Alibaba’s Cofounder Buys Minority Stake in Brooklyn Nets
The co-founder of Chinese e-commerce giant Alibaba is set to buy a minority stake in the Brooklyn Nets.
Alibaba Group Holding Ltd. Executive Vice Chairman Joe Tsai has agreed to buy 49 percent of the Brooklyn Nets from Russian billionaire Mikhail Prokhorov in a deal that values the National Basketball Association club at a record $2.3 billion.
The agreement gives Tsai the right to buy the remaining stake of the team in 2021, while Prokhorov has the right to keep a 20 percent stake in the team.
The sources said that the price of Tsai's stake will be based upon a $2.3 billion valuation of the team.
Mikhail Prokhorov will stay as the principal and operating owner of the Nets for an additional four years, with a presumption that he will sell his majority stake upon the triggering of Tsai's option.
Tsai, 53, will not oversee any basketball or business operations as a minority partner in the team, responsibilities that will stay with Prokhorov and his management team until he sells his majority stake.
The Nets declined to comment and the transaction doesn’t include the Barclays Center as well, the Brooklyn arena where the team plays.
The price tag is $100 million more than the record $2.2 billion Tilman Fertitta paid for the Houston Rockets last month. That deal included operational control of the team’s arena.
Tsai was born in Taiwan, was educated at Yale, both undergrad and law school, and holds a Canadian citizenship. He has a rich personal history with athletics, including his days as a high school lacrosse and football player at the Lawrenceville School in New Jersey.
Tsai was an avid pickup basketball player at Yale and has been a significant NBA fan for years. His business career has taken him from New York to Asia over the past three decades.
He has expressed enthusiasm over the direction of the franchise with general manager Sean Marks and coach Kenny Atkinson, sources said, and ultimately plans to work on bridging his strong Asian business ties into global business opportunities for the Nets.
Alibaba shares were up 2 percent at $179.66 following the news.
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