Skip to main content

Prokhorov on cover of Russian Forbes, spinning team purchase; in Letters page of USA Today, saluting LeBron James

The Russian billionaire Mikhail Prokhorov, principal owner of the New Jersey Nets, is on the cover of Forbes Russia’s August “Stars and Money ” issue, which contains a subtitle: “Mikhail Prokhorov and American Basketball: Who Will Be the Winner?”

Note that Prokhorov claims he bought the Nets for $200 million, which is inaccurate, as it refers only to the direct cash payment. As summarized by Sports Business Journal via NetsDaily in March:
As reported, Prokhorov's Onexim Group has agreed to put down $200 million in cash; assume about $180 million in franchise debt from Forest City Enterprises, Bruce Ratner's parent company; eat $60 million in costs--including losses--sustained while the team remains in New Jersey; and purchase up to $106 million in junk bonds needed to finance Barclays Center infrastructure, for a total of around $550 million.
In the end, Prokhorov put less money down, offering a $75.8 million loan rather than, as reported, buying $106 million in taxable bonds.

From Russian Forbes

The article, titled “I Told America I Come in Peace” contains the following highlights, translated by njnets.com:
* “I hope that this asset, which I bought for $200 million, will be worth at least $1 billion in five years. We got in at the right time.”

* “Brooklyn is a country unto itself. Even the Americans themselves say that. It’s the center of immigration. It has a unique energy to it. Tens of millions of people who now live in the US came through Brooklyn. When I’ve travelled around to different cities, people have come up to me and said, ‘We’re Brooklynites.’ Give us a great Nets team and we’ll root for them.'”

* “The structure of the deal is such that, before the move to Brooklyn, we plan to have a certain budget deficit. That’s built in. But from the time we move to Brooklyn, the team becomes profitable.”

* On what the profit will be in two years:

“Around $20 milllion. That’s a conservative estimate.”

* On Phil Jackson being interested in Nets’ coaching job:

“He said he wanted to drink vodka with me. But the problem is I don’t drink vodka! (He laughs). By the way, that’s one of the stereotypes, that, if it’s a Russian, there must be something screwy going on. We’re going to break the stereotypes.”

* On whether this project is about business or image:

“When you’re talking about the business of sports, you can’t leave out passion and love. That’s why, in this business in particular, I need to be maximally careful, so that my passion and love for basketball don’t interfere with my business reasoning. It has to do with balancing my own internal interests and here I will be very self-disciplined.”
In USA Today

Prokhorov is wobbly enough in English basketball lingo to have described draft pick Derrick Favors as a "powerful forward" (rather than "power forward"), but that hasn't stopped him--or his handlers--from working the Prokhorov message in print.

Maybe it's an effort to position the Nets to snag future free agents, or maybe it's just a way to keep his name in the paper. After all, one of the Nets' biggest selling points remains its owner.

From USA Today, Roundup: NBA team owner backs LeBron James' decision:
The players are signed, the "Decision" is made, but the passions around this year's extraordinary class of NBA free agents refuses to die down. What surprises me is the amount of negative commentary directed at the three top free agents (especially LeBron James) who decided to play on the same team and to create a great franchise together. Of course, any club owner dreams of having those players, including me, but all questions of how the announcements were made aside, I respect their choice, and no one has the right to judge them.

I want to say that I support LeBron, the best athlete in the NBA. He had a truly difficult choice to make. Any move he made was sure to be viewed as wrong, and to leave many unhappy fans. Basing his decision on achieving results on the basketball court shows that the sportsman won the day, not the showman or the businessman. What is wrong with that?

We are seeing the birth of a new, dynamic team with such star players, and all of us can await the new season with great anticipation. I wish them success and give them my moral support. I will be happy for us to beat the Miami Heat in the conference finals, maybe not this season, but in the very near future.

Mikhail Prokhorov; Moscow

The writer is the principal owner of the New Jersey Nets basketball team.

Comments

Popular posts from this blog

Forest City acknowledges unspecified delays in Pacific Park, cites $300 million "impairment" in project value; what about affordable housing pledge?

Updated Monday Nov. 7 am: Note follow-up coverage of stock price drop and investor conference call and pending questions.

Pacific Park Brooklyn is seriously delayed, Forest City Realty Trust said yesterday in a news release, which further acknowledged that the project has caused a $300 million impairment, or write-down of the asset, as the expected revenues no longer exceed the carrying cost.

The Cleveland-based developer, parent of Brooklyn-based Forest City Ratner, which is a 30% investor in Pacific Park along with 70% partner/overseer Greenland USA, blamed the "significant impairment" on an oversupply of market-rate apartments, the uncertain fate of the 421-a tax break, and a continued increase in construction costs.

While the delay essentially confirms the obvious, given that two major buildings have not launched despite plans to do so, it raises significant questions about the future of the project, including:
if market-rate construction is delayed, will the affordable h…

Revising official figures, new report reveals Nets averaged just 11,622 home fans last season, Islanders drew 11,200 (and have option to leave in 2018)

The Brooklyn Nets drew an average of only 11,622 fans per home game in their most recent (and lousy) season, more than 23% below the announced official attendance figure, and little more than 65% of the Barclays Center's capacity.

The New York Islanders also drew some 19.4% below announced attendance, or 11,200 fans per home game.

The surprising numbers were disclosed in a consultant's report attached to the Preliminary Official Statement for the refinancing of some $462 million in tax-exempt bonds for the Barclays Center (plus another $20 million in taxable bonds). The refinancing should lower costs to Mikhail Prokhorov, owner of the arena operating company, by and average of $3.4 million a year through 2044 in paying off arena construction.

According to official figures, the Brooklyn Nets attendance averaged 17,187 in the debut season, 2012-13, 17,251 in 2013-14, 17,037 in 2014-15, and 15,125 in the most recent season, 2015-16. For hoops, the arena holds 17,732.

But official…

Is Barclays Center dumping the Islanders, or are they renegotiating? Evidence varies (bond doc, cash receipts); NHL attendance biggest variable

The Internet has been abuzz since Bloomberg's Scott Soshnick reported 1/30/17, using an overly conclusory headline, that Brooklyn’s Barclays Center Is Dumping the Islanders.

That would end an unusual arrangement in which the arena agrees to pay the team a fixed sum (minus certain expenses), in exchange for keeping tickets, suite, and sponsorship revenue.

The arena would earn more without the hockey team, according to Bloomberg, which cited “a financial projection shared with potential investors showed the Islanders won’t contribute any revenue after the 2018-19 season--a clear signal that the team won’t play there, the people said."

That "signal," however, is hardly definitive, as are the media leaks about a prospective new arena in Queens, as shown in the screenshot below from Newsday. Both sides are surely pushing for advantage, if not bluffing.

Consider: the arena and the Islanders can't even formally begin their opt-out talks until after this season. The disc…

Skanska says it "expected to assemble a properly designed modular building, not engage in an iterative R&D experiment"

On 12/10/16, I noted that FastCo.Design's Prefab's Moment of Reckoning article dialed back the gush on the 461 Dean modular tower compared to the publication's previous coverage.

Still, I noted that the article relied on developer Forest City Ratner and architect SHoP to put the best possible spin on what was clearly a failure. From the article: At the project's outset, it took the factory (managed by Skanska at the time) two to three weeks to build a module. By the end, under FCRC's management, the builders cut that down to six days. "The project took a little longer than expected and cost a little bit more than expected because we started the project with the wrong contractor," [Forest City's Adam] Greene says.Skanska jabs back
Well, Forest City's estranged partner Skanska later weighed in--not sure whether they weren't asked or just missed a deadline--and their article was updated 12/13/16. Here's Skanska's statement, which shows th…

Not just logistics: bypassing Brooklyn for DNC 2016 also saved on optics (role of Russian oligarch, Shanghai government)

Surely the logistical challenges of holding a national presidential nominating convention in Brooklyn were the main (and stated) reasons for the Democratic National Committee's choice of Philadelphia.

And, as I wrote in NY Slant, the huge security cordon in Philadelphia would have been impossible in Brooklyn.

But consider also the optics. As I wrote in my 1/21/15 op-ed in the Times arguing that the choice of Brooklyn was a bad idea:
The arena also raises ethically sticky questions for the Democrats. While the Barclays Center is owned primarily by Forest City Ratner, 45 percent of it is owned by the Russian billionaire Mikhail D. Prokhorov (who also owns 80 percent of the Brooklyn Nets). Mr. Prokhorov has a necessarily cordial relationship with Russia’s president, Vladimir V. Putin — though he has been critical of Mr. Putin in the past, last year, at the Russian president’s request, he tried to transfer ownership of the Nets to one of his Moscow-based companies. An oligarch-owned a…

Former ESDC CEO Lago returns to NYC to head City Planning Commission

Carl Weisbrod, Mayor Bill de Blasio's City Planning Commission Chairman and Director of the Department of City Planning, is resigning,

And he's being replaced by Marisa Lago, currently a federal official, but who Atlantic Yards-ologists remember as the short-term Empire State Development Corporation CEO who, in an impolitic but candid 2009 statement, acknowledged that the project would take "decades."

Still, Lago not long after that played the good soldier at a May 2009 Senate oversight hearing, justifying changes in the project but claiming the public benefits remained the same.

By returning to City Planning, Lago will join former ESDC General Counsel Anita Laremont, who after retiring from the state (and taking a pension) got the job with the city.

Back at planning

Lago, a lawyer, in 1983 began work as an aide to City Planning Chairman Herb Sturz, and later served as the General Counsel to the president of the NYC Economic Development Corporation, Weisbrod himself.