Recently, New Jersey Nets owner Mikhail Prokhorov said in a magazine interview that the Nets would be worth $1 billion by 2015. Two Dime writers argue whether Prokhorov is crazy or clairvoyant:
I don’t think the Nets will be worth $1 billion in 2015 — that’s a huge stretch, considering the highest-valued NBA franchise (L.A. Lakers) are worth about $607 million — but I do believe the Nets will be the most valuable franchise in the League by that time. Here’s why:
It’s a fact that big market teams are worth more than small market ones. The Nets are currently located in New Jersey, never known as an ideal market or place to be associated with (I say this as a Net fan and Jersey resident). Brooklyn, on the other hand, is the world’s most recognizable borough in the world’s biggest and most well-known city. The Nets’ mere presence in Brooklyn will increase their value by at least $100 million. They will market themselves as a Brooklyn team, a New York City team, a big-time team. That will show in their increased value. The Knicks are currently valued at $586 million despite having been awful for the past decade, and most of that can be attributed to NYC; the same effect will take place with the Nets.
2. Barclays Center
The Barclays Center is expected to be one of the top arenas in the NBA once it opens. It will most likely sell out every game and will be the first major sporting venue in Brooklyn since Ebbets Field. (Brooklyn has Keyspan Park, home to the Brooklyn Cyclones minor-league baseball team, but that isn’t “major.”) The arena will also immediately attract concerts, special events, and the New York Islanders hockey team is rumored to be interested in moving there. With Prokhorov owning 45 percent of the arena, there will be an incredible revenue stream coming in compared to the revenue available from the Izod Center. At the Izod, the arena was owned by the New Jersey Sports and Exposition Authority and the Nets had a very poor lease. That won’t be the case with the Barclays Center, not to mention the 20-year, $400 million naming rights agreement with Barclays that will go into effect as soon the team moves there.
3. Mikhail Prokhorov
The most valuable and well-known franchises in the world all have great owners. Ultimately a team’s value is dictated by what the man at the top of the corporate pyramid does. The Cowboys have Jerry Jones, the Redskins have Daniel Snyder, and the Yankees had George Steinbrenner. The Nets now have Mikhail Prokhorov. Prokhorov has indicated he will do whatever it takes to win, and there is no reason to believe he won’t. He took over a failing mineral company (Norilsk Nickel) in Russia and turned it into the world’s largest producer of nickel and palladium. He bought basketball team CSKA Moscow and turned it into not only a Russian powerhouse, but a Euroleague powerhouse as well. There is no reason to believe he won’t be able to turn the Nets into a profitable and successful team with his track record as an incredibly successful business man.
Also, Prokhorov has global connections and global appeal. In his short time as owner of the Nets he has hung out with President Obama and Michael Bloomberg, and has wowed the American media, which comes in addition to his global reputation. His presence and determination will take the Nets global (they are traveling to China for preseason games, and London for regular season games this year), and they will be widely recognized once their move to Brooklyn is complete.
Additionally, by 2015 the Nets will be a perennial playoff team. Prokhorov is a fierce competitor, and wants to win, and his desire to be on top of whatever he does means he will put the necessary resources into this team to make them as good as he expects. However, even if the Nets aren’t a playoff team look at the Redskins. As mentioned above, the Skins are one of the most valuable franchises despite being terrible as of late and a lot of that is due to their stadium and owner, which will be the Nets’ primary assets when it comes to valuing the franchise.
Prokhorov has already become buddy-buddy with Jay-Z, one of the Nets’ part-owners. Jay-Z is from Brooklyn, and having a team in his backyard is something obviously appealing to him, as that is part of the reason he got involved with the Nets in the first place. If Jay-Z continues his increased involvement with the team, and really invests himself in this team that will also help their value. He is one of the most well-known and popular musicians in the entire world, and if he takes the Nets global with him and brings exposure to the team on his world tours, value increases.
5. Brett Yormark
Many of you reading this haven’t heard of Yormark, but he is one of the most imaginative marketing executives in all of sports. He is unafraid to try whatever he thinks might help the team sell tickets, and is a genius when it comes to selling and securing sponsorships. The Barclays Center naming rights deal mentioned above was orchestrated by Yormark, and with him now being able to market the team from Brooklyn, as opposed to East Rutherford, expect him to soak up any available advertising dollars that can come the Nets way, and brand them in a way that appeals to Prokhorov’s global dreams.
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I’m going to be honest here. When I found out about Mikhail Prokhorov’s statements in the most recent issue of Forbes magazine (Russian edition) regarding his hopes for a $200 million purchase of the Nets potentially ballooning to $1 billion in only five years, I thought I was lost in the second layer of a Leonardo DiCaprio dream from Inception.
I’m sure the folks at Forbes did, too. After all, they’re the ones capable of providing the public with yearly franchise valuations, and if anyone knows the various thresholds for team worth, it’s Forbes. Rather than even bother addressing such a ludicrous $1 billion estimation, let’s focus on why the New Jersey Nets … err … Brooklyn Knights … err whatever name this franchise decides upon won’t be the most valuable team in the NBA come 2015.
Quick, when you think of baseball, which team comes to mind? The New York Yankees, right? The answer to the football version of that question is more than likely the Dallas Cowboys. What about for basketball? Maybe the Los Angeles Lakers. Maybe the Boston Celtics. Maybe even the Duke Blue Devils. But certainly NOT the New Jersey Nets.
That’s the problem with this whole concept. Open a brand new arena in a brand new location, where the town is basketball-crazed and dying for a franchise of their own to support. Surround the new complex with new buildings and a shopping area, then inject a bustling nightlife scene, all within walking distance from this gorgeous new facility. Rebrand the team and start fresh, with all the support in the world from one of five boroughs and the entire state of New Jersey. Sounds like a fail-proof plan if you’re aiming your franchise for the upper echelon of the NBA, right?
Only one problem remains: the Nets are still the Nets. And that’s one thing that’s NOT going to change by 2015.
There are many reason the Yankees, Cowboys and the Lakers are the most global of American sports franchises, but let’s focus on perhaps the most important two: history and star-power.
The Nets have never won a championship, let alone 16 like the Lakers. The team doesn’t have a Top-25 player in the NBA, let alone maybe the best ever. Need more? Last year, the Nets won 12 games total, losing the Eastern Conference race by almost 50 games. They were out of the running before the season even started, forced to watch the playoffs from home. And what did they see? A rugged Lakers capture their second straight title by defeating their archenemy in a grueling seven-game set, adding another chapter to arguably the most historic and incredible rivalry in sports history. Uh, do the Nets even have a rival? Did they add anyone of considerable value to drastically change anyone’s expectations heading into the season?
The answer to both questions is a resounding no. But in less than five years’ time, this team is going to be the most valuable team in the NBA, worth more than the Los Angeles Lakers? To quote Mugatu from Zoolander: “I feel like I’m taking crazy pills!”
So there’s a snazzy arena opening in Brooklyn. And the owner of the team is now a Russion bazillionaire, who is intent on expanding the team’s brand into foreign waters. Are people in Russia expected to root for the Nets because the owner happens to be Russian? There needs to be talent on the court, a superstar to latch onto, a jersey to buy. After the most hyped free agency period in NBA history, it’s doubtful that Travis Outlaw (the Nets’ most notable offseason acquisition) jerseys from the NBA Store are on backorder by the time his five-year deal runs out in 2015. So for the time being, the team and its fans must be banking on a superstar wanting to hop on board this ship, take it by the helm and guide it to who-knows-where as captain with a questionable crew.
You say the Nets will be the most valuable franchise in the NBA by 2015. I say you need to take a page out of DiCaprio’s book, and make sure you’re not still dreaming.