NEW YORK (AP) -- Brooklyn Nets owner Mikhail Prokhorov has completed the sale of a 49 percent interest in the team to Joe Tsai, who could become the controlling owner in three years.Actually, Prokhorov owns the Barclays Center operating company; the arena is owned, nominally, by New York State, to enable tax exemptions and tax-free bonding.
The NBA's Board of Governors unanimously approved the sale Thursday to Tsai, the co-founder of China-based global internet company Alibaba Group Holding Ltd.
Prokhorov will remain the controlling owner for now through Onexim Sports and Entertainment Holding USA Inc. However, the deal allows Tsai to acquire further shares in 2021. If exercised, he would become the controlling owner.
Prokhorov bought the Nets in 2010 and the Russian oversaw the Nets' move from New Jersey to Brooklyn. The sale does not include Barclays Center, which his company will continue to own.
Five months after the deal was agreed in principle, the NBA approved the sale of 49 percent of the Brooklyn Nets —but not Barclays Center— on Thursday to Tsai, based on a reported valuation of $2.35 billion, the highest ever, topping the $2.2 billion sale of the Houston Rockets last year. That sale also included the Rockets lease on Toyota Center.In a letter to season-ticket holders, according to NetsDaily, Prokhorov wrote:
With a $2.35 billion valuation, 49 percent would mean a price tag of $1.15 billion.
Today we announced the sale of a 49% stake in the Brooklyn Nets to Joe Tsai, executive vice chairman and co-founder of Alibaba Group. We are excited to have Joe as a partner. He brings tremendous global experience, a passion for basketball, and shares our vision for the development of the Nets. Joe feels personally connected to the area given that he attended high school in New Jersey and lived in New York City for many yearsThe press release
Here's the official 4/12/18 press release, from the Nets:
MIKHAIL PROKHOROV COMPLETES SALE OF MINORITY STAKE IN BROOKLYN NETS TO JOE TSAI
Transaction unanimously approved by NBA Board of Governors
BROOKLYN – April 12, 2018 – Brooklyn Nets owner Mikhail Prokhorov has completed the sale of a 49% interest in the Brooklyn Nets to Joe Tsai. Mr. Tsai is executive vice chairman and co-founder of Alibaba Group, a global internet company with businesses in e-commerce, cloud computing and digital entertainment.
Mr. Prokhorov, through Onexim Sports and Entertainment Holding USA, Inc., will continue to be the controlling owner and the NBA Governor of the team. There will be no changes in the day-to-day management of the team’s business or basketball operations.
Mr. Prokhorov commented, “As we looked for a partner for the team, the number one priority was to find someone who shares our global vision and passion for the future development of the Brooklyn Nets. Those who have followed our story know that, having learned some hard lessons, we are focused on building our culture, and this must be reflected in all that we do – in our players, our staff and our front office. It was important to us that we choose a partner who shares our commitment to the highest standards as we create a truly wonderful NBA franchise. I welcome Joe to the organization and I am looking forward to working with him for years to come.”
“As a lifelong sports fan, I am very proud to join the Nets ownership and the NBA family,” said Mr. Tsai. “I lived in New York in the early days of my career and the City holds a special place in my heart. I share the vision and culture that Mikhail Prokhorov, CEO Brett Yormark, General Manager Sean Marks and Head Coach Kenny Atkinson have put in place, and I look forward to being part of this great franchise.”
“Basketball is a global sport and the NBA is one of the most recognized brands in the world. I am excited about the NBA’s international growth prospects, and hope to play a part in bringing the NBA and the special character of the Brooklyn Nets to fans around the world,” Tsai continued.
A Canadian citizen, Mr. Tsai attended the Lawrenceville School in New Jersey where he played lacrosse and football. He also played lacrosse at the Division I level as an undergraduate at Yale College. After earning his juris doctor degree from Yale Law School, Mr. Tsai worked in New York for many years, and met his wife, Clara, while living there. Mr. Tsai co-founded China-based Alibaba Group in 1999, and currently oversees the company’s strategic acquisitions and investments as executive vice chairman. He is a member of the company’s board of directors and sits on the partnership committee of the Alibaba Partnership, which is comprised of a group of senior executives responsible for the day-to-day management of Alibaba Group. Alibaba Group is not party to the transaction.
The transaction provides Mr. Tsai an option to acquire further shares in 2021 and, if exercised, become the controlling owner of the team. The announced share sale does not include Barclays Center, which will continue to be wholly owned by Onexim Sports and Entertainment. The NBA Board of Governors unanimously approved the transaction.
Since moving to Brooklyn in 2012, the Nets have achieved success and growth both on and off the court. The team reached the NBA Playoffs for three consecutive years in 2013, 2014, and 2015. In 2016, the franchise launched a G League team, the Long Island Nets, to support the development of young talent, and that same year, opened HSS Training Center, the team’s state-of-the-art practice site. The Nets brand has mirrored this growth by transforming from a traditional sports team to a popular lifestyle brand, revolutionizing its public appeal.