Russia's tanking economy and currency might have something to do with the possible sale of the Brooklyn Nets.
For months there have been rumors that Mikhail Prokhorov, the owner of the Brooklyn Nets, is thinking about selling the team. On Tuesday, Bloomberg's Scott Shoshnick reported that the team is for sale.
Bleacher Report's Howard Beck confirmed the report, and then added "Russian economy a driving factor" in a tweet:
Sources confirming @soshnick report: Prokhorov indeed putting his majority stake in the Nets up for sale. Russian economy a driving factor.
— Howard Beck (@HowardBeck) January 13, 2015So what does 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.
It's no secret that the Nets have been hemorrhaging money (the team reportedly lost $144 million in the 2013-2014 season), but that's just pocket change compared to how much Prokhorov lost in Russia over the past year.
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According 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 Dec. 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 about $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 in "somewhere between 90 to 180 days," Charles Baker, a sports and media partner at DLA Piper and the head of the firm's sports mergers and acquisitions 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 on Russia were announced, Prokhorov said that he wanted to move the company that runs the Nets to Russia. At the time, the NBA stated that it 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."
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