Weekly Digest: the Tsai-Koch Deal Shows a Hugely Valuable Franchise
Parent BSE Global said to be worth $5.8 billion, Nets + ArenaCo $5.3 billion. Does anyone care about #sportswashing?
This digest offers a way for people to keep up with my Atlantic Yards/Pacific Park Report blog, as well as my other coverage in this newsletter and elsewhere.
We knew it was coming—smart to wait until after the NBA season—but not exactly when and on what terms.
So it was astounding to read Sportico’s scoop that the family of Julia Koch, the widow of notorious right-wing funder David Koch, would be buying 15% of BSE Global, the parent company of the Brooklyn Nets and Barclays Center operating company, at a valuation of $6 billion, which implied a cash infusion of $900 million.
And if the final numbers are closer to $5.8 billion (according to one source) and $688 million—which doesn’t quite make sense, until perhaps the paying down of debt gets factored in—they’re still astounding.
Consider: the Nets are said to be valued at $3.8 billion, the arena—er, the arena company—at $1.5 billion, and the New York Liberty at $200 million, a WNBA record. The Nets once cost $300 million, and Joe Tsai, in a transaction that closed in 2019, bought the team and arena company from Mikhail Prokhorov for somewhere between $3 billion and $3.3 billion.
The controversy dies down
I haven’t seen any newspaper sports columnist take on the politics of the new ownership, though it was mentioned during a recent TrueHoop podcast (go to 48:20). The publication does not ignore the ugly history of many NBA owner fortunes.
As one fan posted on NetsDaily, "Who harmed more people, [former Nets] Kyrie [Irving] posting a video on his IG [seemingly endorsing an anti-Semitic video] or the Koch’s investing millions into anti-climate change propaganda, anti abortion propaganda, racism denial, and anti DEI tactics?”
Still, as I wrote in March, I think the "tainted" funds from the new part-owner couldn't tarnish the spirit of the teams--as one local lawmaker suggested--given that the #sportswashing began long ago.
Consider the owners: original developer Bruce Ratner (eminent domain, heavy-handed politics), Mikhail Prokhorov (Russian oligarch with "tricky" history getting rich in the post-Soviet world; Joe Tsai (Alibaba billionaire who defends China to the hilt).
Don't forget that Barclays, the arena naming rights sponsor, is an admitted felon (for fixing the foreign exchange spot market) and should have, as I argued, been ejected from the naming rights deal, given state strictures on dealing with such a felon.
Though I don’t think protesting the Kochs is the hill to die on, their role shouldn’t be ignored. Stay tuned for more.
What about #sportswashing?
NetsDaily was one of the few publications to take on the issue of #sportswashing, suggesting we don’t know the Kochs’ ultimate goal until Julia Koch speaks about the sale beyond her anodyne statements packaged by BSE Global’s public relations apparatus.
“If you’re trying to separate yourself or your children from the more controversial aspects of the Kochs’ legacy, their political donations, lobbying, etc. sports has a lot of reputational and financial advantages,” observed Net Income, aka Bob Windrem. “There’s also no guarantee it won’t backfire.”
I think the odds are on their side, since the Kochs are minority owners, and they surely now will attach their names to all the efforts by BSE Global and the Nets to contribute to the “community.”
“If it is ‘sports washing,’” wrote Windrem, “Koch’s motivation may not be cleaning up or softening the hardline edge of her company but a more personal one, building a new image for herself and particularly her children, separate from Koch corporate headquarters in Wichita Kansas.”
That seems a given, part of a new arc for the family. He adds: “Maybe she and they just want to have fun using Koch money.”
True that. They have so much they can have a lot of different kinds of fun, since $688 million is below 1.05% of the family’s recently calculated $65.6 billion net worth, good enough for #23 on the Forbes Billionaires list. Joe Tsai is a mere #298, at $8.5 billion.
From this newsletter: nothing this past week
No, I didn’t have time for a big-picture article this past week, but rest assured, one is coming soon, in another publication, which I will share.
And I have a couple of others in the works.
From Atlantic Yards/Pacific Park Report
June 18: In 2024 Forbes Global 2000, Greenland Holdings, parent of Greenland USA, continues drop, to #891 from #831. It was once #307. Annual loss: $1.6B.
We shouldn’t forget that Atlantic Yards/Pacific Park is stalled, and the majority owner (for now) no longer has deep pockets.
June 19: With BSE Global (Brooklyn Nets, ArenaCo, Liberty & more) valued at $6B, Joe & Clara Tsai set to reap $900 million in 15% sale to #sportswashing Koch clan.
June 20: No surprise: in latest required six-month look-ahead, developer Greenland USA predicts no construction on the stalled project. Again, no deep pockets.
June 21: Why the Brooklyn Fanatics team store at the Barclays Center reaps profits: it's part of a monopoly, as The American Prospect explains. Remember, the Brooklyn Nets are above all a “sports entertainment corporation,” not a civic asset.
June 22: Revising the Koch-Tsai deal: new reports say $5.8B total, including $5.3B for Brooklyn Nets + arena company; $688M from the Kochs, mainly to retire debt.