Incoming Nets owner Tsai: team "value's not going to go down," thanks to league's "socialist" economics; also, a Liberty move to Brooklyn?
In an interview recently with a US Lacrosse Magazine podcast, incoming Brooklyn Nets owner Joe Tsai, who owns 49% of the team and is slated to buy the rest--and, perhaps, the Barclays Center operating company--told Paul Carcaterra about his "serendipitous" path to buying the team.
(This was first reported by the New York Post, and then NetsDaily.)
The Taiwanese-Canadian billionaire, a co-founder of Alibaba, was a high school and college lacrosse player, so the interview mainly focused on lacrosse. In August 2017, he announced he'd establish the San Diego Seals of the National Lacrosse League. He and his family have a house in La Jolla, Ca., though his main residence is in Hong Kong.
Presumably they also have a place in New York. He went to the Lawrenceville School in New Jersey and then Yale, and lived in New York City after law school.
A "serendipitous way"
Unlike Mikhail Prokhorov, it didn't sound like Tsai had been angling for years to get into the NBA.
“I would say that came into the ownership of sports teams in a serendipitous way, about two years ago when the Brooklyn Nets were for sale," Tsai said, at about 26:58. "We were contacted by the seller’s bankers [Allen & Company]. I really didn’t treat the opportunity too seriously at the beginning. We have a team of people in our family office and I said to them, ‘Look, let’s sign the NDA, get the materials. Let’s give it a look, let's see what we have.’
Though Tsai ultimately reached a deal to pay $2.3 billion for the Nets, an astonishing sum, he portrayed it as a solid deal.
“So as we peeled through the materials, the more I kind of looked at it--this is really more specific to the NBA--the NBA is very interesting from a business standpoint," he said. "You have a very good system to share the economics between the owners and the players. And the players are very, very important. In any sport, without the talent--the players--you’re not going to have a good team and you’re not going to have fans. So they’re very, very important."
Revenue sharing
Tsai made reference to the league's "socialist" economics.
“But in the NBA, there’s a very fair share of the economics between the players and the owners. That’s one thing," he said. "The other thing is, among the owners, there’s a very good system for sharing the economics at league level. So, for example, the TV broadcast revenues nationally are shared equally among 30 teams. So, in a way, it’s kind of a socialist system.”
“I was comparing that to European soccer. If you buy a team in the English Premier League, for example, the top few teams that are always winning, they’ll just get better and better because they get more of the economics. Then they can afford to pay the players. So I thought the NBA has a better system."
NYC vs. Houston
“Also, at the same time the Nets were up for sale. I think, Houston after that. Back then, the owners of the Houston Rockets also put the team up for sale. We kind of thought about it, but we decided to put the focus on the Nets because I just couldn’t imagine myself spending too much (time) in Houston,” Tsai said. “No knock on Houston, but I love New York. And owning a team, a sports team, especially in a major league like the NBA, it’s like owning a nice apartment on Park Avenue: The value’s not going to go down."
Well, the value's not going to go down as long as there are other billionaire buyers.
The business upside
But Tsai pointed out that revenue opportunities are growing.
“So, from a business standpoint, it made a lot of sense. Then, I was looking at the upside. The NBA and basketball is a very, very big sport globally. Everywhere, people love the NBA, especially in China. I was seeing how the people loved the sport in China. Also, Southeast Asia, in the Philippines, they love basketball. Indonesia. Even Mexico; that’s going to be a big market. So there’s a lot of international expansion opportunities. So it all made sense.”
"Here's the thing. Financially, it made sense. Business-wise, it's very interesting," he said. "But at the end of the day, there’s nothing better than having the joy of going to games. I love going to basketball games. My family loves it. My kids love it. It’s just great. Right now, we're sitting here at Barclays Center, about to see a game.”
So it looks like Tsai will be watching more games than Prokhorov, who's been noted more for his absence than presence in Brooklyn. Tsai also owns the WNBA's New York Liberty; while it will play a couple of games in Brooklyn, its future long-term home is unclear.
No, Tsai can't buy the Barclays Center
That Times article, headlined Joe Tsai Is Big in Business. Now He’s Taking On Women’s Basketball., notes that the new owner of the WNBA's New York Liberty thinks that they shouldn't plan in a small, Westchester County arena.
He wouldn't commit to the Barclays Center, calling it "one of the possibilities.” It sure would be more transit-accessible than the Nassau Coliseum, the operating company of which Tsai, as incoming partner of Mikhail Prokhorov, could ultimately control.
Tsai, according to the article, seems unworried about WNBA travails:
(This was first reported by the New York Post, and then NetsDaily.)
The Taiwanese-Canadian billionaire, a co-founder of Alibaba, was a high school and college lacrosse player, so the interview mainly focused on lacrosse. In August 2017, he announced he'd establish the San Diego Seals of the National Lacrosse League. He and his family have a house in La Jolla, Ca., though his main residence is in Hong Kong.
Presumably they also have a place in New York. He went to the Lawrenceville School in New Jersey and then Yale, and lived in New York City after law school.
A "serendipitous way"
Unlike Mikhail Prokhorov, it didn't sound like Tsai had been angling for years to get into the NBA.
“I would say that came into the ownership of sports teams in a serendipitous way, about two years ago when the Brooklyn Nets were for sale," Tsai said, at about 26:58. "We were contacted by the seller’s bankers [Allen & Company]. I really didn’t treat the opportunity too seriously at the beginning. We have a team of people in our family office and I said to them, ‘Look, let’s sign the NDA, get the materials. Let’s give it a look, let's see what we have.’
Though Tsai ultimately reached a deal to pay $2.3 billion for the Nets, an astonishing sum, he portrayed it as a solid deal.
“So as we peeled through the materials, the more I kind of looked at it--this is really more specific to the NBA--the NBA is very interesting from a business standpoint," he said. "You have a very good system to share the economics between the owners and the players. And the players are very, very important. In any sport, without the talent--the players--you’re not going to have a good team and you’re not going to have fans. So they’re very, very important."
Revenue sharing
Tsai made reference to the league's "socialist" economics.
“But in the NBA, there’s a very fair share of the economics between the players and the owners. That’s one thing," he said. "The other thing is, among the owners, there’s a very good system for sharing the economics at league level. So, for example, the TV broadcast revenues nationally are shared equally among 30 teams. So, in a way, it’s kind of a socialist system.”
“I was comparing that to European soccer. If you buy a team in the English Premier League, for example, the top few teams that are always winning, they’ll just get better and better because they get more of the economics. Then they can afford to pay the players. So I thought the NBA has a better system."
NYC vs. Houston
“Also, at the same time the Nets were up for sale. I think, Houston after that. Back then, the owners of the Houston Rockets also put the team up for sale. We kind of thought about it, but we decided to put the focus on the Nets because I just couldn’t imagine myself spending too much (time) in Houston,” Tsai said. “No knock on Houston, but I love New York. And owning a team, a sports team, especially in a major league like the NBA, it’s like owning a nice apartment on Park Avenue: The value’s not going to go down."
Well, the value's not going to go down as long as there are other billionaire buyers.
The business upside
But Tsai pointed out that revenue opportunities are growing.
“So, from a business standpoint, it made a lot of sense. Then, I was looking at the upside. The NBA and basketball is a very, very big sport globally. Everywhere, people love the NBA, especially in China. I was seeing how the people loved the sport in China. Also, Southeast Asia, in the Philippines, they love basketball. Indonesia. Even Mexico; that’s going to be a big market. So there’s a lot of international expansion opportunities. So it all made sense.”
"Here's the thing. Financially, it made sense. Business-wise, it's very interesting," he said. "But at the end of the day, there’s nothing better than having the joy of going to games. I love going to basketball games. My family loves it. My kids love it. It’s just great. Right now, we're sitting here at Barclays Center, about to see a game.”
So it looks like Tsai will be watching more games than Prokhorov, who's been noted more for his absence than presence in Brooklyn. Tsai also owns the WNBA's New York Liberty; while it will play a couple of games in Brooklyn, its future long-term home is unclear.
No, Tsai can't buy the Barclays Center
But he might move the Liberty thereTsai declined "to comment on reports that he is looking to purchase the team + @BarclaysCenter sooner than 2021"— Norman Oder (@AYReport) May 19, 2019
Plz @NYTSports @kevinmdraper, NY State owns arena, Tsai can buy *operating company* from Prokhorov https://t.co/8FFkkZAoxQ @badler @CityAndStateNY https://t.co/xVVnEXKERk
That Times article, headlined Joe Tsai Is Big in Business. Now He’s Taking On Women’s Basketball., notes that the new owner of the WNBA's New York Liberty thinks that they shouldn't plan in a small, Westchester County arena.
He wouldn't commit to the Barclays Center, calling it "one of the possibilities.” It sure would be more transit-accessible than the Nassau Coliseum, the operating company of which Tsai, as incoming partner of Mikhail Prokhorov, could ultimately control.
Tsai, according to the article, seems unworried about WNBA travails:
Instead, he is focused on building the fan base for the Liberty and the W.N.B.A. as a whole. If that happens, he believes, things like television rights and sponsorships will suddenly be more valuable, and many of the league’s problems will solve themselves.And he's a fan, again likely to be far more present than the Moscow-based Prokhorov:
“I really enjoy myself because there is the joy of going to the games, just being part of all of the festivities,” he said. “Fortunately, the owner gets to sit on the floor.”
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