at a recent press conference inside the Four Seasons Hotel, new Nets owner, Mikhail Prokhorov, jokingly announced that he "comes in peace."
The Russian oligarch, officially approved by the NBA to take the reigns from former owner, Bruce Ratner, on May 11th, made the local rounds a week later. It was all jokes during stops at Gracie Mansion, Yankees Stadium and the WFAN studios for a sit-down with sports-talk guru, Mike Francesa.
The tour however began at the posh hotel where the imposing, 6'7" billionaire looked into the mics and cameras emotionlessly. In his thick accent he opened with: "For me it's a great pleasure to be here as the new owner of the Nets, the team with the best record in the NBA." After a pause for laughter, and with a sudden look of confusion on his face, Proky as he is known by Net fans, then asked: "Was I misinformed?"
From that very moment, Prokhorov had the local press, Mayor Bloomberg, Yankees management (partial owners of the Nets until the team was sold to Ratner in January of 2004) and even the often grouchy but popular radio host eating out of his hands. Of course the oligarch didn't make his billions (he's woth 17 billion dollars to be exact) by telling jokes. Nor where all of his comments intended for laughter. His biggest punchline came when sincerely announcing that the Nets, just off an obscenely inept 12-70 season, will win an NBA championship within the next five seasons. If that didn't leave his audience in stitches, Proky further predicted that that upcoming championship will only be the first step in creating a Lakers-like dynasty.
Again that part, or Proky's claims that he will turn the Nets into the NBA's first global brand, were not meant for laughs.
He may come in peace but still plans on taking over the NBA in a way not seen since Red Aurebach built the Celtics. Unlike Aurebach, who arrived to the then faltering Celtics organization in 1950 after several mediocre campaigns coaching the Washington Capitols and Tri-Cities Blackhawks, Prokhorov is already a proven winner.
And while the hapless Nets finished with the worst record any NBA team has ever seen in over a decade, they just might have the best potential in the NBA. Their roster is filled with holes. Only point guard, Devin Harris, and center, Brook Lopez, can be considered "keepers." Still, there is some young talent there like, Chris Douglas Roberts, and Terrence Williams. Both are young, athletic slashers, versatile enough to play both guard spots as well as small forward. Unfortunately, despite their youth, both have already developed a reputation for being head cases. Shooting guard, Courtney Lee, isn't quite as young, athletic or versatile but is a stable and proven NBA starter. The rest of the team isn't worth the Internet space provided here but GM, Rod Thorn, should have few problems filling out those spots. With 9 draft picks coming to the team over the next 3 seasons (including what can be the top pick this year) and the league's most cap space to spend on free agents this summer, the future looks bright. Especially since one of the free agents will be LeBron James, inarguably the world's greatest player since Michael Jordan. While most might scoff at the idea of King James coming to the future Kings County team (after a brief stop in Newark) the Nets are one of only about 3 or 4 teams who could afford him. Playing in what will be the world's most expensive arena and in the world's most important city should be major selling points. As will be playing for Mikhail Prokhorov, perhaps the world's most interesting man.
Despite being only 45, the oligarch has already turned around Russia's banking and many mining industries while also dabbling in everything from Russian media, to electric energy, to sports, to even some live entertainment which three years ago landed him in a French jail cell.
Proky was born in 1965 to educated, professional, but lower middle class parents in a poorer section of Moscow. His father was head of the Soviet Sports Committee but do to the heavy constraints of the old communist financial system, was paid little for his work. Proky's first bit of luck came by simply being born a generation later when those constraints came tumbling down during the era of Perestroika.
In college, at the prestigious Moscow Financial Institute, Mikhail was able to purchase blue jeans, stonewash them and sell them for 15 times the amount of his original investment. Almost overnight, the founder of one of Russia's first jean brands was making more than all of his international finance professors combined. Still, even with his new found fortune, and after the unfortunate loss of his parents who both died of heart disease within a year of each other, Proky stayed in school and later pursued a career in banking. His timing could not have been better as the Soviet Union was in the process of breaking and Russia was opening itself to private banks.
Vladimir Potanin founded two of Russia's largest private banks and called on young Mikhail to run them. As Potanin became the face of the new banks, his protege became the brains. Proky's first success was in simply surviving during a time when many bankers were being killed off by rivals and the mobsters they worked with. Despite his 6'7'' frame, Proky stayed clear of the public eye and thus the violence while making millions for himself and Potanin.
The two fell into luck again in 1995 when Russia, in the middle of a decade long financial crisis began selling off its state owned assets. Prokhorov had done business with these companies (just as he had earlier helped out in bailing out the entire government) for years and knew to buy up the biggest of all assets, Norilsk Nickel, a Siberian company which mined for nickel, copper, platinum and other raw resources. Thanks to close, insider ties to the Kremlin, Norilsk Nickel was purchased for little more than a nickel and after greatly reshaping the Arctic based mining company, Prokhorov made his first billion by decade's end.
Enormous profits made on Norilsk lead to the acquisition of other mining companies as well as the famed but nearly bankrupt Russian basketball team, CSKA Moscow. In 2006 they won their first EuroLeague Championship in 35 years. Proky's fame, fortune and success was sidetracked less than a year later however when he was detained for suspicion of the international trafficking of prostitutes.
The incident happened at a French ski resort in January, 2007. The bachelor, as famous for partying as his love for skiing and other "extreme" sports, was throwing a New Year's Eve party for other millionaires and billionaires and had models (not prostitutes) flown in from Russia for the occasion.
The previously private Proky was very publicly thrown behind bars for four days. Building on his new bad boy image, Proky spent his jail stint practicing his kick boxing moves until being cleared of all charges. Still, the mixup created some tension between France and Russia. That tension was not dowsed when Proky declared that "The French elite is envious because they are lagging behind in fashion, life and sex drive."
The Vladimirs were not happy. Due to disagreements on future investments, financial partner Potanin was pushing to have Proky bought out of Norilsk. Worse yet, so was Russian President, Vladimir Putin. By March of 2007 Proky sold off most of his stocks for 10 billion dollars and consolidated his assets in a newly formed financial group called Onexim.
Luck struck once again as shortly after cashing in his chips the Russian stock market crashed. Investors like Potanin lost fortunes while Prokhorov rose to become the second richest man in Russia and one of the 40 richest men in the world. His one sour note in the Norilsk divorce, was the loss of the company owned basketball team, CSKA Moscow, formerly the Soviet Red Army team.
The combination of Proky's love of sports, sour business and political relations back home, and having billions to spend freely brought him to the NBA. After informal discussions with James Dolan to buy the New York Knicks went no where, Proky was recruited by Nets CEO, Brett Yormark to buy the Nets in the summer of 2009.
Even before their 12-70 disaster, the writing was on the wall for Nets owner, Bruce Ratner. Against the wishes of his uncle and other relatives, Ratner had earlier used the family company, Forest City Ratner, to buy the New Jersey Nets for 300 million dollars in January, 2004.
Ratner, with a long history of development throughout New York City, purchased the Nets with the hopes of moving the team to a new, FCR built home in Brooklyn. The arena itself was supposed to be part of a 20+ office and residential building mega-development in the newly gentrified, Prospect Heights section of the borough. Coincidentally, or the opposite of that, the entire complex was to be built directly across the street from the Atlantic Terminal and Center Malls. The two malls, connected by a footbridge, as well as an accompanying office tower, had been built by Ratner in two separate stages between 1994 and 2004.
Poor reviews by locals aside, the malls and office tower were somewhat welcomed for transforming a long blighted area that had been a wholesale meat market district for decades and then became an abandoned wasteland featuring nothing for many decades more. While three decades worth of plans from previous developers to build middle income co-ops, a CUNY campus, even a basketball arena, came and went, Ratner finally accomplished something on the long neglected lots. Still, plans for his own arena across the street, as well as the mini-city attached to it, were not as welcomed. Although most of the complex was to be built over an MTA owned rail yard, much of the project involved building over privately owned houses and businesses.
Those private owners, led by Daniel Goldstein, founder of Develop Don't Destroy Brooklyn, fought against the project and the threats of eminent domain. For over five years and nearly 30 court cases, FCR and DDDB battled. Each battle ended with an FCR win as the courts took their cue from the city and state who both fully supported Ratner in his plans for a mini-city, arena, and bringing the Nets back to New York.
In fact, it was political insiders like Borough President, Marty Markowitz, who first announced in January 2003 that he would bring a major league team to Brooklyn. He spent the rest of the year trying to convince Ratner to build an arena with the hopes of attracting a major league team, any major league team, to Kings County. Ratner went along with Markowitz as long as he was also allowed to build his mini-city. With a deal struck between the two (originally Markowitz was looking to have an arena built on Coney Island) Ratner began snooping around the NHL and NBA for bites. He quickly found that the Yankee-Nets sports empire (owners of the NY Yankees, NJ Nets, NJ Devils, and YES Network) was about to break apart. Just a year after Markowitz' promise, Ratner was able to pick off the Nets with the intent of moving them to Brooklyn.
Acquiring the Nets from proved to be easy. Building the arena would be a much tougher challenge. Despite all the wins in court, DDDB was not going away, not looking for compromises and certainly not looking for any sudden buy outs. As DDDB continued their endless litigation, the war of attrition began to take its toll on Ratner. This was especially true after the worldwide financial crash of 2008.
Like Wall Street and Detroit, Ratner was looking for a bailout. Overpaying for the team, mounting interest on team debt, a bad TV contract with YES, big money contracts to players who were past their prime, low attendance numbers, and constant battles in court had taken their toll. This as projected construction costs to the constantly delayed arena soared and investors bailed.
In the summer of 2009 Ratner slashed the team's payroll (primarily seen in the Vince Carter salary dump) let go of assistant coaches, scouts and middle management, even the team psychiatrist in hopes of putting a stop to the bleeding. After a few off years, the team made up of unproven raw talent and veterans with little talent, was destined to hit rock bottom. Although few predicted a 12 win season, one that until a late season "hot" streak, flirted with being the worst record of all time, most knew that Ratner could no longer afford life in the NBA.
He was being priced out just as Prokhorov was looking for a way in. While other potential buyers like former Yahoo! CEO Terry Semel and former NYMEX Chair Vince Viola (both Brooklyn natives) made offers, none could come close to covering FCR's debt with the Nets.
On September 22nd, 2009, just six weeks before the start of the 2009-10 season, Prokhorov agreed to take the Nets off Ratner's hands. For 200 million dollars, as well as hundreds of millions more in debt relief, Proky agreed to purchase 80% of the club, 45% of the future arena and a small share of the 23 acre mini-city that Ratner still intends on building.
Although the fate of the 5 billion dollar mini-city is still up in the air, the arena is a go having cleared its final legal hurdle this past March. The NBA vote of approval earlier this month made the sale final. With it came the end of the Ratner regime and the start of a new one led by the NBA's first foreign owner.
The team is now on firm financial ground for the first time in years. A psychiatrist can be rehired to heal the emotional wounds of a 70 loss season. Construction has started on what will be the world's most expensive arena. Still, little is known on how Prokhorov plans on bringing a title to the Nets. Proky can do the little things. He can add the biggest and best staff in the NBA. He can have his players staying in the best hotels while on the road. He can, as proven in the past, throw incredible parties as well. But like salaries in the old Soviet Union, the NBA has a strict cap on just how much teams can spend on player payrolls. He can't simply buy titles like the NY Yankees or Real Madrid. Instead, he'll need some luck. Thankfully, as LeBron James enters free agency, Proky knows that luck is usually on his side. He says he comes in peace but the addition of Proky just might lead to the type of war against the Manhattan Knicks that every previous Nets owner from Ratner, to Ray Chambers, to Joe Taub, to Roy Boe, to Arthur Brown had always dreamed of.*
