"One cannot rule out that he is a front man"
An excerpt: Part 6 of TrueHoop's investigation into Mikhail Prokhorov.
|Mar 26, 2019||3|
It’s PUTIN WEEK on TrueHoop. TrueHoop’s investigation into Nets owner Mikhail Prokhorov considers the influence of Vladimir Putin.
The following is an excerpt. Just the first section of today’s post, sent to subscribers in full minutes ago. Join and you can read the whole thing, all of the Prokhorov investigation, and the TrueHoop archives.
Decades ago, rich people bought NBA teams for amounts in the tens of millions of dollars. In those days, a regular person had a shot at understanding where that money came from. Peter Holt bought the Spurs with money from a business his uncle founded selling heavy equipment. Larry Miller wrote a book about how his car dealerships afforded him the Jazz. Amway dollars bought the Magic.
Every NBA team is valued north of a billion dollars now, though, and piles that big are tougher to dig through. Team purchases motivated solely by local pride or fandom make less sense, and even investment returns seem riskier—will the billon-plus dollar purchasers also sell with big appreciation? Everything is more complicated. If you’re a guy looking to understand the motivation of the Nets owner, oligarch Mikhail Prokhorov, nowadays, you find yourself attending conferences like March 2018’s PutinCon, put on by the Human Rights Foundation. There was an application to attend, I was excited to get the email saying I had been accepted, even if there was a little trepidation:
Why go to a conference about the leader of Russia to understand the NBA? Because this NBA owner is, in what would emerge as the word of the day: tricky. Before I ever imagined I’d go to such a conference, I read a ton, and interviewed people. The most plugged in people have the trickiest messages about oligarchs, and how they work. Respected analyst Ilya Zaslavskiy wrote a white paper called “The Tsar and his Business Serfs.” It’s serious stuff, and part of it was presented before Congress. In the paper, he writes:
We do not know how much of Prokhorov’s money is his own and whose money he is investing in Western assets. In fact, given his continued loyalty to the Kremlin, there is no way to fully confirm that his investments are not actually a way to circumvent sanctions. One cannot rule out that he is a front man not only for his own money but also for the capital of Kremlin insiders, who are now buying his assets at surprisingly acceptable prices (at or above current market price). Just under a year ago, Prokhorov publicly said that ownership of the Brooklyn Nets helps him to counteract US sanctions because of the human interaction between teams, professionals and common people.
Prokhorov owns a lot of things—the Nets are but one big asset—but Zaslavskiy suggests that in some of his assets he’s a front man for Kremlin insiders? Could the Nets be one of those things? So we go to PutinCon.
Putin Week rolls on with further insight from PutinCon both Wednesday and Thursday. Friday: David Thorpe assesses the NBA potential of Zion Williamson and how the Blazers cope without Jusuf Nurkic.