Russia's Economic Crisis Is Affecting The Future Of The New Jersey Nets
For months there have been rumors that the owner of the Brooklyn Nets Mikhail Prokhorov is thinking about selling the team and on Tuesday, Bloomberg's Scott Shoshnick reported that the team is for sale.
The Bleacher Reports' Howard Beck confirmed the report, and then added "Russian economy a driving factor" in a tweet:
So what's the ruble crisis have to do with a New York basketball team? Well, selling a sports franchise is one the quickest ways to make cash quickly.
It's no secret that the Nets have been hemorrhaging money (the team reportedly lost $144 million in the 2013-2014) but that's just pocket change compared to how much Prokhorov lost in Russia over the past year.
Bloomberg Billionaires/TwitterAccording to the Bloomberg billionaires index, Prokhorov lost $411.1 million in just 48 hours after Russia's central bank hiked rates up to 17% on December 16, 2014. (That's three times as much as the Nets lost in the entire 2013-2014 season.)
And over the year leading up to that date, Prokhorov lost a whopping $2.5 billion as the ruble plunged over 40% against the dollar. His current net worth is estimated to be around $10.8 billion.
Since the Nets are reportedly worth somewhere between $780 million and $1.3 billion, Prokhorov could offset some of his losses by selling the team.
A team owner with the need for liquidity could sell a team with "somewhere between 90 to 180 days," Charles Baker, a sports and media partner at DLA Piper and the head of the firm's sports M&A practice told IB Times.
"If you look at the Donald Sterling situation," he continued, "once the NBA took unilateral action, the team was sold basically in the course of a week. If somebody comes to the table and has the cash, the only obstacle would be league approval. When a league wants to move quickly, they're able to move quickly." Interestingly, immediately after the first western sanctions were announced, Prokhorov said that he wanted to move the company that runs the Nets to Russia. At the time, the NBA stated that they had not been notified of these changes. So far, Prokhorov's spokesperson maintains that there is "nothing imminent in terms of a sale of any stake in the team," and in an official statement, the Nets said that "ownership is always open to listening to offers - that's just good business."