Thursday, July 29, 2010

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.

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