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August 10, 2011
Prokhorov's Profitable Future
NetsDaily
Pseudonymous NetsDaily blogger — and Mihail Prokhorov-worshipper — Net Income doesn't foresee any economic downturn for the Russian oligarch.
"We have a team, we're building the arena, we've hired professional management, we have the option to buy in to another large project, the building of an office center. For me, this is a project with explosive profit potential," [Prokhorov] told Vedomosti, as translated by his Moscow staff. "The capitalization of the team will be $700 million after we move to Brooklyn. It will earn approximately 30 [million]. And the arena will be worth around $1 billion. We are planning to become NBA champions within five years."
Assuming he continues to own 80% of the team and gets 80% of the arena, that would mean his interest in the team would be worth $560 million and the arena $800 million. That's a grand total of $1.36 billion...on an investment of around $400 million.
And what of the "option to buy in to another large project, the building of an office center", which we have to assume is his option to buy up to 20% of Atlantic Yards. The price of that option has never been revealed and it is believed to be in negotiations now. Another story in Vedmosti suggested a price that seems impossibly low: $120 million for one fifth of a $4 billion project. According to Vedomosti, "a source close to one of the parties to the transaction" said Prokhorov is prepared to invest $120 million for a 20% stake in Atlantic Yards. The report added that Prokhorov plans to "participate in the development."
Posted by eric at August 10, 2011 10:53 AM