The Russians are coming! The Russians are coming!
A billionaire Russian playboy is buying the Nets in a buzzer-beating deal that all but ensures the team moves to Brooklyn by the 2011-12 season.
Mikhail Prokhorov — a 6-foot-7 basketball nut, former amateur player and current richest man in Russia — has agreed to shell out hundreds of millions of dollars to buy the majority stake in the New Jersey NBA team, build an arena for them in Brooklyn and push forward on current owner Bruce Ratner’s long-stalled $4.9 billion Atlantic Yards development project.
“I have a long-standing passion for basketball and pursuing interests that forward the development of the sport in Russia. I look forward to becoming a member of the NBA and working with Bruce and his talented team to bring the Nets to Brooklyn,” said Prokhorov, 43.
The timing is key for Ratner, who has to break ground on the proposed new Nets’ arena before the end of December or risk losing out on $700 million in tax-free financing for the plan.
Under the terms of the deal, Prokhorov’s Onexim Group will pay $200 million up front and an unspecified amount of future funding to acquire an 80 percent stake in the Nets and a 45 percent share of the $800 million Barclays Center arena project.
He would also have the right to purchase up to 20 percent of the non-arena part of the 22-acre Atlantic Yards project – which includes plans for a residential and office tower complex.
“Mikhail and Onexim will be great partners for this project,” Ratner said in a statement.
“I am thrilled that smart global investors appreciate the exciting economic potential of Brooklyn. We are one step closer to achieving our goals of creating much-needed jobs and economic development for Brooklyn and the city.”
As majority owner of the team, Prokhorov would also be responsible for its debts, which are believed to be substantial.
The deal does have an out clause for Prokhorov — it’s contingent on Ratner acquiring the land needed for the arena through eminent domain. The state’s seizure of the land has been hit with numerous legal challenges, and the case will be argued before New York’s highest court, the Court of Appeals, next month.
The deal — which would make Prokhorov the first non-North American to be a majority owner of an NBA team — also has to be approved by the NBA’s league of governors.
An NBA official said the league will perform an extensive background check on the billionaire, who’s renowned for his lavish lifestyle and was enmeshed — but not charged — in a prostitution investigation in France in 2007.
“We look at everything,” the official said.
NBA Commissioner David Stern, however, made the deal sound like a slam dunk.
“Interest in basketball and the NBA is growing rapidly on a global basis and we are especially encouraged by Mr. Prokhorov’s commitment to the Nets and the opportunity it presents to continue the growth of basketball in Russia,” Stern said.
If the sale goes through, Prokhorov would take control of the team after the groundbreaking on the arena, and under the terms of the agreement, would have to keep the team in Brooklyn — known for its large Russian émigré population — for at least the 30-year length of the bonds to be floated to finance the arena, an official said.
Prokhorov’s ascension could also result in Nets’ coach Lawrence Frank and his staff being exiled to Siberia — Prokhorov’s already made noise about bringing Russian coaches to the United States.
He wrote on his blog Tuesday that his desire to own the team is also motivated by getting access to NBA training methods and technology to boost Russian basketball.
Prokhorov, who currently owns a share in the Russian basketball team CSKA, was recently ranked as the country’s richest man in the Russian edition of Forbes, with an estimated fortune of $9.5 billion. He has weathered the global economic crisis better than many of his wealthy compatriots by cashing out of some lucrative assets before the downturn battered commodity markets last year.
In 1993, the Onexim bank that he headed acquired Norilsk Nickel, one of the country’s largest industrial conglomerates.
Brooklynites near the project footprint in Prospect Heights had mixed emotions –some were happy the team was coming, but most were concerned about potential traffic and parking problems.
“The traffic will be bad and the quality of life will go down,” said Timothy Schanen, 40. He was also concerned for the team, adding “Russians are known for a lot of different things, but coaching basketball isn’t one of them.”
Mayor Bloomberg, however, said “the investment shows how much confidence there is in the future of New York City, and in how well-prepared the city is to rebound from the national recession. There was a time when Brooklyn garnering this kind of international investment would have been hard to imagine.”
Additional reporting by Amber Sutherland