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The Times updates its math: add $60 million in losses and $160 million+ in debt for Prokhorov, but the arena still looks like a deal

The New York Times has updated its article suggesting that Mikhail Prokhorov got his Nets and Atlantic Yards investment at a two-thirds discount, now calling the investment a "safety net" for Bruce Ratner.

I and others had pointed out that financing for losses and debt would have to be factored in.

The Times reports:
Although Prokhorov’s cash investment was announced at $200 million, he will also finance future Nets losses, up to $60 million, that are expected to accumulate before the move to Brooklyn, according to an executive involved in the transaction. The team has reported nearly $400 million in pretax net losses for its dozens of investors, including $129 million by Forest City Enterprises, Ratner’s Cleveland-based parent company.

Prokhorov will also be responsible for 80 percent of the $207 million in debt the team holds if the sale goes forward. The transaction requires the approval of 23 of the 30 National Basketball Association owners, and is contingent on Ratner’s obtaining financing for the arena and control of all the land required for it by Dec. 31.

...He appears to be getting a good deal. Ratner and his investors paid $300 million for the team in 2004 and assumed salary obligations of another $60 million. Prokhorov’s purchase of an 80 percent stake in the team values its equity at about $150 million; add the $207 million in debt, and the franchise’s value has barely budged.

Arena questions

Prokhorov will be responsible for paying off 45% of the arena, which in total might be worth $800 million.

Does that mean he gets the package at two-thirds off? The Times is no longer quoting Forbes editor Michael Ozanian to that effect.

Rather, the Times quotes a consultant:
“The Russian is taking on a lot more risk for the potential of greater reward,” said Marc Ganis, president of Sportscorp, a Chicago-based sports consultant. “He’s getting a good deal on the team, but he’s taking on a great deal of risk with the arena and with debt.”

Well, so is Ratner. In fact, Ratner is putting equity into the arena, about $200 million, and will have a 55% stake. Prokhorov is not putting equity into the arena, and will have a 45% stake. So that looks like a significant bargain for him.