Mikhail Prokhorov sold the perennially underachieving Brooklyn Nets to Alibaba co-founder Joseph Tsai for a record $2.3 billion dollars, sort of. Tsai will pay approximately $1.1 billion for 49% of the team now, and the deal includes an option for Tsai to buy out the rest of Prokhorov’s stake in four years, which would essentially make him the franchise owner.
Joseph Tsai, the co-founder of Chinese internet giant Alibaba, reportedly agreed to purchase a 49% stake in the Nets https://t.co/oglYEV39cu
— Sports Illustrated (@SInow) October 27, 2017
The $2.3 billion valuation of the Nets that the deal is predicated on eclipses the $2.2 billion that restaurant tycoon Tilman Fertitta paid for the Houston Rockets earlier this year and is another big win for Prokhorov, whose good fortune is legendary. Prokhorov bought an 80% controlling stake in the Nets for $233 million in 2010 — in cash.
He then proceeded to execute arguably the worst trade in NBA history, sending three first-round draft picks to the Boston Celtics for Kevin Garnett, Paul Pierce, and Jason Terry, who were not only old, but cost the Nets a fortune — fortune being a relative term here — in luxury taxes because of their high salaries. All part of the long con, of course. Prokhorov, despite being a 6’8 self-described basketball lover, doesn’t concern himself with wins and losses; only zeros in his bank account.
Prokhorov paid $233m in cash, assumed $160m in debt and paid $60m in operational costs in 2009 for 80% of Nets, 45% of arena. 1000+% return!
— NetsDaily.com (@NetsDaily) October 27, 2017
Full disclosure: that accounting is a little wonky, but Prokhorov is making a TON of money on this deal. For most, this would be the coup of a lifetime, but it doesn’t even make the top three on the list of Prokhorov’s all-time coups.
Coup #1: The Bank
His mob homie Vladmir (Potanin, not Putin) got the green light to open up two private banks right after the Soviet Union collapsed and asked Prokhorov to run them as his partner. It was an extremely lucrative, albeit dangerous, endeavor.
“It was Wild West. It was a territory with no sheriff. No rules, you need to survive.”
Coup #2: Nickleback
The Russian government sold the world’s largest nickel producer, state-owned Norilsk Nickel, to one of Potanin and Prokhorov’s banks for pennies on the dollar, which Prokohorv transformed into one of the world’s most profitable mining operations before taking the company public.
Coup #3: Hookertown
In January 2007, Prokhorov had a mix-up with the French government when he flew some of his buddies and a gaggle of Russian models into a ski resort on his private jet. They accused him of bringing prostitutes into the country until he explained to them he was just extremely rich and that’s how he rolls.
The media had a field day with the story, and when he got back to Russia, Prokhorov’s old buddy Vladmir told him now would be a good time to sell his interests in the company. He cashed out $10 billion two months before the Russian stock market crashed.
Those three events made him, for a time, the richest man in Russia, which is why he was able to pay cash for the Nets in 2010. Now, seven years later, Prokhorov is doing what he always does: cashing out. He still owns the Barclay’s Center, though.