Nets owner Mikhail Prokhorov has reached an agreement to sell a 49% minority stake in the Nets to Alibaba executive vice chairman and co-founder Joseph Tsai, according to Adrian Wojnarowski and Zach Lowe of ESPN. League sources tell the ESPN duo that Tsai’s purchase will be based on a $2.3 billion valuation of the franchise.
As Wojnarowski and Lowe detail, the agreement between Prokhorov and Tsai will give the new investor the option to take over a majority interest in the franchise in the not-too-distant future. The plan is for Prokhorov to remain the principal and operating owner of the Nets for four more years, with the assumption that he’ll sell his stake once Tsai triggers his option.
As long as Tsai controls just 49% of the team, Prokhorov will continue to oversee the Nets’ basketball and business operations, sources tell the ESPN duo.
Reports of Prokhorov’s willingness to sell 49% of the Nets, with a path to controlling ownership for the new minority shareholder, have surfaced throughout the year. Tsai, whose Alibaba Group is a massive Chinese e-commerce company, had been cited as a possible buyer multiple times, despite the fact that a spokesperson repeatedly denied his interest.
The $2.3 billion valuation on Tsai’s purchase of the Nets is somewhat surprising. Although Brooklyn is certainly a favorable market, the club has won just 41 total games in the last two years, and currently lacks superstar talent. The agreement also doesn’t include ownership of the Barclays Center, the team’s arena. Nonetheless, the $2.3 billion valuation is a new record for an NBA franchise, surpassing the Rockets’ $2.2 billion sale price from earlier this year.
Although the Nets haven’t enjoyed much on-court success in recent years, Tsai has “expressed enthusiasm over the direction of the franchise,” and has confidence in GM Sean Marks and head coach Kenny Atkinson, sources tell Wojnarowski and Lowe. Tsai intends to take advantage of his strong business ties in Asia to create “global business opportunities” for the Nets.