Mikhail Prokhorov is selling high. Seven years after buying a controlling interest in the Brooklyn Nets for $200 million, the Russian billionaire has agreed to sell a 49 percent stake in the franchise to Joseph Tsai, the cofounder and executive vice chairman of Chinese e-commerce company Alibaba, ESPN reported Friday.
The Nets are being valued at a total of $2.3 billion, according to ESPN, which is more than Tilman Fertitta reportedly paid for the Houston Rockets in September ($2.2 billion), or what Steve Ballmer paid for the Los Angeles Clippers in 2014 ($2 billion). A 49 percent stake would thus cost Tsai around $1.13 billion.
Tsai will not oversee any decision-making as a minority stakeholder, according to ESPN, but that is expected to change. In four years, Tsai will have the option to buy the rest of the franchise from Prokhorov, per the report.
Who is Joseph Tsai? Aside from cofounding and owning the second-largest share of Alibaba, the Taiwan-born Tsai has degrees from Yale (yes, that’s degrees with an “s”), played college lacrosse (sports!), met his wife at a restaurant (he’s just like us!), and is worth $8.9 billion (not like us).
Tsai’s entry into league ownership is yet another instance of tech money entering the league at a time when the NBA’s popularity is soaring. Some, like longtime Rockets owner Leslie Alexander and Prokhorov (who, by the way, is remaining in control of the Nets’ arena, Barclays Center), have cashed in as a result. Fortunately for them, there are apparently plenty of rich people seeking a way into the NBA’s elite club.
Prokhorov's big payday comes even though he’s led a disastrous stretch in Nets history. The Nets have just two winning seasons and have made the playoffs three times since Prokhorov bought an 80 percent stake in May 2010. He oversaw the jump from New Jersey to Brooklyn … but was also a key figure in one of the worst trades in sports history. The team finished in the bottom three the past two seasons, but has exactly zero elite draft prospects to show for its pain and suffering.
But despite that, the Nets now seem headed in the right direction on the court. Chock-full of intriguing young players and having both a GM (Sean Marks) and a coach (Kenny Atkinson) with a clear vision to develop young talent, Brooklyn has been fun to watch this season. Through five games, the Nets have a winning record (3-2) and the league’s sixth-best offense (... and the no. 27 defense). There’s promise there, and with a top-10 market there’s also no reason they can’t lure free agents and succeed in the future. Even at $2.3 billion, the Nets may be a bargain.