Sources: Nets' Prokhorov Cutting Back On Spending In Order To Get $1B Valuation
Nets Owner Mikhail Prokhorov, with hopes of winning a $1B valuation for his team, has "agreed to end his free-spending ways," according to sources cited by Josh Kosman of the N.Y. POST. Sources said that Prokhorov "feared the red ink spilled by the team -- in large part because of his history of deficit spending -- would discourage some potential bidders from forking over enough cash" for minority investor Bruce Ratner’s stake to "gain the 10-figure value." Ratner’s Forest City Enterprises "announced earlier this year it would sell" its 20% stake in the Nets. It needs to get $200M for the team to "hit Prokhorov’s target." The $1B valuation "would be only half" of what former Microsoft CEO Steve Ballmer "just agreed to pay" for the Clippers. However, the Clippers are "profitable and the Nets are far from it." Sources also said that there is a roughly 20% "discount when selling minority stakes." Kosman notes the NBA last year "hit the Nets with a luxury tax bill" of more than $90M after the team spent $102M on payroll, "well over" the $72M maximum allowed before incurring penalties. Sources said that Prokhorov now has "indicated to suitors he will not be so free with the cash." A source said that Prokhorov has "quietly indicated he will keep his payroll under the luxury-tax threshold" starting with the '15-16 season (N.Y. POST, 6/25).