Mikhail Prokhorov and real estate developer Bruce Ratner’s Forest City Enterprises Inc. have reached an agreement that will give the Russian billionaire sole ownership of the Brooklyn Nets and Barclays Center, according to two people with direct knowledge of the talks.Note that Ratner doesn't actually own the Barclays Center, but rather the operating company. The arena is nominally state-owned to enable the issuance of tax-exempt bonds, which are paid off via PILOTs, or payments in lieu of taxes.
The National Basketball Association is reviewing the deal, the terms of which weren’t disclosed. Earlier this year, valuations expert Peter Schwartz said the Nets and Barclays Center are worth about $2 billion. Since then, Atlanta’s NBA franchise, the Hawks, was sold for $730 million.
Prokhorov, through his Onexim Sports & Entertainment, currently owns 80 percent of the NBA team and 45 percent of the Brooklyn arena, which opened in 2012 and is also home to hockey’s New York Islanders. Forest City owns the remaining stakes.
Prokhorov to sell?
The transaction, expected to involve the exchange of hundreds of millions of dollars, would expedite Prokhorov's plan to sell a minority stake in the team, perhaps as much as 49 percent. Sources say Prokhorov has not been marketing that stake. A league source told NetsDaily that based on the transaction, the team's valuation will be second only to the Clippers, who were sold last year to Steve Ballmer for $2 billion.That's amazing, because the Nets have been losing money. Going forward, as they shed expensive contracts and a new TV deal kicks in, their profit potential increases.
Arena a jewel?
Brownstoner called the arena a "jewel."