Mikhail Prokhorov Puts Nets Up For Sale

1:36pm: Broussard’s sources also corroborate the story that the Nets are for sale (Twitter link).

1:23pm: Sources confirm Soshnick’s report to Bleacher Report’s Howard Beck, who hears the troubled Russian economy is a catalyst (Twitter link).

1:20pm: Nets CEO Brett Yormark, GM Billy King and chief communications officer Barry Baum are denying the report that Prokhorov has put the team on the market, tweets Chris Broussard of ESPN.com.

12:47pm: The Nets aren’t actively looking to sell the club, according to Tim Bontemps of the New York Post, who adds that nothing appears to have changed, echoing the Prokhorov spokesperson’s statement (Twitter link). Bontemps doesn’t believe there’s any chance the Nets sell before the Hawks do (Twitter link). Still, as Shelburne points out (on Twitter), the spokesperson didn’t explicitly deny Soshnick’s report.

12:29am: A spokesperson for Prokhorov said the owner remains open to listening to offers, but the spokesperson added that no sale is imminent, reports Ramona Shelburne of ESPNLosAngeles.com (Twitter links).

11:46am: Mikhail Prokhorov has put the Nets up for sale and hired the investment banking firm Evercore to help facilitate the transaction, two sources tell Scott Soshnick of Bloomberg.com. The Nets were reportedly in talks with the Guggenheim group on what would have been essentially a merger of assets late last year, but those conversations stalled. Chris Mannix of SI.com reported during the Nets-Guggenheim talks that Prokhorov was actively looking to cash out, though other reports maintained that Prokhorov, who owns 80% of the franchise, was intent on retaining control of the club even if Guggenheim bought a piece of the team. It’s unclear at this point what, if any, role Prokhorov wants to play with the Nets going forward. The Barclays Center arena, of which Prokhorov owns 45%, isn’t part of the sale, according to Soshnick.

Nets minority owner Bruce Ratner, who owns the majority of the arena, hired Evercore last year to help with the sale of his 20% stake in the franchise, but they found no takers, as Soshnick points out. The ability to control the team through ownership of a majority stake would no doubt make the franchise more attractive, and a valuations expert tells Soshnick the franchise is worth $1.3 billion. Earlier reports indicated that the Nets and Guggenheim were working off a valuation of between $1.2 billion and $1.7 billion, while a later dispatch indicated that the Nets wanted to negotiate off of a $1.8 billion valuation.

In June, Prokhorov denied a report indicating that he was listening to offers for the club, saying he has “no interest in selling the team.” Still, another report shortly thereafter indicated that the owner had pledged to curb his team’s record spending to help Ratner find a taker for his share. Prokhorov and Ratner were reportedly seeking a $1 billion valuation at that point, and Prokhorov said he planned to take the club below the NBA’s luxury tax line by 2015/16. The Nets spent more than $190MM in payroll and luxury taxes in 2013/14, and the team was reportedly projected to have lost a league-high $144MM, both figures far outdistancing any other NBA team.

Brooklyn’s payroll is lower this year, at nearly $90.7MM, though the team would owe roughly $26MM in taxes on top of that unless the Nets further cut spending before the end of the regular season. The Nets are reportedly willing to trade Joe Johnson, Deron Williams and Brook Lopez, their three most highly paid players.