Russian Tycoon's Bid For NBA's Nets Examined
ROBERT SIEGEL, host:
The National Basketball Association, like other American sports leagues, has been trying to expand its international appeal. And that effort may soon move beyond the nationality of players and viewers, to owners. We learned this week that a Russian billionaire has agreed to acquire a controlling interest in the New Jersey Nets franchise. He also hopes to rescue a plan to move the team to a new arena in downtown Brooklyn. Well, joining us now as he does most Fridays is Sportswriter Stefan Fatsis. And Stefan, first tell us about the potential buyer Mikhail Prokhorov. He would become, I gather, the first foreigner to own the majority of an NBA team.
STEFAN FATSIS: Yeah. He's 44 years old, reports place his net worth of between $9.5 billion and $15 billion. He made his money in the post-Soviet privatization of national industries. He acquired the world's largest producer of nickel and palladium in 1995 and then sold a big chunk of it last year before the global financial collapse. The New Yorker's Keith Gessen writes that Prokhorov is well known in Russia as, quote, "the last of the freewheeling yacht-riding, model-escorting oligarchs."
SIEGEL: And does he know anything about basketball?
FATSIS: He does. He bought the old Soviet Army basketball team, CSKA Moscow, in 1997 and he basically saved it. He spent tens of millions of dollars on American and European players. He won two European club championships in 2006 and 2008. He attended games, but he's not considered an intrusive owner. He let the basketball people run the basketball business. Now, Prokhorov lost control of the team when he sold the stake in the nickel company. Buying the Nets would be a very splashy way to get back into basketball.
SIEGEL: Well, obviously there's no problem with his being able to finance the purchase. Are there any other hurdles to his becoming an NBA owner?
FATSIS: Yeah. Well, the NBA has to vet his business and personal background and the main red flag is going to be his 2007 arrest at a French ski resort on charges of ferrying in prostitutes for the winter holidays. He was held for four days, never charged and the episode was highly embarrassing in Russia and may have led the Kremlin to force him out of that nickel company. For the NBA, the intensity of the vetting, I think, will probably depend on how much the league wants to encourage its foreign ambitions and whether it sees Prokhorov's investment as a way to save the Nets planned move to Brooklyn.
SIEGEL: Yeah, the move to Brooklyn seems to be a big issue here. The Nets' current owner is real estate executive Bruce Ratner who's been trying to break grounds on a development in downtown Brooklyn that's centered on an arena for the Nets.
FATSIS: Yeah. And it's engendered a tone of anger, litigation over the size, scope, cost and design of the project. Now, Prokhorov has said to have agreed to pay $200 million and take on some of the Nets' substantial debt and make other financial commitments in exchange for 80 percent of the team and 45 percent of the arena. It's hard to know right now what the total investment actually is and what revenue Prokhorov would get. And it's reportedly conditional on Bruce Ratner getting financing for the project by the end of the year. So, right now, it's hard to know, whether we'll ever see this guy in the NBA. If we don't, he'd presumably be in play for other NBA teams and a few are believed to be available should the economy rebound.
SIEGEL: And that commitment for $200 million and assuming the Nets' debts, we think Prokhorov has seen the Nets play basketball?
(Soundbite of laughter)
FATSIS: Well, I think what Nets' fans and Nets' owners might be banking on is, in 2010, there is a certain free agent by the name of LeBron James…
FATSIS: …who will be on the market and if you have this man's millions, maybe that's an added incentive to get James to come to a new team in Brooklyn starting in 2011.
SIEGEL: Well, thank you, Stefan.
FATSIS: Thanks, Robert.
SIEGEL: Sportswriter Stefan Fatsis who talks with us on Fridays about sports and about the business of sports.
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