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As expected, Prokhorov buying Ratner's stake in Barclays Center (operating company), Brooklyn Nets; no terms disclosed

There's been only one anonymously sourced report, Prokhorov Said to Agree on Terms to Purchase 100% of Nets, Barclays Center, from Bloomberg News, with no terms disclosed, but many news outlets have picked it up:
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.
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.
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.

That Rube Goldberg arrangement saves arena operators likely more than $150 million over the life of the bonds, according to the Independent Budget Office, because investors accept a lower interest rate if the bonds are tax exempt.

And that raises the question: would New York State and New York City have been so eager to give direct subsidies, tax breaks, low-cost land, and other benefits to the arena developer and team owner if it had been a Russian oligarch billionaire? 

Note that Prokhorov, once he gets control of the team/arena, is likely to sell part or all of both. Forest City Enterprises, parent of Bruce Ratner's Forest City Ratner, needs to sell assets outside of real estate by the end of the year to further its conversion from a C Corporation to an REIT, or Real Estate Investment Trust.

Prokhorov to sell?

NetsDaily added:
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."


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