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Nets Being Sold on the Cheap?

10/20/2009

In The New York Times, Ken Belson and Richard Sandomir report that the agreed-to price for the Nets appears to be low:

"On a macro level, the N.B.A. has a few teams in trouble," Ozanian said, referring to the Nets, the Charlotte Bobcats and the Memphis Grizzlies, among others. "The more time went on, the more Ratner was dealing from weakness."

Any sale of an N.B.A. team requires the approval of three-fourths of the owners, a process that could take months. But assuming they approve the deal - and David Stern, the league's commissioner, is said to have the votes lined up - Ratner would not walk away empty-handed.

Prokhorov agreed to make "certain contingent funding commitments" that would cover losses and debts accumulated by the team before it changes hands. And he will assume 80 percent of the more than $200 million in debt the team holds.

As important, Prokhorov will help Ratner, a real estate developer, do what he wants to do most: build the Nets a new arena and possibly thousands of apartments and shops nearby.

Although Ratner may have sold low and perhaps out of desperation, his deal could turn out to be good news for other owners trying to sell teams. That is because Prokhorov could pave the way for more foreign investors to buy American sports teams, driving up the value of teams.

Here's video of Bruce Ratner talking about how the parties came together on the deal, including his trip to Russia to meet with Mikhail Prokhorov. It's hard to know how to assess the team's sales price, as it was in conjunction with a bigger real estate deal, the payoff of which would be hard for anyone to assess at this point.