- Alibaba co-founder Joe Tsai is going to become the sole owner of the NBA’s Brooklyn Nets along with the operating rights for the Barclays Center for about $3.3 billion
Today it was announced that Alibaba co-founder Joe Tsai is buying the Brooklyn Nets NBA team from Mikhail Prokhorov. Last year, Tsai announced a deal to pay $1 billion for 49% of the Nets and another $1.35 billion over three years for the remaining stake in the Nets. This deal was accelerated and now Tsai is the sole owner of the Nets.
“I’ve had the opportunity to witness up close the Brooklyn Nets rebuild that Mikhail started a few years ago,” said Tsai in a statement. “He hired a front office and coaching staff focused on player development, he supported the organization with all his resources, and he refused to tank. I will be the beneficiary of Mikhail’s vision, which put the Nets in a great position to compete, and for which I am incredibly grateful.”
As part of a separate deal, Tsai also acquired the operating rights to the Barclays Center, which is where the Brooklyn Nets play their home games. Altogether, Tsai is going to be spending about $3.3 billion for the team and the Barclays Center — which is setting a record. Brett Yormark — the CEO of BSE Global (the organization that runs the Barclays Center and the Nets) is stepping down.
“It has been an honor and a joy to open Barclays Center, bring the Nets to Brooklyn, and watch them grow strong roots in the community while cultivating global appeal,” added Prokhorov. “The team is in a better place today than ever before and I know that Joe will build on that success, while continuing to deliver the guest experience at Barclays Center that our fans, employees, and colleagues in the industry enjoy.”
The previous record sale price of a sports team was set by hedge fund manager David Tepper. Tepper paid $2.28 billion for the Carolina Panthers. And in 2017, Tilman Fertitta paid $2.2 billion for the Houston Rockets — which set the record for an NBA team sale at the time.
This coming season will be exciting for the Nets as the team brought on free agents Kevin Durant and Kyrie Irving this summer. While the ownership transfer has to be approved by the NBA, it will likely happen quickly since Tsai went through an approval process for his minority stake last year. The closing of the deal for the arena and the team are expected to close at the end of September.
Tsai also sits on the board of NBA China. This is a big deal for the NBA as the association has about 300 million fans in China. And Tsai owns the WNBA New York Liberty team.
After co-founder Jack Ma, Tsai is the second largest shareholder in Alibaba. And Tsai’s net worth is estimated at about $9.2 billion. And this deal will make Tsai the eight richest sports team owner and the second wealthiest in the NBA after former Microsoft CEO Steve Ballmer.
According to Forbes, the Barclays Center has been underperforming financially since 2012. Even though the Barclays Center is the fourth most popular concert venue in the US, the arena revenue shortfall for 2017-2018 was just $34 million out of a projected $183 million. And the costs were $7 million higher than expected. So the arena saw a loss of $21 million rather than a projected profit of $24 million.
