Sunday, March 28, 2010

In "The Russian Is Coming," 60 Minutes' Kroft pitches softball questions to insouciant billionaire Mikhail Prokhorov

The CBS newsmagazine show 60 Minutes is surely capable of tough investigation; in 2003, it ran a tough piece on eminent domain abuse around the country, even mentioning an episode in which the New York Times "teamed up with a major real estate developer" to get New York State to use eminent domain for a new Times headquarters.

That very same "major real estate developer," Forest City Ratner, has achieved similar success in getting the state to declare the Atlantic Yards site blighted, but that's not the story 60 Minutes wanted this time.

It sought a "get"--an exclusive interview with expected Nets owner Mikhail Prokhorov and, in the segment broadcast tonight, The Russian Is Coming, correspondent Steve Kroft lobbed softball questions at the billionaire, partied with him (as in screenshot at right), and generally couldn't suppress a grin from his face.

Prokhorov maintained his own lighthearted mien, playfully parrying questions, and even claiming that spending time in detention in France was "fun for me." However, as Dave D'Alessandro of the Star-Ledger noted, "there was very little substance about where he came from."



Nothing about Atlantic Yards controversy

Though Kroft obligatorily reported on the questionable--but, domestically, legal--source of Prokhorov's wealth, not a word was mentioned of any controversy involving Atlantic Yards, much less the questionable use of significant subsidies, tax breaks, and the extraordinary power of eminent domain to benefit Russia's richest man.

And CBS came up with this insightful description:
If everything goes according to plan, two years from now he plans to move the Nets to a brand-new arena in Brooklyn, home to the largest Russian-American community in the United States.
The screen flashed from a rendering of the (unnamed) Barclays Center to a street scene in Brighton Beach, some eight miles away, as if there's any connection. And, of course, Prokhorov wouldn't be moving the Nets on his own; there's a tremendous amount of government help.

A gift to Ratner

As Eric McClure of NoLandGrab commented:
Glasses of Chateau Lafite '95 drunk by Steve Kroft at Mikhail Prokhorov's dinner table?

Several.

Sexy Russian models partied with by Steve Kroft in Mikhail Prokhorov's favorite night club?

Twenty.

Tough questions asked by Steve Kroft of Mikhail Prokhorov during their 60 Minutes inteview?

Zero.

Value to Bruce Ratner of the absence of any questions about Atlantic Yards?

Priceless.
In Nets' Likely Owner Faces a Nation, New York Times sports business reporter Richard Sandomir took note of the interview and an article in Bloomberg Markets magazine, which goes into far more depth regarding Prokhorov.

Does the Times article explain why Prokhorov wasn't at the Barclays Center groundbreaking or disclose the newspaper's business relationship with Forest City Ratner? Nah.

Prokhorov tells the Times:
“I view this investment as a business opportunity. I expect this asset to be worth around a billion dollars after the new arena is built and the team gets to the top of the N.B.A.”
Then why did the state give away arena naming rights and not try to keep any piece of the upside?

NBA Commissioner Stern ducks a tough question

Sandomir continues:
Adam Silver, the N.B.A.’s deputy commissioner, said in an e-mail message on Sunday that “I can say that he was forthcoming about his early days as an entrepreneur in Russia.”

In December, David Stern, the N.B.A. commissioner, said, “There were multiple investigations of him by interested parties, and there was nothing that was disclosed that would cause us not to move forward with his application.”
But Sandomir missed one moment of tension in the 60 Minutes piece.

"Do you think he's a man of character?" Kroft asks Stern.

"I think he's a man who's passed a very tight security check," Stern replies deliberately, "and nobody has come up with any reason why he shouldn't be an NBA owner."

That's not exactly a ringing endorsement, but it is an acknowledgment that Prokhorov has the cash the league desperately needs--and why the Nets, as in screenshot at left, are enthusiastically promoting the interview.

Or, as D'Alessandro put it:
So when it comes to NBA ownership, it’s all about stacks of money – and a willingness to flaunt them – so that is what the CBS program made the emphasis of its 14-minute segment.
Starting off

The piece begins with Kroft referring to a sports team as "the ultimate vanity investment... now, the most exclusive club in America is about to get a Russian."

But the only reason it's an exclusive club is the cartel system that limits the number of major league sports teams and leads cities and states to try to poach such teams.

"It's not that often you get to sit down and talk to a rich Russian, and we couldn't pass up the opportunity," Kroft declares, setting a low bar.

"For me, life, and business in particular, is a big game," says Prokhorov in his Russian-accented English. We see him with his JetSki and kickboxing with the coach of the Russian national team.

"Do you like danger?" Kroft asks.

"I like to control risk," Prokhorov responds.

"I am addicted to sport," Prokhorov adds. "Without sport I feel bad."

"How much time do you spend working out every day?" Kroft probes.

"Two hours."

"For someone who likes sports, stress, and challenges, there is probably no better buy than the New Jersey Nets," says Kroft in his narration. "For a few hundred million dollars, Prokhorov is just a few formalities away from acquiring 80 percent of the worst team in the National Basketball Association."

Stern enters to say it's a sign of the sport's globalization. Kroft notes that it also has something to do with the recession

Around Russia

"He flew us to Siberia to check out Russia's richest gold mining company," Kroft says. (I'm assuming that 60 Minutes didn't take a freebie.)

We learn of Prokhorov's business empire, including aluminum company, a media company, banks, an insurance company, and real estate. His house has a built-in swimming pool and, of course, a fitness center. He's got a model of his 200-foot yacht."

Kroft drinks wine with Prokhorov, who confides, ""Frankly speaking, I like women. In my heart, I am still teenager."

Kroft joins Prohorov at Moscow's exclusive SoHo club, surrounded by 20 beautiful women.

The business background

"I am lucky to have enough money to be really independent, but it doesn't drive me just to count money," Prokhorov declares. "It's only a side effect of what I am doing in business."

"Like most Russian billionaires," Kroft says in his narration, "Prokhorov's fortune was melded from the ashes of the former Soviet Union, with a little bit of luck and the help of a powerful political connection."

That connection was named Vladimir Potanin, who brought the market-educated Prokhorov into a banking partnership, making him a multimillionaire.

Then, as Kroft says in his narration, "In 1995, Kremlin leaders gave them what amounted to an insider's opportunity to buy one of the state's most valuable assets, the huge mining and metals operation called Norilsk Nickel, which is among the world's largest producers of nickel, copper, and platinum. They acquired it from the Kremlin in a so-called auction for the measly sum of a few hundred million dollars, in a process that even Prokhorov's business partner admitted wasn't perfect, and probably not even legal under Western standards. But it was legal in Russia."

For context, Yulia Latynina, one of Russia's top business journalists, tells 60 Minutes "it was rigged. But it cannot be explained in normal economic terms."

"This is just the way things work," says Kroft.

"You had robber barons. We had oligarchs," responds Latynina.

And Prokhorov transformed the company, taking it public and selling it at the perfect time, just before the market crashed, thanks to the "Courchevel incident" involving some young women imported by Prokhorov who French officials thought might be prostitutes.

"It's a part of any business to be lucky," Prokhorov says.

"And you sold at just the right time," Kroft says.

"Miracle happens," responds Prokhorov.

To the NBA

"It's safe to say there aren't any NBA owners with stories like that one," Kroft says in his narration. "Prokhorov's life, and the opaque nature of Russian business, presented a unique challenge for the National Basketball Association, which is charged with investigating the personal and business background of prospective NBA owners. But Commissioner David Stern says Prokhorov passed all the tests."

That leads to the exchange over "a man of character" and Kroft's finding of Prokhorov to "be a bit unorthodox" as a businessman: he doesn't use a computer.

"We have too much information," Prokhorov responds, "and it's really impossible to filter it."

Kroft then turns into an HR counselor, noting that Prokhorov believes his biggest strengths are organization and leadng people. "Any abilities you wish you had that you don't have?" Kroft asks.

Prokhorov pauses. "Sometimes, maybe, to be less tall."

They both share a chuckle.

Kroft notes that "you're about to enter a world of very tall people, with the NBA."

"Compared with the common people I am tall enough, trust me," Prokhorov responds.

"The deal to buy the Nets is expected to be concluded in the next few months," narrates Kroft, as an image of the Barclays Center, with questionable rooftop advertising fills the screen.

"In the meantime, Prokhorov has been brushing up on his English and his jump shot." Kroft continues. "If everything goes according to plan, two years from now he will move the Nets to a brand-new arena in Brooklyn, home to the largest Russian-American community in the United States. Who knows, he may even find that perfect woman he's been looking for."

"I am real excited, to take the worst team of the league and to turn it to be the best," says Prokhorov, as 60 Minutes makes no effort to explain why the current owners, in an effort to save money and position the Nets for a move, might have run the team into the ground.

"You think you can do that?" Kroft asks.

"I am confident," responds Prokhorov. "Do you remember Frank Sinatra song, 'New York, New York'? If I can make it there, I can make it anywhere."

Prokhorov grins. The trademark 60 Minutes clock ticks in closing.

Prokhorov's wealth

This hard-hitting web extra is titled Extra: Is He Worth 17 Billion Dollars?

Here's the description, complete with exclamation point:
Russian billionaire Mikhail Prokhorov claims he doesn't know how much money he has!


Prokhorov talks about his height

This hard-hitting web extra, complete with exclamation point, is headlined Extra: His Childhood Nickname Was Giraffe!



Prokhorov at home

This hard-hitting web extra is titled Extra: Inside a Billionaire's Home. Watch Kroft handle Prokhorov's special Kalashnikov! Watch Prokhorov work out! Watch Kroft ask Prokhorov about his best Jet Ski trick!

1 comment:

  1. Thanks, Norman. You watch this stuff so I don't have to!

    ReplyDelete