With a bank account estimated at in excess of $13 billion, there is little Mikhail Prokhorov wants that he cannot have. But the ease with which Russia's richest man bought the NBA's New Jersey Nets speaks volumes about the ailing financial state of the league.
By striking a deal for $200 million (as well as assuming $180 million in team debt) in exchange for an 80 percent stake in the team and 45 percent of a new the Brooklyn arena at Atlantic Yards, Prokhorov and the NBA have taught us something.
First, we now know that the NBA's financial problems are not collective bargaining posturing by management but in fact very real. In years past, it's been hard to imagine the strait-laced NBA commissioner David Stern rolling out the cashmere carpet for someone with the Russian plutocrat's checkered past. Like many of the new billionaires in Russia's "great frontier" capitalism of the last decade, the precious metals magnate is nobody's saint. He is at the top of the infamous oligarchs who seized control of the USSR's state-owned businesses, and while the country's economy collapsed, he made out like a bandit.
As Jeffrey Mankoff, author of Russian Foreign Policy: The Return of Great Power Politics, said, "The Russian business climate is a little bit... I'm trying to find a politically correct way to put this... it operates in a murky environment that facilitates the success of people who have done things in a dubious environment. Because Russia is such a murky place in which to do business, there are not a lot of people who are completely untainted. Anybody who has made that much money has had to make some compromises along the way."
Prokhorov, it was revealed in April, has extensive business arrangements with Robert Mugabe's regime in Zimbabwe. These dealings have been very lucrative yet could, if they continue, be in violation of US sanctions, now that Prokhorov has become league owner. Whatever one may think of the hypocrisy of the United States enforcing sanctions on Mugabe while linking arms with numerous noxious regimes, it is a stubborn fact that the nearly 90-year-old strongman has spent a career brutally repressing social movements -- when he hasn't looted the country with his IMF-backed structural adjustment programs.
When news of the Prokhorov-Mugabe partnerships became public, Representative Bill Pascrell Jr. said, "This is disgusting. Obviously, the Board of Governors of the NBA didn't do their job properly when they vetted this deal." Prokhorov was also arrested in 2007, although not charged, for arranging prostitutes for guests at a French Alpine Villa. The pressure on France by the Russian government to release Prokhorov was said to be very intense.
Yet NBA commissioner Stern vociferously denied that there was anything even slightly shady in Prokhorov's past, saying, "We are pleased that the NBA's Board of Governors approved Mikhail Prokhorov's purchase of majority ownership of the Nets, welcoming into the NBA ownership ranks the league's first majority investor from outside of North America." He has also told everyone to just "call him Mike."
Stern's sycophancy is rooted in Prokhorov's deep pockets: deep enough to push through a grand goal of the league: the conquest of Brooklyn and the rehabilitation of the New Jersey Nets.
The Nets are the league's bottom feeders. Playing in a near empty arena, the team only narrowly avoided, at 12-70, the worst record in NBA history. Their decaying arena in E. Rutherford is like something out of a Philip Roth novel: a symbol more of sorrow than of nostalgia. For years, led by developer Bruce Ratner, the team has aimed to move to Barclays Center at Atlantic Yards in Brooklyn (ironically, or perhaps not-so-coincidentally, Barclays has its own relationship with Mugabe's regime). The Ratner plan represents the largest single-source development in the history of New York City. It has also come up against heavy opposition from a community that has seen Ratner lavished with tax breaks, people moved from their homes and massive civic disruption, and all for a project that some economists believe will have to over-achieve to break even. But Prokhorov, who long made it clear that without a Brooklyn arena the deal would be off, is now crowing at the thought of being the King of Crooklyn.
"This much-anticipated day has finally come and now the real fun begins of building a championship team with a state-of-the-art home in the Barclays Center at Atlantic Yards," Prokhorov said.
No one is happier about this than Ratner, who has been knocked on his heels repeatedly by community resistance. As Candace Carponter, the legal director of Develop Don't Destroy Brooklyn said, "The NBA is so desperate to bail out Bruce Ratner and to get a wealthy international owner that, despite their claims, they failed to do a proper investigation of Mikhail Prokhorov."
Mikhail Prokhorov's reputation as a win-at-all costs "gangster capitalist" may be well earned. But he might actually have to sharpen his chops to keep up with how they have taken care of business in Brooklyn. As Mankoff said, "Given the antics of some former and current professional sports owners in the US, I don't think he'll be any better or worse than some of them."
Follow Dave Zirin on Twitter: www.twitter.com/edgeofsports
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We opponents probably can all agree that Atlantic Yards still won't happen as described at various points along the way: not the jobs, not the opening date, not the tax revenue, not the housing.
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The Barclays Center plans to be the first NBA arena to have meditation chamber.
It is a shame that foreign billionaires are allowed to access, own and influence American institutions. Look at the prominent but negative role that Australian billionaire Rupert Murdoch has played in America media. The godfather of FASCIST News.
From the outside looking in, these people want to own some part of American institutions that not only gives them acess to one of the greatest and richest marketplaces on earth, but gives them status and high visibility on the world stage.
I'm sure this Russian will bring some new element to the game, perhaps his management style -- but it might not bode well for the NBA, the fans or the players. We will see.
In any case, I just wanted to say that it is sometimes difficult to discern the mood/color of remarks (esp. sarcasm, irony, tongue-in-cheek, etc.) when you're not looking at a person or hearing a voice. But I took no offense to your remark. I was glad for a push to delineate the reasons behind my first post.
Appreciate that you understood where I am coming from.
And this would make more sense, because Red Wings traditionally drafted Russian players from Fedorov, Pavel Datsyuk, Kozlov etc.
pretty hypocritical from someone who calls on paying customers to boycott professional basketball games.
People read columns, and then they have the attention span of Kindergarten-age children. This person obviously read your article but didn't understand it or "hear" it. Remember "White Men Can't Jump"? "You can listen to Hendrix, but you can't hear him".
The general public has such a low attention span that politicians have come to know that they cannot give detailed policy discussion for the public to decipher, because they don't have the ability to grasp the material. So, we're stuck with people having to give 30 second sound bites to the uneducated, even if the content is lies. Obvious, this person doesn't realize you are saying the poor financial state of the NBA allowed it to not perform proper due diligence on the new owner of the Nets. That statement from "gimmeabreak444" is an ignorant attempt by someone who just wants to be on the opposite side of any issue he/she doesn't know anything about or cannot grasp the totality of your column. Keep up the good work!!!
There are many questions on how this gentleman has raised his money. It's not just coming from The Nation or other left-of-center publications. The current Russian government is questioning how this "instant" billionaires got access, so quickly, to formerly state owned businesses(that's communism), and it's been said by Russian academic scholars that anyone involved in the quick transfer of these enterprises has dirt under their nails. Few people get to be worth $14 billion in less than 20 years and it doesn't raise a lot of eyebrows.
Remember, Communism is "state owned"; Capitalism is "privately owned". It's much more complicated than that, but this should clear up why no one is calling him or any Russian for that fact a communist. The best place to hide something is a book; get some from your library and start reading them. Their are three prominent communist countries left in the world-Cuba, China, & North Korea. Reading is fundamental
Eh?
I am sure was quite different for Rockefellers, DuPonts, Carnegies not to mention Kennedys and alike.
They all made money puttin' in the honest day's of work,
Why not focus on how jobs are going out to india, pakistan etc. and FORCING the "legal citizens" to the unemployment line and when that dries up they're on the street? PLEASE!
"After graduation from the institute young financier was employed by International bank of economical co-operation (IBEC) – at once as the head of department. Career of banker Prokhorov successfully rose up. But after acquaintance to businessman Vladimir Potanin in 1991 (both of them worked in IBEC) in Prokhorov's career the new period which in many respects advanced all his further destiny began. As mass-media wrote, partners transformed IBEC into own structure, transferred Soviet assets in amount of from 300 to 400 million dollars to the International finance company where Prokhorov held a post of the chairman of board from 1992 till 1993. In 1993 Prokhorov already was the chairman of board of Potanin’s Oneksim-bank. Few years later they realized genius idea of Potanin who developed the scheme of crediting of the government on the security of blocks of shares of the privatized enterprises.
Oneksim-bank purchased petroleum company SIDANKO, a part of Novolipetsk metallurgical industrial complex, Novorossisk marine shipping company and the big share of Northwest marine shipping company. In April, 1996 Prokhorov was included into board of directors of «Norilsk nickel» (then still belongin to the state). and also acquired it in the property. All these enterprises were purchased by Prokhorov and Potanin approximately for third of real value. Suddenly businessmen became the richest people of Russia. "
http://www.rumafia.com/person.php?id=14
He will fit in just fine.