There’s a new owner of the Brooklyn Nets.
Alibaba Group Holding Ltd. Executive Vice Chairman Joe Tsai exercised his option to buy the rest of the team that he didn’t already control — along with the Barclays Center arena — ending Mikhail Prokhorov’s ownership tenure and bringing another deep-pocketed international presence to the National Basketball Association.
Financial terms weren’t disclosed, but a person familiar with deal said Tsai paid about $3.5 billion, including debt, for the team and building in total.
Tsai — who has a net worth of $10.3 billion, according to the Bloomberg Billionaires Index — previously bought a 49% stake in the team at a $2.3 billion valuation, which is a record for a US pro sports franchise. He had until 2021 to buy the remaining 51% of the organization, which had already improved its fortunes with the offseason acquisition of star free agents Kyrie Irving and Kevin Durant.
“I will be the beneficiary of Mikhail’s vision, which put the Nets in a great position to compete,” Tsai said in a statement Friday. “We are committed to maintaining Barclays Center iconic status by bringing together culture, community and entertainment for our fans and everyone in New York.”
Excitement is surging around the team, which has spent most of its New York City tenure in the shadow of the Manhattan-based New York Knicks. The Nets made the playoffs last season for the first time in four years, and adding Durant and Irving could drive all business-related activity, such as ticket and suite sales and sponsorship.
A Yale Law School graduate, Taiwan-born Tsai is one of Alibaba’s 18 founding members. Before being recruited in 1999 by Jack Ma, chairman of the Chinese e-commerce giant, he worked as a tax lawyer at Sullivan & Cromwell LLP. Tsai
also owns the WNBA’s New York Liberty. He moved to the US in 1977 to attend an elite boarding school in New Jersey.
The sale requires approval of NBA owners, which is considered a formality since Tsai has already been vetted. The transaction should close by the end of September.
‘A Better Place’
“It has been an honour and a joy to open Barclays Center, bring the Nets to Brooklyn, and watch them grow strong roots in the community while cultivating global appeal,” Prokhorov said. “The team is in a better place today than ever before and I know that Joe will build on that success.”
As part of the shake-up at Prokhorov’s BSE Global, the parent company of the Nets and arena, CEO Brett Yormark
announced his resignation.
As the point person for the Nets relocation and revamp, Yormark led the transformation of the team from a moribund brand to a hip and trendy one. The Nets finished its first season in Brooklyn in the top five in merchandise sales after coming in last the previous year. And a spot on the squad, 42-40 last season, is now coveted by top players in the NBA.
“When I was hired nearly 15 years ago, my goal was to realize the vision for Barclays Center, move the Nets to Brooklyn, and build a world-class sports and entertainment company,” Yormark said.
The $3.5 billion price tag represents a hefty profit for Prokh- -orov, whose Onexim Sports & Entertainment in 2010 paid $223 million for an 80% stake of the team and a 45% share of arena. In 2015, he consolidated ownership of the Nets and the arena in a deal with real estate developer Bruce Ratner’s Forest City Enterprises Inc. that valued the assets at around $1.7 billion.
The National Basketball Association prefers that one owner control the team and the arena where it plays.
Prokhorov, the first non-North American owner of an NBA team, also controls the Nassau Coliseum on Long Island. That building isn’t part of the sale to Tsai, whose sports holdings also include the National Lacrosse League team in San Diego.
Rich Asians have been plowing money into professional sports franchises in Europe and around the world, though buying an NBA team is rare. Indonesian Erick Thohir, chairman of the Mahaka Group, was part of the group that owned the league’s Philadelphia 76ers, but has sold his stake.
Chinese investors have taken more stakes in European soccer teams, including Aston Villa, West Bromwich Albion, Wolverhampton Wanderers and Southampton in England, Italy’s A.C. Milan and Inter Milan, Spain’s Atletico Madrid, and Slavia Prague in the Czech Republic. Though some of the deals haven’t worked out. The Atletico Madrid stake was subsequently sold, and Chinese billionaire Tony Xia, chairman of the Recon Group logistics firm, has given up control of Aston Villa.