Wednesday, September 23, 2009

Could 80% of the Nets be sold for $200 million? Either Ratner's a sucker or (more likely) much of the deal is obscured

I'm reading the news coverage of the deal announced today, and pretty much everyone is taking it at face value that Russian billionaire Mikhail Prokhorov can invest $200 million and gain an 80% share of the Nets and 45% of the Atlantic Yards arena.

Ratner and his ownership group bought the Nets for $300 million in 2004, as I noted earlier today. If 80% of the team goes for $200 million, that's a $40 million loss.

Ratner would look like even more of a sucker if Prokhorov could simply sweep up nearly half of the arena with that investment.

But Ratner's no dummy. The "certain contingent funding commitments" mentioned in the press release surely hold the key to the deal.

2 comments:

  1. i have to agree. i can't imagine that ratner would/could get suckered by someone who clearly knows less about the situation here in brooklyn, its local government, politics and finances. Prokhorov must also understand that he's playing an away game. there must be much more to this.

    however this particular deal may go down, and ay in general, i'm betting that we'll be the one's left holding the bag. there's a reason they're billionaires and we're not.

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  2. Ratner may not be a dummy, but it's clear from the terms of this deal that Ratner couldn't possibly have gone forward without this deal -- and he still may fail.

    And keep in mind that there's only one billionaire involved in this transaction. It's a safe bet that much of Ratner's wealth was tied up in FCE stock -- and check what the price was when he sold control of FCR to FCE. His desperation makes it clear that he did not have the means to get any deal done without a major infusion of rubles.

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