* Would make Prokhorov first NBA owner outside N. America
* Onexim will invest $200 mln as part of deal
* If approved, Onexim will own 80 pct of team
(Adds comments by Prokhorov and NBA commissioner, other
details and background, byline)
By Ben Klayman
CHICAGO, Sept 23 (Reuters) - Russia's richest man, Mikhail
Prokhorov, reached a deal to buy control of the New Jersey Nets
basketball team, as well as fund the development of a real
estate project in Brooklyn, New York.
A letter of intent was signed to create a partnership for
the development of Atlantic Yards, a 22-acre residential and
commercial real estate project in Brooklyn and Barclays Center,
the Nets' future home, the parties said on Wednesday.
Forest City Ratner (FCEa.N), the Nets, which developer
Bruce Ratner owns, and Prokhorov's Onexim Group said in a
statement that the deal will ensure the team moves to Brooklyn
as planned.
Under the agreement, Onexim, an investment group, will
invest $200 million and make certain contingent funding
commitments to buy 45 percent of the arena project and 80
percent of the National Basketball Association team, the
parties said. It also gives Onexim the right to purchase up to
20 percent of the Atlantic Yards Development Co, which will
develop the non-arena real estate.
"I have a long-standing passion for basketball and pursuing
interests that forward the development of the sport in Russia,"
Prokhorov said in the statement. "I look forward to becoming a
member of the NBA."
The deal is expected to close by the first quarter of next
year and would make Prokhorov the league's first owner outside
North America. NBA rules require background checks on a new
owner as well as approval by 75 percent of the 30 owners.
"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," NBA
Commissioner David Stern said.
The 44-year-old Prokhorov is worth $9.5 billion, down from
$22.6 billion in 2008, according to the May Russian edition of
Forbes.
Towering over colleagues at 6 feet, 9 inches tall (2.06
metres), the former chief of the world's largest nickel firm,
Norilsk Nickel, used to play basketball when he was younger.
Russian oligarchs spent heavily on yachts, mansions and
sports clubs as their investments rose with soaring commodity
prices in recent years. In the highest-profile deal, Roman
Abramovich bought London soccer club Chelsea in 2003.
While many of his Russian peers sought state bailouts,
Prokhorov, also a former banker, is flush with money after
cashing out of assets in 2008 before the global crisis caused
commodity prices to crash.
Forbes in December ranked the Nets as the 26th most
valuable NBA team with an estimated value of $295 million.
In addition to the arena, Forest City Ratner proposes
constructing 16 office and apartment buildings, as well as
upgrading subway, utility and other infrastructures.
Legal disputes, financing problems and challenges from
local community groups have dogged the project for years.
Opponents of the project vowed on Wednesday to keep fighting
the development plan despite the deal with Onexim.
In June, Ratner dropped architect Frank Gehry to cut costs,
further irking critics as Gehry's design was a key factor in
winning public support for the project in the first place.
Ratner has a year-end deadline to start building the arena
or lose $700 million of tax-free financing that a state agency
has said it plans to issue in the fourth quarter.
The Raine Group and Goldman Sachs (GS.N) advised Ratner and
the team, while Hogan & Hartson advised Onexim.
(Reporting by Ben Klayman, editing by Matthew Lewis)
