Friday, July 24, 2009

It's all about cash flow: Ratner, according to report, pushing harder to sell part of Nets

On Wednesday night, at the informational meeting on Atlantic Yards sponsored by three community boards, Forest City Ratner's MaryAnne Gilmartin was asked about reports that principal owner Bruce Ratner was selling the Nets to minority owner (and Brooklynite) Vinny Viola.

"That's not true," Gilmartin said.

Maybe so, but it was a narrow answer to a narrow question.

Nets for sale

As to whether Ratner may be selling the Nets to someone else, the headline on an article by Dave D'Alessandro of the Star-Ledger is New Jersey Nets owner Bruce Ratner on verge of enlisting investors willing to move team to Brooklyn.

D'Alessandro reports:
But according to numerous officials throughout the organization, Ratner may soon find someone to help alleviate the team's crushing debt load and facilitate the construction of the Atlantic Yards project, and the candidates range from the former CEO of Yahoo to a billionaire industrialist from Russia -- each of whom would still move the team from New Jersey.

"I would be surprised if it doesn't happen fairly soon," said a high-ranking Nets official, who requested anonymity so as not to jeopardize Ratner's plans. "Bruce has looked into several options. He's had offers, he's made counteroffers, and at some point in time -- probably by the time the season gets under way -- something will transpire."

To what degree Ratner needs help is uncertain, even to some of the team's own investors. One who is admittedly skittish over the team's annual losses and the dubious plans for Brooklyn said earlier this week that Ratner needs "significant" financial assistance to keep the team afloat.


The plans for Brooklyn may be in question, but they are certainly part of the deal. Ratner wants only investors who'll support the Brooklyn move, which does have significant potential upside, given a new building in a major media market. But as the market for luxury boxes slows, and the Nets alienate fans with cost-cutting and weak teams, the upside faces some constraints.

Oh, and D'Alessandro reports that Viola remains a candidate to buy the team, though the most viable one is former Yahoo CEO Terry Semel.

Yormark's spin

D'Alessandro gets some happy talk from Nets CEO Brett Yormark and contrasts it with what's he's heard from others associated with the team:
Ratner's highest officials, for their part, haven't denied that he's shopping for help. As recently as last week, Nets CEO Brett Yormark issued this statement after an interview request.

"As we have said before, we have received interest from potential investors in the team," Yormark said through a publicist. "That interest is growing, as it is clear that we are moving to Brooklyn. Our ownership group is as committed as ever to the success of the Nets and to the Barclays Center."

But employees and investors alike are getting wary over Ratner's stewardship, and there has been a significant drop in morale within the basketball and business sides of the operation.

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