No, they won’t play their home games there, but billionaire owner Mikhail Prokhorov is planning on putting the team under the control of one of his Russian companies. The move would help Prokhorov fulfill President Vladimir Putin’s request that Russian-owned overseas companies be registered locally and pay taxes to his government. Prokhorov told reporters in the Kremlin yesterday that such a transfer would comply with the National Basketball Association’s rules.

The billionaire may also be looking to keep his investment out of the reach of U.S. lawmakers as President Barack Obama threatens to step up economic sanctions against Russia in response to its annexation of Ukraine’s Crimea peninsula, according to Veles Capital and Sberbank Asset Management. The conflict has already cost Prokhorov, Russia’s eighth wealthiest man. His net worth has slumped $823 million this year as the selloff in Russian markets eroded the value of his holdings in stocks including OAO Uralkali, the world’s biggest potash maker.

“It’s a preventive measure,” Anton Rakhmanov, who helps manage $5 billion in assets as the head of Sberbank Asset Management in Moscow, said in a telephone interview. “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.”
NBA Response

Prokhorov -- who the Bloomberg Billionaires Index estimates is worth $12 billion -- declined to comment on whether his decision to register the Nets in Russia was related to the sanctions.

“A Russian company will own the basketball club,” he said. “This doesn’t violate any NBA rules.”

Mike Bass, a spokesman for the NBA, said the league hasn’t received a proposal from Prokhorov to change the team’s ownership structure.

“The Nets are owned by Mikhail Prokhorov through a U.S.- based company,” Bass said by e-mail. “We have received no application nor is there a process underway through our office to transfer the ownership of the Nets to another company.”
Bear Market

The benchmark Micex Index fell 0.7 percent yesterday in Moscow, adding to a rout that sent it into a bear market this month, as world leaders gathered in The Hague to discuss the Russia-Ukraine conflict. Uralkali dropped 2.2 percent in London trading, leaving it down 16 percent this year.

After the meeting in The Hague, the Group of Seven major powers said they decided to hold a summit in Brussels in June instead of a planned G-8 meeting in Sochi, marking the latest sanction against Russia.

Investors pulled $5.5 billion from Russian equities and bonds this year through March 20, according to data compiled by EPFR Global, a Cambridge, Massachusetts-based firm tracking fund flows. The outflow was $6.1 billion in all of 2013.
80% Stake

Prokhorov bought 80 percent of the Nets and a 45 percent stake in the Barclays Center in Brooklyn from developer Bruce Ratner for $200 million in 2010. Two years later, he was defeated by Putin in the 2012 presidential election, saying afterward that he plans to run for mayor of Moscow.

After losing 20 of their first 30 games to start the season, the Nets have been winning of late. They’ve reeled off four straight victories to improve their record to 37-31.

“Prokhorov is known for being loyal to the Kremlin while the Kremlin is loyal to him,” said Ivan Manaenko, head of research at Veles Capital in Moscow. “His move is politically motivated” and the “question of more sanctions is rather when than an if.”

To contact the reporters on this story: Halia Pavliva in New York at hpavliva@bloomberg.net; Ilya Arkhipov in Moscow at iarkhipov@bloomberg.net

Not sure how it all plays out but I took on some small positions from other profits realized to buy an asset down 25% since November.

My expectation is not a quick trade or resolution but at some level the commodity rich index has a limited floor. Current dividend is 3.4%.
I'll cap my purchase at 5% holding level. I took an initial 2% position. If it drops further, I buy more. If it goes sideways, In time I buy more. If goes up, I buy less. If it surges, I don't buy more. Simple plan. Im more Donnie then Dolan. Stop at 20% down.

Prokhorov who has not always been politically aligned with Putin has been very complient the last few years. Putin takes care of his friends. Its their game and they can play it anyway they want.

Foreign ownership of Nets is fine with the league.

I know its a slippery slope, but I think we as a country and civilized world have to make a stand.

franco12 wrote:I'd like to see the US government seize the Nets and other assets held by Russians here and elsewhere. Why should they be afforded the protection of the rule of law here when their own country doesn't play by the same set of rules.

I know its a slippery slope, but I think we as a country and civilized world have to make a stand.

WE don't play by the same rules either at times.

Too many american companies are in Russia, to much russian money here an in europe to play that. Putin will stretch the game but if he start to hurt the oligopolies that will only go so far.