Meet Mikhail Prokhorov
Keith Gessen. The New Yorker. Being a Russian oligarch these days isn’t easy. The best and brightest of them are in exile or in jail; others, after feasting on leverage during the commodities boom, now have tummies full of debt. Of those still in the game, Mikhail Prokhorov is the richest, with an estimated net worth, according to Forbes, of $9.5 billion. At six-foot-seven, he is also the tallest, though this alone cannot explain the complicated process whereby he appears ready to buy the New Jersey Nets and build a stadium for them in Brooklyn.
Prokhorov is a new name to SportsCenter viewers, but in Russia he is well known as the last of the freewheeling, yacht-riding, model-escorting oligarchs. (Prokhorov is single.) He made his fortune when he and a partner, Vladimir Potanin, won control of Norilsk Nickel, the world’s largest producer of nickel and palladium, in one of the infamous “loans-for-shares” auctions of 1995. (They were infamous because they were rigged.) Prokhorov, however, managed to keep himself out of the news until early 2007, when local authorities arrested him at his favorite French ski resort on charges of procurement of prostitutes. He spent four days in jail before being released without charge, but the repercussions in Russia were serious. Potanin apparently used the opportunity to try to push Prokhorov out of Norilsk Nickel. After a year of increasingly hostile negotiations, Prokhorov sold his share in Norilsk to a third oligarch for a stake in an aluminum giant and about $7 billion in cash. This buyout seemed like the end of Prokhorov’s days as a serious player, until world equity and commodity prices crashed a few months later and he woke up as the richest man in Russia.
But what to do with $9.5 billion? He would be wise to spend it all inside Russia; other oligarchs who have not invested in the motherland have incurred the wrath of the Kremlin. So Prokhorov has funded two expensively produced magazines (one of them is edited by my sister, Masha Gessen); has continued to support the Mikhail Prokhorov Fund, perhaps Russia’s most innovative cultural foundation (run by his sister, Irina); and has thrown a party in St. Petersburg, aboard the old battleship Aurora, at which, as the English-language edition of Pravda put it, “strong beverages made the guests lose control over themselves. Some of them decided to jump overboard to swim in the Neva River.” Moscow has a popular coffee chain that serves a ten-dollar cappuccino—but even a big man like Prokhorov cannot drink nine hundred and fifty million cappuccinos. So he has begun to look abroad.
This week’s news about Prokhorov and the Nets began circulating as a rumor in Russia in July. How he managed to clear the proposed deal with Putin is unknown. The Moscow-based business journalist John Helmer has somewhat ingeniously speculated that an earlier rumor from the summer, about Prokhorov buying the Italian soccer team Roma, is connected to this: that Silvio Berlusconi asked his friend Putin to find someone to bail out Roma, and that Prokhorov is in fact buying Roma as a condition for being allowed to buy the Nets. Helmer counts up the damage:
$330 million in cash down and pledged money—more than twice what a reasonable man would pay for a football club in a faraway place—in exchange for a permit to spend $700 million on a loss-making basketball team in another faraway place.
Well, perhaps. The ordinarily hyper-sarcastic Russian press, for its part, has been unnervingly straitlaced about the news.
As for Prohkorov, he recently took to his blog to explain the situation to his online fans (and perhaps to some, in higher places, who are not his fans). Earlier this month, the embattled oligarch Oleg Deripaska (who bought Prokhorov out of Norilsk Nickel, and used to be Russia’s richest man), was asked to explain why, as the owner of a failing Russian automaker (GAZ), he was buying a failing German automaker (Opel) from a failing American automaker (G.M.). He suggested in his own defense that GAZ would be able to learn Opel’s engineering secrets. Similarly, Prokhorov argued that, by taking over an N.B.A. franchise, he would be able to help Russian coaches and players study the N.B.A. and bring their knowledge back home, and rejuvenate Russian basketball! Pay no attention, Prokhorov concluded, to the carping of the “pseudo-patriots.”
Prokhorov’s ordinarily docile commenters (“Great post, Mikhail Dmitrovich! Incidentally, I have a business plan I’d like to run by you…”) weren’t buying it.
Why what do you mean, Mikhail, what pseudo-patriots, why pay attention to the opinion of your fellow citizens, who cares, just keep going. You’re a strong, smart person, later on you’ll be able to tell your children or your foreign friends that there was once a country, it was called Russia.
We’ll see. In Norilsk—a city constructed by labor camp prisoners and now so polluted that no vegetation grows within twenty miles of the city center—Prokhorov and his partner had first to remove a stubborn sitting factory director, Anatoly Filatov, before taking over the plant. This took a long time. In the downtown Brooklyn area known as Atlantic Yards, a neighborhood almost equally devoid of vegetation due to the “development projects” of current Nets owner Bruce Ratner, Prokhorov will have to get past the no less stubborn Daniel Goldstein, the man who almost single-handedly has been holding up the construction of the stadium for the past five years. The obvious joke here would be that Prokhorov will make Goldstein an offer he can’t refuse, but, in fact, according to one government official I spoke to recently, back in the mid-nineteen-nineties Prokhorov and his partner couldn’t figure out how to remove Filatov and had to appeal to the government for help. This is unlikely to impress Goldstein. On the other hand, a gift to Brooklyn of the world’s largest trampoline, plus Malevich’s “Black Square,” would go a long way.
Update: According to ESPN, it’s a deal.