Prokhorov’s $200 Million Purchase of Nets Gets NBA Approval
Prokhorov’s first official act as the Nets’ majority owner will likely come May 18, when the NBA holds its annual draft lottery, giving the team that threatened the league record for fewest wins a chance to restock with a top college player such as guard John Wall of the University of Kentucky.
Prokhorov also has pledged to be active in the free-agent market, where All-Stars LeBron James, Dwyane Wade, Chris Bosh and Amare Stoudemire will be available starting in July. New Jersey is about $26 million below the league’s projected $56.1 million salary cap next season.
“There is only one way to go: up,” Prokhorov told Bloomberg Markets magazine in its May issue. “I like to find cheap assets with problems. It gives me power.”
The 45-year-old Prokhorov, the second-richest person in Russia with a fortune estimated by Finans magazine at $17.8 billion, made his money in gold and metals. Now he is investing in debt restructuring and hybrid cars.
He will own 80 percent of the Nets (12-70) and 45 percent of the Barclays Center in Brooklyn, New York, where the team plans to relocate for the 2012 season. The transactions regarding the team and Barclays Center are expected to be completed today.
“We anticipate that his passion for the game and business acumen will be of considerable value not only to the Nets franchise but to the entire NBA,” league Commissioner David Stern said in an e-mailed statement yesterday.
Prokhorov is looking for other investment opportunities in the U.S. and owning a professional basketball team gives him immediate name recognition, he said.
“If I want to do something else, people won’t say, ‘Who’s that?’” Prokhorov said. “They’ll say, ‘That’s the owner of the Nets.’”
Prokhorov will be the first owner of an NBA team from outside North America and the second foreign owner of a U.S. franchise. Nintendo of America Inc. is the majority owner of Major League Baseball’s Seattle Mariners.
The approval “will give the NBA a greater global reach and bring a multitude of new fans to the game of basketball,” Prokhorov said yesterday in an e-mailed statement. “For those who are already fans of the Nets and the NBA, I intend to give you plenty to cheer about.”
The 6-foot-7 Prokhorov sold his 25 percent stake in Russia’s biggest mining company, Moscow-based OAO GMK Norilsk Nickel, in April 2008 for a promised $7 billion in cash and a 14 percent stake in United Co. Rusal, the world’s largest aluminum producer.
In 2008 and 2009, he used his holding company, Onexim Group, to buy distressed assets. He purchased half of Renaissance Capital, one of Russia’s largest investment banks, in September 2008 for $500 million. He increased his stake in OAO Polyus Gold, Russia’s largest gold producer, and now owns about 40 percent of the company with other investors, a stake valued at about $3.7 billion in March.
In Russia, his wealth ranks second after steel magnate Vladimir Lisin, who’s worth was estimated by Finans magazine at $18.8 billion.
Prokhorov purchased the Nets from developer Bruce Ratner, who will make the new arena the centerpiece of a $4.9 billion, 22 acre (9-hectare) office and apartment complex in Brooklyn, which is home to about 330,000 immigrants from the former Soviet Union. Ratner purchased the Nets in 2004 for $300 million from YankeeNets LLC.
The project and move has been held up for six years over legal battles with local residents opposed to the development.