Lichtenstein: Nets' Prokhorov A Winner On The Finances, But A Loser On The Court
By Steve Lichtenstein
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Somewhere in his Russian bat cave, Nets owner Mikhail Prokhorov probably had two reports on his desk on Thursday.
One was likely a review of the Nets' 91-78 defeat to Cleveland at Barclays Center on Wednesday night, Brooklyn's fourth consecutive loss and fifth in the last six games following Prokhorov's organizational "reset" 10 days ago. At 11-32, the Nets are only two games up on the Los Angeles Lakers for the third-worst mark in the NBA.
The other report is likely the latest news from Forbes which says the Nets are ranked as the seventh-most valuable franchise in the league, at about $1.7 billion. No owner exceeded Prokhorov's five-year annualized rate of return of 40.4 percent.
Wonder which Prokhorov read first?
For billionaires like Prokhorov, success is measured by net worth (and its percentage increase) as opposed to something so plebian as the won-loss record of one of the assets.
It turns out that Prokhorov, who recently bought out Bruce Ratner and his partners to increase his stake in the team and Barclays Center to 100 percent, made very wise investments to bolster his already vast wealth, but it came at the expense of the franchise's competitive standing.
By many accounts, former Brooklyn general manager Billy King was under direct orders from Prokhorov and his Russian minions to go all in upon the Nets' move into New York City from New Jersey in 2012. Prokhorov believed the Nets needed to make big splashes in order to create a new fan base in a town that adored the Knicks.
The plan failed in every way imaginable -- on the court.
Sure the Nets made the playoffs the past three seasons, but they won only one series. Any sober analyst who follows the sport would rank the Nets as the bleakest of all franchises. Even the perennially-tanking Sixers have some hope. But thanks to King's gross misunderstanding of what is considered valuable in the modern era, the Nets are stuck with a pathetic roster with no avenue for immediate improvement.
They are sans their own first-round draft pick until 2019 (the Celtics own the Nets' selections in 2016 and 2018 and can swap draft slots in 2017). Some of their upcoming second-round draft picks are also at risk of getting dealt or swapped, though it should be noted that the Nets have exercised opportunities in the past to purchase very late picks.
Brooklyn will have some salary cap space (estimated to be around $40 million if it cuts ties with point guard Jarrett Jack, whose $6.3 million contract can be bought out for $500,000) this coming offseason, but with the new TV deal about to kick in, so will virtually every other team.
All of Prokhorov's assertions that the Nets are only a few players away from contention (maybe if those players were LeBron James and Kevin Durant) and that Brooklyn is a prime destination because of the new training facility and future D-League team aren't even worthy of KGB propaganda.
The Nets are in worse shape than they were in 2010. In May of that horrific season, in which they went 12-70, Onexim Sports and Entertainment, which was founded by Prokhorov, purchased 80 percent of the team and 45 percent of Barclays Center. The reported price was somewhere around $200 million plus the assumption of about $160 million in debt.
Even when you take into account the Nets' operating losses over his tenure (which includes over $120 million in luxury tax payments, according to NetsDaily.com), Prokhorov has more than doubled his initial investments and subsequent $285 million payout to consolidate ownership of the entity a month ago.
Except that we don't root for rich guys to get richer.
And what matters more than the amount of money spent to build the team is how it's spent. The Mets just won a pennant despite Fred Wilpon's frugality because the team was entrusted to professional management. Also, remember that the foundation of the Yankees' last string of titles was laid when George Steinbrenner was suspended. Gene Michael drafted and developed "The Core Four," among his many moves.
Managerial acumen is even more important in the NBA. The salary cap, with its rules that give huge financial advantages to teams willing to re-sign their own free agents and penalizes those owners who spend over the luxury tax threshold, makes it imperative that you don't get the big deals wrong.
In order for the Nets to hit on their new general manager choice and avoid repeating those past mistakes, Prokhorov needs to give the GM the authority to veto the Russian Mob when they want to shoot for the moon.
No more "Yes men" like King.
If Prokhorov won't change the culture in which non-NBA experts in Russia are making the basketball-related strategic decisions, Nets fans would be better off if he just cashed in his chips.
Prokhorov has often teased the media about selling, but he has always caught himself just in time to deny that he is looking to get out.
"From time to time, some people came to us and they gave us a bid," Prokhorov said at his Jan. 11 press conference to announce the firing of coach Lionel Hollins and "reassignment" of King. "I think it's not bad to receive bids from the market -- I'm just a businessman."
Which is fine, but any competent general manager candidate will want to make sure that Prokhorov has learned to get out of the way when it comes to his plan to get the Nets out of the abyss he created.
For a FAN's perspective of the Nets and Jets, follow Steve on Twitter @SteveLichtenst1
