Russian Billionaire Moves a Step Closer to Buying the Nets
The Russian billionaire Mikhail D. Prokhorov moved closer to taking control of the Nets on Tuesday night when he signed formal contracts to buy a controlling stake in the team and to invest in its new home, a billion-dollar arena planned as part of a development in Brooklyn.
The deal with the current owner, the developer Bruce C. Ratner, is subject to approval by the N.B.A. Board of Governors. An N.B.A. spokesman, Michael Bass, said, “We expect that the Board of Governors will vote on the application early in 2010.”
Ratner must also gain possession of the land for the arena, at the intersection of Flatbush and Atlantic Avenues, which is expected to happen in March.
“I am looking forward to working with Bruce and his team to bring a world-class entertainment and sports center to the heart of New York City,” Prokhorov said in a statement released Wednesday. “Brooklyn is an exceptionally attractive market for a new arena and the Barclays Center will provide a fantastic home for the Nets.”
Prokhorov, who met with the N.B.A.’s finance committee in October, has boasted that he will be “the only N.B.A. owner who can dunk.”
Prokhorov’s company, Onexim Sports and Entertainment Holdings, is paying $200 million for an 80 percent stake in the Nets and a 45 percent interest in the arena. He has also agreed to cover the team’s losses, up to $60 million, until the Nets move to the new arena, presumably by June 2012. The Nets currently play in East Rutherford, N.J.
Prokhorov also has an option to acquire up to 20 percent of the Atlantic Yards development, which will eventually include more than 6,000 apartments.
Ratner bought the Nets for $300 million in 2004 as part of a plan to move the team to Brooklyn for a major real estate development. Although he gained public approval in 2006, he encountered fierce opposition from some community groups who contend that the $4.9 billion project is too big for the neighborhood. They also objected to the state’s taking private property for the project on behalf of a private developer.
Opponents filed lawsuit after lawsuit challenging Atlantic Yards and delaying construction, as the Nets sustained over $380 million in pre-tax losses over the past five years.
But in recent months, Atlantic Yards has won a string of court victories, including one Wednesday when the State Supreme Court dismissed a suit brought by Develop Don’t Destroy Brooklyn, the Straphanger’s Campaign, State Senator Velmanette Montgomery and several other elected officials.
Ratner got a much needed financial boost in September when he signed a tentative agreement with Prokhorov. On Tuesday, Ratner and a local development corporation sold $511 million in tax-exempt bonds for the planned arena.