MOSCOW, Russia — Mikhail Prokhorov is possibly Russia’s tallest man. He’s definitely its richest. A household name in Moscow, he is now exporting his fame abroad, after signing a provisional deal on Wednesday to buy a majority stake in the New Jersey Jets.
The deal will see Prokhorov investing $200 million in exchange for an 80 percent stake in the basketball team and a 45 percent stake in the Barclays Center, due to be built in Brooklyn to house the team after its move to the borough.
The move will likely come as a shock to most Americans. The oligarchs have so far kept their luxury sports buys to European shores, with Roman Abramovich scooping up U.K. football club Chelsea in 2003 and Alisher Usmanov, a controversial Uzbek mining tycoon, buying into Arsenal, another U.K. football club, in 2007.
But basketball has always been Prokhorov’s game. Considering his height — at 6’7” he stands high above his stocky compatriots — that comes as little surprise. Prokhorov has said he will become “the only NBA owner who can dunk,” an unnamed executive who has spoken with him told The New York Times.
Many are now touting his experience: For several years Prokhorov helped fund CSKA, one of Moscow’s premier basketball teams, possibly in anticipation of what he himself hinted would be an involved role in the Nets’ future. This is not just an investment to him. “We are interested in the project only if we can use the techniques of the NBA for the systematic development of basketball in Russia,” Prokhorov wrote on his blog on Tuesday, explaining his interest in the deal.
So the players may want to brush up on their Russian.
And Americans may want to brush up on their oligarch knowledge. Who is Mikhail Prokhorov?
By all accounts, he is a lucky man. But that is only something that can be said with hindsight.
In 2007, it appeared that Prokhorov’s empire was crumbling. He had been one of the quieter oligarchs, confining himself to the straightforward task of growing Norilsk Nickel, the mining giant he co-owned with fellow oligarch Vladimir Potanin.
Then came the New Year holiday, and no one likes a good New Year’s party like a Russian, and no one knows how to party quite like a Russian oligarch. Prokhorov and a few friends took off for the ski slopes of Courchevel, in the French Alps. A good time was had by all until French police swooped in and arrested 25 people, including Prokhorov and several women, on charges of running a prostitution ring.
According to a report at the time by the respected Kommersant daily, Prokhorov said he met the women at Moscow nightclubs and paid for their trip to France, but never had sex with any of them.
The charges were later dropped, but the scandal changed Prokhorov’s fortunes forever.
It is believed that Vladimir Putin, then president and now prime minister, was less than pleased at the oligarch’s tarnishing of Russia’s image abroad.
One month later, Prokhorov stepped down as CEO of Norilsk Nickel. Thus began a long battle over his role and stake in the company, which finally ended with his selling his 25 percent stake in the venture to RusAl, the aluminum giant owned by oligarch Oleg Deripaska, in April 2008.
A few months later, the financial crisis hit. Prokhorov found himself the sole oligarch sitting on a pile of cash instead of a mountain of debt. He promptly replaced Deripaska as Russia’s richest man, with Forbes putting his worth at $9.5 billion. That also makes him the world’s 40th richest man.
These days, it appears Prokhorov wears a permanent smirk on his face. The prostitution scandal is far behind him, and he is enjoying his status as Russia’s most eligible bachelor. Shortly after the crisis hit, he bought 50 percent of Renaissance Capital, one of Russia’s leading investment banks, for just $500 million, a fraction of its pre-crisis value, and is said to have saved it from near collapse.
Now, he runs Onexim Group, a private investment fund that focuses on technology.
It is through Onexim that Prokhorov made the deal to buy into the Nets, which must still be approved by the team’s board of directors. The deal also gives him an option to buy up to 20 percent of Atlantic Yards Development Co., which will develop real estate near the planned Barclays arena.
“This partnership will ensure the successful completion of a world-class entertainment venue in Brooklyn, the relocation of the NBA Nets basketball team and the economic and housing benefits of the Atlantic Yards Project,” said a joint statement issued Wednesday by Onexim Group, Nets Sports & Entertainment and Forest City Ratner Cos, the group belonging to Bruce Ratner, the Nets’ current owner.