Russian billionaire Mikhail Prokhorov plans to transfer the Brooklyn Nets to Russia, an apparent response to the increasing tension between the White House and the Kremlin.
Russian President Vladimir Putin poses for a photo with businessman-turned-politician Mikhail Prokhorov during an awarding ceremony at the Kremlin in Moscow, March 24, 2014. (Getty Images)
The professional basketball team, which only recently moved from New Jersey to Brooklyn, N.Y., won’t actually play games in Russia, Bloomberg reported. Rather, Prokhorov, who has a net worth of approximately $12 billion, according to the Bloomberg Billionaires Index, plans to put his team under the control of one of his Russian companies.
The move is most likely a response to Vladimir Putin’s ban on government officials holding foreign accounts and equity. Putin has also called for Russian business owners to be registered in their home country and to pay taxes locally.
But there could be another reason why Prokhorov, who actually ran for president against Putin in 2012, plans to transfer his team to his home country: He’s trying to keep his investment out of the hands of U.S. authorities.
President Barack Obama last week announced sanctions against Russia in response to Putin’s recent actions in Ukraine and Crimea. As a direct result of the volatile relationship between Moscow and Washington, Russian businesses have moved quickly to remove their assets from Western banks, a clear attempt to avoid having their funds frozen.
But even that wasn't enough to protect businessmen like Prokhorov from taking a hit in the pocketbook: His net worth has declined by at least $811 million in 2014 as a major selloff in the Russian markets took a hit on the value of his stock holdings, Bloomberg noted.
So Prokhorov’s plan to transfer the Nets to Russia is likely a mixture of him responding to Putin’s call to register locally and a desire to keep cash investments out of U.S. hands.
“It’s a preventive measure,” Anton Rakhmanov, who helps manage $5 billion in assets at the Sberbank Asset Management in Moscow, told Bloomberg. “It’s his personal decision, it seems, to bring the assets home, where he knows how things work. The market has been very pessimistic and has priced in not only sanctions that were already imposed, but way more than that.”
Prokhorov said in a press conference Monday that the transfer complies with the National Basketball Association’s rules.
“A Russian company will own the basketball club,” said the 48-year-old Moscow native. “This doesn’t violate any NBA rules.”
An NBA spokesman said the organization has yet to receive a formal proposal from the Russian billionaire to change the structure of the Nets’ ownership.
“The Nets are owned by Mikhail Prokhorov through a U.S.- based company,” spokesman Mike Bass said in an email to Bloomberg. “We have received no application, nor is there a process under way through our office to transfer the ownership of the Nets to another company.”
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