Joe Tsai, co-founder of Chinese internet company Alibaba, has completed the acquisition of a 49 per cent stake in the Brooklyn Nets in a deal that reportedly grants the team a record valuation for an NBA basketball franchise.
News of an initial deal was first reported in October but was sealed yesterday (Thursday) with Nets owner Mikhail Prokhorov selling the 49 per cent interest. Financial terms of the deal were not disclosed, but the New York Post newspaper said the agreement values the Nets at $2.35bn (€1.89bn), an NBA record.
Prokhorov, through Onexim Sports and Entertainment Holding USA, will continue to be the controlling owner and the NBA governor of the team. There will be no changes in the day-to-day management of the team’s business or basketball operations.
Prokhorov said: “As we looked for a partner for the team, the number one priority was to find someone who shares our global vision and passion for the future development of the Brooklyn Nets. Those who have followed our story know that, having learned some hard lessons, we are focused on building our culture, and this must be reflected in all that we do – in our players, our staff and our front office.
“It was important to us that we choose a partner who shares our commitment to the highest standards as we create a truly wonderful NBA franchise. I welcome Joe to the organisation and I am looking forward to working with him for years to come.”
A Canadian citizen, Tsai attended the Lawrenceville School in New Jersey where he played lacrosse and American football. He also played lacrosse at the Division I level as an undergraduate at Yale College.
Tsai co-founded Alibaba Group in 1999, and currently oversees the company’s strategic acquisitions and investments as executive vice-chairman. He is a member of the company’s board of directors and sits on the partnership committee of the Alibaba Partnership, which is comprised of a group of senior executives responsible for the day-to-day management of Alibaba Group.
The Nets stressed that Alibaba Group is not party to the transaction, which provides Tsai with an option to acquire further shares in 2021 and, if exercised, become the controlling owner of the team. The announced share sale does not include the Nets’ Barclays Center home arena, which will continue to be wholly owned by Onexim Sports and Entertainment.
Tsai said: “Basketball is a global sport and the NBA is one of the most recognised brands in the world. I am excited about the NBA’s international growth prospects, and hope to play a part in bringing the NBA and the special character of the Brooklyn Nets to fans around the world.”
The Nets transaction eclipses September’s agreement which saw the Houston Rockets secure a new owner, with local businessman Tilman J. Fertitta agreeing a reported $2.2bn deal for the team.
Russian billionaire Prokhorov revealed that he was looking to sell a 49-per-cent stake in the team in April 2017. Prokhorov told Russian news agency R-Sport that 49 per cent of the Nets' shareholding was “up for sale” and he was seeking a buyer.
Prokhorov took full control of the franchise in 2015 after buying out stakes held by Bruce Ratner’s Forest City Enterprises and other investors. At the time, the transaction valued the Nets at approximately $875m and the arena at $825m, inclusive of debt for each asset. Prokhorov became the first foreign owner of an NBA team when he took over.