Russian billionaire Mikhail Prokhorov purchased the New Jersey Nets in 2010, expecting to win an NBA championship by 2014. Nearly five years and no rings later, the owner of the now-Brooklyn Nets is reportedly considering selling the franchise.
According to ESPN, Prokhorov has had discussions about potentially relinquishing his controlling stake in the team. Prokhorov has reportedly met with Guggenheim executive Todd Boehly, who is a minority owner of the Los Angeles Dodgers.
If Prokhorov does sell the franchise, it would be a quick turnaround for a man who had jumped into the NBA with such fervor. However, it’s that passion for the Nets that could ultimately force him to step away from the team.
In his short stint as owner, Prokhorov has tried to win at any cost. Last season, Brooklyn’s payroll of over $102 million was by far the highest in the league, as no team had a payroll that even reached $90 million.
Between what Brooklyn spent on players’ salaries and the $90 million it was forced to pay in luxury tax, the Nets are projected to have lost $144 million in the 2013-2014 season, according to Grantland’s Zach Lowe. No NBA team lost more than $13 million during that time.
Prokhorov, who is reportedly worth roughly $11 billion, might find his investment to be worth it if the team were performing better on the court. After five years of no titles, though, a championship run doesn’t appear to be on the horizon. The Nets lost in the second round of last year’s playoffs, marking their best finish under Prokhorov, and they aren’t expected to be a top title contender in 2015.
Prokhorov hasn’t led the Nets to an NBA Finals like he had hoped, but he has seen the team’s worth improve considerably. In 2010, he bought the organization for $200 million, gaining 80 percent ownership of the team and 45 percent of the Barclays Center. There’s no doubt the team would go for much more money now, and high-level NBA executives tell Yahoo! sports‘ Adrian Wojnarowski that they expect Prokhorov to cash out.
ESPN reports that the Nets asking price values the team at $1.2 billion and Barclays Center, which opened in 2012, at $1.1 billion. Forbes valued the Nets this year at $780 million, but transactions for NBA teams would likely have Prokhorov looking for 10 figures.
“The recent sale of the Clippers for over $2 billion changes the perceived market price for the ownership of a professional sports team in the NBA,” Marc Edelman, a sports law professor at the Zicklin School of business at Baruch College in New York, told International Business Times. “Until that point, no team had sold for even close to $1 billion, and thus an asking price of $2 billion would have seemed preposterous. However, today all that has changed.”
In April, the Milwaukee Bucks were sold for $550 million after Forbes valued the team to be worth $405 million. In 2013, the Sacramento Kings were bought for a then-record $534 million.
A potential sale of the Nets might not be imminent, and the ESPN report claims that the club will have trouble finding a buyer at its current asking price. However, another report suggests that one ownership group might be willing to match the Nets’ asking price.
In 2012, Guggenheim Baseball Management bought the Los Angeles Dodgers for $2.15 billion. While the Dodgers’ estimated value did not equal what they were sold for, Forbes valued the team to be worth $2 billion just two years later.
According to Nets Daily, the two sides could be looking at what is being called a “combination of assets.” A deal could reportedly be reached in which Prokhorov is still the controlling owner, though his stake in the team would be reduced.
Dodgers controlling owner Mark Walter has refuted the report, telling ESPN that he has no intention of selling the team or moving them into a new ownership group.
“As for the Nets, I have not seen their numbers,” Walter added. “They are a terrific franchise. I would be happy to look at their information and any proposal anyone wanted to make to me – as I would with any proposal.”
Reports of Prokhorov listening to offers first surfaced in June.