Russian and Nets Head to Brooklyn

21 09 2009
New Jersey Nets

New Jersey Nets (http://tinyurl.com/lzxcft)

As the New Jersey Nets head to Brooklyn, a new majority shareholder could be calling the shots – Russian billionaire Mikhail Prokhorov. 

The fate of the Nets has recently been under considerable speculation as the economy continues to decline.  The team is presently ranked the fourth least valuable of the 30 NBA teams by Forbes Magazine. New Jersey Nets: Forbes Money Profile

Developer Bruce C. Ratner, the current owner of the Nets, recently received state approval to build a new arena for the NBA team in Brooklyn – an expected $8 million cost.   Ratner “now faces a crucial December deadline for his plan to build an arena in Brooklyn, NY, and move his team there in 2011,” according to ESPN.com (http://tinyurl.com/nxcuxe).  “The construction needs to break ground by then or lose access to the tax-free bonds financing much of the project.”

Ratner is currently attempting to sell over $500 million in tax exempt bonds to raise funds for the arena and is also searching for potential investors, said Charles V. Bagli in The New York Times.

According to Bagli, the Nets owner has been eager to bring in “new blood” to the franchise.  “His company, Forest City Enterprises, owns 23 percent of the team, which has endured about $380 million in pretax net losses over the past five years.” (http://tinyurl.com/mlgd34)

Mikhail Prokhorov (http://tinyurl.com/na3fmm)

One possible source of this “new blood” is billionaire Mikhail Prokhorov, who was recently ranked by Forbes as the richest man in Russia and the 40th wealthiest man in the world.  His current estimated worth is $9.5 billion. Mikhail Prokhorov: Forbes World’s Billionaire Profile 

Prokhorov was forced to resign from his company Norisk Nickel in in 2007 after allegations surfaced that he was tied to a prostitution ring.  He was never convicted, said Forbes.

Prokhorov is expected to loan the team the money needed to build the new stadium in return for a majority share in the Nets franchise, said unidentified sources to Russia’s leading business daily, Kommersant, per the NYT link above.

Igor Petrov, spokesman for Prokhorov’s investment business Onexim, told the Associated Press that “there is a possibility” that he would provide the capital for the team’s new arena, but he declined to comment further.

As professional sports teams continue to struggle with issues such as declining ticket sales and rising stadium costs, foreign investors such as Prokhorov may become a way of the future.

For the New Jersey Nets, they may be the only hope.

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