Nets Owner Sells 49% of Franchise at $2.3 Billion Valuation
Brooklyn Nets owner Mikhail Prokhorov has agreed to sell 49% of the NBA franchise to Alibaba (BABA) co-founder, Joseph Tsai; with Tsai receiving the option to purchase controlling interest in the franchise in 2021. Prokhorov will remain the operating owner for the next 4 years, while Tsai will not maintain any role on the business or basketball side of the franchise during that time. The deal does not include the Barclays Center, which has an estimated value of $1 billion.
Howie Long-Short: Tsai acquired the Nets at a $2.3 billion valuation, eclipsing the NBA record $2.2 billion that Tilman Fertitta paid for the Houston Rockets. The Nets lost $23.5 million last season (2nd most in NBA, beyond only Detroit), while generating a league lows from its local TV contact. There is simply no way the Nets are worth $2.3 billion. The last NFL team sold was Buffalo, for $1.4 billion in 2014. The NFL generated around $11 billion in revenue during the 2014 season. The NBA generated roughly $8 billion last year. How could NBA teams be worth over a billion dollars more, when the league generates less revenue and pays out a higher percentage to their players?
Fan Marino: Sports fans want 3 things from the owner of their favorite team; a passion to win, a willingness to spend and to stay out of player personnel decisions. Based on that criteria, Prokhorov has been a tremendous owner for the Nets. As a Nets fan though, I’ll never forgive him for hiring Billy King, signing off on one of the worst deals in professional sports history and moving the franchise from New Jersey.
Editor Note: The summary for this story was written by our friends at The Water Coolest. Check out TheWaterCoolest.com for the latest market news and professional advice.
For the balance of today’s newsletter, sign-up here!