhorov as a positive for the league but asked for anonymity because he didn't want to publicly address another team's dealings. "Ratner got in it for the real estate and got screwed but only after he screwed the Nets."
One coach called Prokhorov the "Russian Mark Cuban who is going to do whatever it takes to win." He was alluding to the Dallas owner's vast wealth and competitive drive to win.
The real Mark Cuban welcomed Prokhorov into the NBA's ownership ranks.
"I think it's great," Cuban said via e-mail. "His desire to win, and his personality are a huge positive for the NBA."
NLG: The value of a ringing endorsement from Cuban, however, may be somewhat negligible, like the financial health of Cuban's own team...
The New York Times, Minority Owner Sues Cuban, Calls Mavericks ‘Insolvent’
Mark Cuban’s financial management of the Dallas Mavericks was described as reckless in a lawsuit filed Monday in Texas by a minority investor in the team who accused Cuban of amassing net losses of $273 million and debt of more than $200 million.
Ross Perot Jr., who sold Cuban control of the team in 2000 but retained a small stake, said in the state court filing that the team was essentially insolvent and lacked the revenue to pay its debts.
The NBA appears to have about as much interest investigating the Mavericks' alleged insolvency as it did Prokhorov's ties to international pariah Zimbabwe:
The N.B.A. does not seem to be worried by Perot’s accusations.
Adam Silver, the deputy commissioner of the N.B.A., said the league had “absolutely no concern” about Cuban’s financial situation.
NLG: The league, however, might one day have to reckon with its being one big house of cards.
Posted by eric at May 13, 2010 11:10 AM