With a bank account estimated at in excess of $13 billion, there is little Mikhail Prokhorov wants that he cannot have. But the ease with which Russia’s richest man bought the NBA’s New Jersey Nets speaks volumes about the ailing financial state of the league.
By striking a deal for $200 million (as well as assuming $180 million in team debt) in exchange for an 80 percent stake in the team and 45 percent of a new the Brooklyn arena at Atlantic Yards, Prokhorov and the NBA have taught us something.
First, we now know that the NBA’s financial problems are not collective bargaining posturing by management but in fact very real. In years past, it’s been hard to imagine the strait-laced NBA commissioner David Stern rolling out the cashmere carpet for someone with the Russian plutocrat’s checkered past. Like many of the new billionaires in Russia’s “great frontier” capitalism of the last decade, the precious metals magnate is nobody’s saint. He is at the top of the infamous oligarchs who seized control of the USSR’s state-owned businesses, and while the country’s economy collapsed, he made out like a bandit.
As Jeffrey Mankoff, author of Russian Foreign Policy: The Return of Great Power Politics, said, "The Russian business climate is a little bit… I’m trying to find a politically correct way to put this… it operates in a murky environment that facilitates the success of people who have done things in a dubious environment. Because Russia is such a murky place in which to do business, there are not a lot of people who are completely untainted. Anybody who has made that much money has had to make some compromises along the way.”
Prokhorov, it was revealed in April, has extensive business arrangements with Robert Mugabe’s regime in Zimbabwe. These dealings have been very lucrative yet could, if they continue, be in violation of US sanctions, now that Prokhorov has become league owner. Whatever one may think of the hypocrisy of the United States enforcing sanctions on Mugabe while linking arms with numerous noxious regimes, it is a stubborn fact that the nearly 90-year-old strongman has spent a career brutally repressing social movements—when he hasn’t looted the country with his IMF-backed structural adjustment programs.
When news of the Prokhorov-Mugabe partnerships became public, Representative Bill Pascrell Jr. said, "This is disgusting. Obviously, the Board of Governors of the NBA didn’t do their job properly when they vetted this deal." Prokhorov was also arrested in 2007, although not charged, for arranging prostitutes for guests at a French Alpine Villa. The pressure on France by the Russian government to release Prokhorov was said to be very intense.