Sports News

Russian tycoon bids for U.S. Nets basketball team

MOSCOW (Reuters) - Russia’s richest man, Mikhail Prokhorov, has made a takeover bid for major U.S. basketball team the New Jersey Nets, the tycoon confirmed on his blog on Tuesday.

Russian billionaire Mikhail Prokhorov listens to a question during a news conference in Moscow, May 31, 2007. REUTERS/Sergei Karpukhin

Former nickel baron Prokhorov boasts that if his move is successful, it would be the first time a National Basketball Association (NBA) club comes under foreign control.

Prokhorov’s proposals, sent to existing Nets shareholders at the weekend, would see his Onexim group provide a loan to build a substantial part of a new arena, according to a post on his website,

Onexim would also receive a controlling stake of the NBA team for a “symbolic” price, the post said. Sources close to the billionaire have previously estimated the overall value of any deal at $700 million.

“For our Onexim group the realization of this very lucrative business project, whose participation was made possible by the world crisis (never in history have foreigners owned an NBA club), is another interesting sports development,” Prokhorov wrote.

Nets and NBA officials declined to comment, but the team said last week that they have received interest from potential investors in the team.

NBA rules do not bar overseas ownership, and transfer of ownership requires background checks on a new owner as well as approval by 75 percent of the league’s 30 owners.

Russian oligarchs splashed out 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, the 44-year-old Prokhorov, a former banker and mining executive, is flush with money after cashing out of assets in 2008 before the global crisis caused commodity prices to crash.

A former chief executive of the world’s largest nickel firm Norilsk Nickel, Prokhorov has an estimated fortune of $9.5 billion, according to the latest Russian edition of Forbes magazine.

Developer Bruce Ratner owns the Nets, which Forbes magazine in December ranked as the 26th most valuable of the 30 NBA teams, with an estimated value of $295 million.

The club plans to move from New Jersey to a new arena in Brooklyn, in the neighboring state of New York.

In addition, Ratner’s company, Forest City Ratner, proposes constructing 16 office and apartment buildings, as well as upgrading subway, utility and other infrastructures as part of a larger project.

Legal disputes, financing problems and challenges from local community groups have dogged the project for years. 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.

Reporting by Conor Sweeney in Moscow, additional reporting by Ben Klayman in Chicago; editing by Robin Pomeroy and Justin Palmer