Alibaba Executive Chairman Joe Tsai is reportedly planning to pay $3.5 billion to buy out Mikhail Prokhorov’s stake in the Brooklyn Nets and the Barclays Center, swapping ownership of the NYC franchise just after it acquired two superstar players who have greatly improved the team’s prospects for the upcoming season.
According to Bloomberg, the deal to buy the sports franchise could be announced as soon as Friday. Taiwan-born Tsai is a Yale Law Graduate, and was corporate tax lawyer at venerated white-shoe firm Sullivan & Cromwell when Jack Ma persuaded Tsai to leave and become one of the 8 founding members of Alibaba. He’s know worth some $10 billion.
Joe Tsai
Tsai bought a 49% stake in the team at a $2.3 billion valuation a few years ago – a record for a US pro sports franchise – and he had until 2021 to exercise the option to take control of the club. And after the events of this off-season (acquiring Kyrie Irving and Kevin Durant), which have left the club in a much better position to make the playoffs or possibly become a championship contender, the timing for buying out the team was just right.
That isn’t to say Prokhorov is getting shorted – quite the opposite.
Prokhorov’s Onexim Sports & Entertainment paid $223 million in 2010 for an 80% stake in the team and a 45% stake in the arena. In 2015, Prokhorov bought out the team and the arena (the league prefers it when one owner controls both) in a deal valuing the assets at a combined $1.7 billion.
The oligarch made his money in minerals, but bought the team in 2009 after losing favor with Putin. At the time, he paid less than $400 million for the struggling New Jersey Nets and a piece of the stadium.
He then proceeded to be a terrible NBA owner in every way except the one that counts: making a massive profit when you sell the team. The sale qualifies as the richest in NBC history, according to SB Nation.
Asians have been buying up professional sports teams in Europe and around the world, but buying an NBA team is rare.
Indonesian Erick Thohir, chairman of the Mahaka Group, once owned a stake in the Philadelphia 76’ers, but he has since sold it.
Chinese investors typically prefer European soccer teams, including Aston Villa, West Bromwich Albion, Wolverhampton Wanderers and Southampton in England, Italy’s A.C. Milan and Inter Milan, Spain’s Atletico Madrid, and Slavia Prague in the Czech Republic, according to Bloomberg.
But if the Nets have a breakout season, outshine the Knicks and maybe even make it deep in the playoffs, Tsai’s reign would be off to a great start.
via ZeroHedge News https://ift.tt/2TBLO1A Tyler Durden