Kremlin politics causing change in Prokhorov investments. Nets and Brooklyn now a larger share.

[spaceballer]

Hat tip to Netsdaily, there's a Bloomberg article that says that the government raids on Prokhorov's Russian properties have caused him to re-balance his investment profile by selling off Russian businesses and building up his U.S. holdings, making the Nets and Brooklyn a larger relative proportion of his holdings. Prokhorov's reps dispute this and say the sale and migration of assets was long in the works. Regardless, it does mark a change in asset allocations.

http://www.bloomberg.com/news/articles/2016-08-02/facing-kremlin-full-court-press-nets-owner-pivots-to-brooklyn

There's a particularly interesting chart from the Bloomberg piece.

[MrDollarBills]

He must have pissed Putin off something serious.

This doesn't indicate he plans on selling any time soon though as feared.

[spaceballer]

The Nets are direct beneficiaries of this asset migration. As noted in the article, his investment in the Nets has more than doubled since he acquired the team.

Some examples of the large infusion of investment capital into the Nets organization are the construction of the HSS Training Center and the founding of a D-League team and the purchase of the Nassau Coliseum to host the Long Island Nets D-league team once construction and renovation is complete (they're sharing the HSS Training Center and Barclays with the NBA team this season since renovations aren't done with the Coliseum).

[shakendfries]

...I just hope he lets Marks do his thing

[ChokeFasncists]

Well, he was third in voting in the 2012 election after Putin and the Communists. Dangerous position to be in.

[MrDollarBills]

Well, he was third in voting in the 2012 election after Putin and the Communists. Dangerous position to be in.

Yeah. Might wind out waking up one morning with severe radiation sickness.

[Rockice_24]

I thought Net Sentence said everything the Nets did was to sell the team.

[ChokeFasncists]

Well, he was third in voting in the 2012 election after Putin and the Communists. Dangerous position to be in.

Yeah. Might wind out waking up one morning with severe radiation sickness.

That's not cool.......

[MrDollarBills]

Well, he was third in voting in the 2012 election after Putin and the Communists. Dangerous position to be in.

Yeah. Might wind out waking up one morning with severe radiation sickness.

That's not cool.......

https://en.wikipedia.org/wiki/Poisoning_of_Alexander_Litvinenko

Alexander Litvinenko was a former officer of the Russian Federal Security Service (FSB) and KGB, who fled from court prosecution in Russia and received political asylum in the United Kingdom.

On 1 November 2006, Litvinenko suddenly fell ill and was hospitalized. He died three weeks later, becoming the first confirmed victim of lethal polonium-210-induced acute radiation syndrome.[1] Litvinenko's allegations about the misdeeds of the FSB and his public deathbed accusations that Russian president Vladimir Putin was behind his unusual malady resulted in worldwide media coverage.[2]

Putin and his boys don't screw around. Broad daylight killings are also not out of the question.

[steady]

He must have pissed Putin off something serious.

This doesn't indicate he plans on selling any time soon though as feared.

This surprised me..

"Prokhorov’s Nets investment, together with the Barclays Center, which he also owns, has more than doubled in value since he made it, despite the team’s losing record."

http://www.bloomberg.com/news/articles/2016-08-02/facing-kremlin-full-court-press-nets-owner-pivots-to-brooklyn

[MrDollarBills]

He must have pissed Putin off something serious.

This doesn't indicate he plans on selling any time soon though as feared.

This surprised me..

"Prokhorov’s Nets investment, together with the Barclays Center, which he also owns, has more than doubled in value since he made it, despite the team’s losing record."

http://www.bloomberg.com/news/articles/2016-08-02/facing-kremlin-full-court-press-nets-owner-pivots-to-brooklyn

the arena bring in serious cash. boxing, concerts, etc.

[Net Sentence]

I thought Net Sentence said everything the Nets did was to sell the team.

I know you think this is a good thing but it is not.



Lets see how Prokorov has been trending with his wealth based on the chart from Bloomberg.

- The first thing you might want to get a good grip on is that Prokorov has lost quite a bit in the last 3 years. Looks like he had ~7 Bil in 2013 that is now down to ~4.4 Bil. That is quite a hair cut.

- Prokorov has redirected his wealth into the US

- The article states that most of that wealth in Russia was recently liquidated.

Seems like Prokorov made a mistake by going into politics. Making a political enemy out of Putin wasnt very wise. Putin is making the rules up as he goes and I think will likely freeze Prokorov's assets in Russia. Putin caught wind of how Prokorov is trying to get his money out of Russia so he went in and raided Prokorov's companies. Do you think there is going to be a fair legal proccess or can we assume that the courts are rigged and the outcome is certain to go against Prokorov?

If that does happen, that reduces Prokorov's wealth down to the 2.2 Bil in real estate and his ownership share in the Nets.

I think it's also fair to say that Prokorov is a smart man and that he has anticipated this for quite some time. Since Prokorov is a smart man he realizes when to take his winnings. He has done very well in his investment in the Nets and now is the exact time you sell and take your profits. It's the reason why he has been rumored to be looking for potential buyers. It also makes sense that he went from one of the biggest spenders in the NBA to one of the cheapest. He's trying to keep the balance sheet low so the new owner has max flexibility. Trading Thad made no sense on the basketball side of things but when you view it from the business end you see a team that got rid of the only guaranteed contract in 2018-19 which also coincides with the year we get our first rounder back.

I think Prokorov plans on selling the team in the next 12-18 months. He is asset rich but cash poor on his US based holdings. Prokorov is planning how to rebuild his lost billions and he cant do that without significant liquidity. The term used in the biz is dry gunpowder. You need to stay liquid to seize on opportunities. The Market has been on a 7 year bull run but that's not going to last forever. There is going to be a fall coming in the markets. That's exactly when you are suppose to buy even thought that is when the average investor sells. Prokorov has a well established history of buying during a bear market and he is going to need that dry gunpowder to make his next fortune.

[MrDollarBills]

If he sells, it won't be like he'll be selling the team to a group like Ratner's that tanked the franchise on purpose for a location move. the Nets are set up we just need to get good players in here. I'm not too concerned if he sells, i just would like an ownership group that wants to win but will do so with common sense.

[Net Sentence]

If he sells, it won't be like he'll be selling the team to a group like Ratner's that tanked the franchise on purpose for a location move. the Nets are set up we just need to get good players in here. I'm not too concerned if he sells, i just would like an ownership group that wants to win but will do so with common sense.

It's going to be a happy day once the Russians are gone. It has always felt like the Nets were the pawn in Prokorov's real estate ambitions. Prokorov is the equivalent of Gordon Gekko.

[Kaiser30]

Talking about Prokhorov's change in wealth, it heavily depends on the currency you're valuing it in because of the hefty decline of the Russian Ruble.

US newspapers naturally value his wealth on a USD basis. Back in 2013, 1 Ruble was worth 0.03 USD. As of today, 1 Ruble is only worth 0.015 USD. So even if Prokhorov's companies are still worth as much in Ruble as they were back in 2013, US newspapers account for a hefty loss on a USD basis.

But taking into account that Prokhorov is a Russian and also lives in Russia, it is more likely that he values his investments in Russian Ruble. So his foreign investments have actually doubled their value in Russian Ruble. It sounds a bit weird, but he could be a richer Russian while simultaneoulsy being considered poorer in the US than he was 3 years ago.

As Bloomberg mentions excess cash of 5.7 bn USD after selling off in Russia, I don't see any need of selling any parts of the Nets at the moment.

[Net Sentence]

Talking about Prokhorov's change in wealth, it heavily depends on the currency you're valuing it in because of the hefty decline of the Russian Ruble.

US newspapers naturally value his wealth on a USD basis. Back in 2013, 1 Ruble was worth 0.03 USD. As of today, 1 Ruble is only worth 0.015 USD. So even if Prokhorov's companies are still worth as much in Ruble as they were back in 2013, US newspapers account for a hefty loss on a USD basis.

But taking into account that Prokhorov is a Russian and also lives in Russia, it is more likely that he values his investments in Russian Ruble. So his foreign investments have actually doubled their value in Russian Ruble. It sounds a bit weird, but he could be a richer Russian while simultaneoulsy being considered poorer in the US than he was 3 years ago.

As Bloomberg mentions excess cash of 5.7 bn USD after selling off in Russia, I don't see any need of selling any parts of the Nets at the moment.

I understand what you are saying about the currency denominations but it is all moot. My point is that most of his liquidity is held in Russia. It's not like he can just put the money in a suitcase and carry it out of the country. Putnin is going to locked that money up in Russian courts therefor making it useless.

How much does he have in cash in the US is the question?

[Ror1997]

Yeah let's just forget that the nets agreed to pay Johnson and Crabbe 125 million. Let's forget all the actual reasons why Marks signed bad players to cheap deals. Now is a perfect time to sell! Our team is at an all time low, and has one of the bleakest futures in the NBA. Prokorov is pushing his puppet Sean Marks to sign world class talent like Luis Scola so he can boost the value of the team! Yeah!

No. If Prok was trying to sell, ownership wouldve pushed for him to put a competive team on the floor. Not allow him to tear down the franchise and bring it back up which hurts the teams value.

[Kaiser30]

I understand what you are saying about the currency denominations but it is all moot. My point is that most of his liquidity is held in Russia. It's not like he can just put the money in a suitcase and carry it out of the country. Putnin is going to locked that money up in Russian courts therefor making it useless.

How much does he have in cash in the US is the question?

The currency denomination is highly relevant when talking about his wealth and his foreign investments. Therefore, I brought this issue up.

Talking about his cash in the US, I don't have enough information about how his company is exactly structured and if Putin has put any restrictions in place.
Normally, his US entities could easily acquire cash (if necessary) through a loan of one of his Russian entities. But as I said, I'm not 100% sure about any restrictions in Russia.

[Net Sentence]

Yeah let's just forget that the nets agreed to pay Johnson and Crabbe 125 million. Let's forget all the actual reasons why Marks signed bad players to cheap deals. Now is a perfect time to sell! Our team is at an all time low, and has one of the bleakest futures in the NBA. Prokorov is pushing his puppet Sean Marks to sign world class talent like Luis Scola so he can boost the value of the team! Yeah!

No. If Prok was trying to sell, ownership wouldve pushed for him to put a competive team on the floor. Not allow him to tear down the franchise and bring it back up which hurts the teams value.

Signing Crabbe was all for show. There was very little chance that we were going to pry him away from Paul Allen. It made for nice show but everyone knew that we werent getting him.

Tyler Johnson was the guy Marks actually expected to get. That would have been the most successful get business wise because it would have saved Prokorov over 12 million. How you may ask? Since TJ's contract was a poison pill contract, he would count as 12 mil towards the salary floor but only need to be paid out half that.

Who we have on the team is irrelevant. How we are currently doing as a team is irrelevant. A new owner isnt buying the team for 1 season and they usually clean house anyway. A sports team is a new toy to a billionaire and they want to build it from scratch. Getting the draft pick would be the bigger hold up.

[MrDollarBills]

last time we were up for sale the team got stripped down to bare bones.