Hard cash: what will happen to Prokhorov's money after the sale of a stake in Brooklyn Nets

The money Mikhail Prokhorov received from the sale of assets, has not been invested in other projects so far, which means that most of his fortune is now in cash. Forbes estimated how much cash the Russian billionaire has accumulated.
31.07.2017
Forbes
Origin source
In recent years, billionaire Mikhail Prokhorov has systematically sold his property in Russia, and today the basketball club Brooklyn Nets is his biggest asset. But in the near future, a businessman can part with the most expensive: the advisory finance committee of the National Basketball League of the United States, according to Forbes, approved the sale of 49% of Brooklyn Nets. The last word is now left for the advice of the NBA governors, after which the block of shares is expected to be sold.
 
"My goal is to find a local minority partner to strengthen the team's presence in New York, in order to expand our business and establish public relations. I am betrayed by the Nets and I remain the owner of the majority stake in the team, "he said earlier in an interview with Bloomberg, commenting on a possible sale. It is assumed that the arena of Barclays Center will remain under the control of the Russian billionaire.

The billionaire, which has recently received money from the sale of assets, has not yet invested in other projects, which means that most of his fortune falls on the cache. Forbes analyzed how the structure of the businessman's condition, once part of the three richest people in Russia, changed after the deals, and how it will change when Prokhorov finds a buyer for 49% of the basketball club.

Active seller

In April 2016, on the day of the direct line of President Vladimir Putin, the FSB and the Federal Tax Service conducted searches and seizure of documents in Onexim's head office, Mikhail Prokhorov and the companies controlled by him, in connection with "possible evasion of taxes." As an unofficial reason, the editorial policy of the holding RBC, which published several investigations about offshore accounts of people from the entourage of President Vladimir Putin, was called. But the investigative actions did not affect RBC. In May 2016, the media holding left the chief editor Elizabeth Osetinskaya, editor-in-chief of news agency Roman Badanin and editor-in-chief of the newspaper Maxim Solius. In July 2016 Vedomosti reported that the billionaire plans to sell all Russian assets.

In June 2017, RBC was sold to businessman Grigory Berezkin. RBC was not the only media asset of the entrepreneur: in 2008, together with the founder of the newspaper Kommersant, Vladimir Yakovlev, he created a media group ZhV !, which included the Snob project, the Russky Pioner magazine, the F5 newspaper and the Zhivi! Television channel dedicated to a healthy image Life. But in 2013, the media group ceased to exist, and now only Prokhorov has the magazine Snob.

One of the largest assets of the businessman was 20% of Uralkali. But in July 2016, he sold the package to Dmitry Lobyak, a classmate of Dmitry Mazepin, who controls Uralkali through Uralkhim. The deal was valued at $ 1.6 billion. In December 2016, Prokhorov sold OPIN, one of the largest development groups in the Moscow region, to the structures of Roman Avdeev, and in February 2017 Onexim sold 3.32 percent of UC Rusal's 17 shares , A 02% stake for $ 240 million.

In April of this year, Prokhorov laid all his share (86%) of Renaissance Credit Bank in Alfa-Bank Mikhail Fridman. Now in Russia, the billionaire owns, in addition to Snob and the remaining stake in UC Rusal, the insurance company Soglasie, the bank Renaissance Capital, the IFC bank (47.5%), the Kvadra and Intergeo energy company engaged in the development of deposits Non-ferrous metals. All of these assets, together with the remaining billionaire stake in Brooklyn Nets after the deal to sell the package in the basketball club Forbes estimates at $ 3.2 billion - it's only 36% of Prokhorov's condition. The rest is cash.

Ball Game

Prokhorov bought a controlling stake in Brooklyn Nets (80%) and 45% stake in the stadium in 2010, paying for all $ 223 million. The Russian businessman became the first foreign owner of the NBA team. Then the club was called New Jersey Nets and was based in New Jersey. The team with a 50-year history did not make an impression of a successful investment: in the last season before the sale, he won 43 games and lost 48, the second consecutive year without going into the playoffs.

But, it seems, this is what attracted Prokhorov. "The only way is up. I like to look for cheap assets with problems. It charges me with energy, "the billionaire explained in an interview with Bloomberg Markets magazine. In the next season after the purchase, the team lost 16 times in a row.

The owner of Nets actively invested in strengthening the membership, turning the club into one of the leaders of the NBA in terms of the payroll and the luxury tax paid for exceeding the salary ceiling, Kommersant notes. But, despite this, Brooklyn only managed to get out three times in the play-off, and last season it did become the worst team of the Eastern Conference, which, perhaps, strengthened Prokhorov in the idea that it was necessary to part with the asset, the newspaper believes.

In addition to Brooklyn Nets, Barclays Center is home to the iconic team of the National Hockey League of the United States - New York Islanders, which signed a contract for a 25-year lease and made the Barclays Center its home arena. The stadium paid an average of $ 53.5 million a year to the team in exchange for controlling business operations, including revenue from ticket sales and souvenirs with team symbols.

As a result, this decision was not very successful for both sides. Hockey players complained about bad ice, spectators - on the unfortunate location of the stands and bad lines of sight. The result was a sharp decline in attendance of the team's matches, and now New York Islanders want to terminate the concluded lease and are looking for a new place for the home arena.

In January 2017, Forbes estimated Brooklyn Nets at $ 1.8 billion at an annual revenue of $ 223 million. A year earlier, the club's value was estimated at $ 1.7 billion with revenue of $ 220 million, and in 2015 at $ 1.5 billion (with revenue of $ 212 million ).