Mikhail Prokhorov Is Going To Make A Killing On The Brooklyn Nets Sale
Bruce Bennett/Getty Images Deron Williams. Mikhail Prokhorov is selling the Brooklyn Nets, according to Scott Soshnick of Bloomberg.
Estimates for what the team will sell for vary. Peter Schwartz, an expert in valuations, told Bloomberg that the team is worth $1.3 billion.
Forbes ranks the Nets as the fifth-most-valuable team in the NBA, at $780 million. But Forbes valuations have been really low in recent years. The Milwaukee Bucks sold for $550 million when Forbes had them at $405 million. Forbes valued the Los Angeles Clippers at $575 million before they sold to Steve Ballmer for $2 billion.
The Clippers sale, combined with the league's unexpectedly lucrative new TV deal, suggest that the Nets sale is going to be a monster.
The Clippers sold for 3.48 times their Forbes valuation. When you use that multiplier on the Nets, the team would be worth $2.7 billion. Prokhorov bought the team for $200 million in 2010.
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The Clippers are a far better basketball team than the Nets, but other than that there are some similarities between the two franchises.
Both play in cities with huge media markets. Both have neighboring teams with larger fan bases. Both play in new arenas (or newish, in the Staples Center's case).
It's also important to note that Ballmer bought the Clippers before the league signed a new TV deal with ESPN and Turner.
The deal will pay the league an average of $2.66 billion per season for nine years — a significant increase from the $930 million per year the league made under its previous deal. Most expected the new deal to total $2 billion per year.
About half of that new revenue will go to the players, but the rest of it goes to the owners. All 30 teams in the NBA stand to make an extra $25 million per year from the TV deal alone.
Prokhorov lost $144 million on the team during the 2013-14 season because he spent an unprecedented amount of money in luxury-tax payments for going over the salary cap. But with the skyrocketing values of NBA franchises, it's safe to assume his investment is going to pay off whenever he pulls the trigger on a sale.
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