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Just over one year after he bought a 49% ownership stake in the Brooklyn Nets, Joe Tsai is reportedly ready to buy the rest. That means the team will change hands from a Russian owner to a Taiwanese owner.
As a part of his April 2018 purchase of 49% ownership from majority owner Mikhail Prokhorov, Tsai had the option to buy the remaining 51% by the 2021-2022 NBA season. Now the New York Post and Newsday, citing sources, are both reporting that the team has moved the timetable up for Tsai to buy the rest now, at the same $2.35 billion valuation agreed on last year.
Joe Tsai is a cofounder of Chinese e-commerce giant Alibaba and its current executive chairman. Born in Taiwan, Tsai moved to New Jersey at age 13 for boarding school, then played lacrosse at Yale.
Tsai has quietly amassed a slew of U.S. sports assets: he’s majority owner of the New York Liberty in the WNBA; majority owner of the San Diego Seals in the National Lacrosse League (NLL); led the Series A funding round of Premier Lacrosse League (PLL), the upstart league launched this summer by lax star Paul Rabil. Tsai is worth $9.2 billion, according to Forbes.
If the total price Tsai ends up paying for full ownership of the Nets is indeed $2.35 billion, it becomes the biggest price tag for an NBA team sale ever—and for any U.S. pro sports team.
The NBA sale record is $2.2 billion, the price UFC exec Tilman Fertitta paid for the Houston Rockets in 2017. The overall team sale record is $2.275 billion, the price hedge funder David Tepper paid for the Carolina Panthers last year.
Foreign money in U.S. sports ownership
Most interestingly, Tsai taking full ownership of the Nets continues a trend that has slowly emerged over the last decade: foreign-born owners in the big three U.S. pro sports leagues.
The trend arguably began with Nintendo taking control of the Seattle Mariners in 1992. The Japanese gaming giant owned the team until just recently, in 2016, when the company sold most of its stake to John Stanton, who founded the company that became T-Mobile. Nintendo still retains 10% ownership of the Mariners.
In the NBA, there’s Sacramento Kings owner Vivek Ranadive, who was born in India and came to the U.S. at 16 for college at MIT. He made his money as the founder of Tibco, a real-time computing software company, and bought the Kings from the Maloof family in 2013 for $534 million. (Last year, the Kings became the first NBA team to start mining the cryptocurrency ether.)
The NFL has two examples. Jacksonville Jaguars owner Shad Khan was born in Pakistan and came to America at 16 to study at Illinois. Khan bought the Jaguars in 2011 for $760 million, and attracted headlines in 2017 when he stood and linked arms with his players during the Colin Kaepernick kneeling protests. Minnesota Vikings owner Zygi Wilf, who made his money in real estate development, was born in Germany. His family came to America when he was a small child. Wilf bought the team in 2005 with his partners for a reported $600 million.
Way back in 2008, Dallas Mavericks owner Mark Cuban asked on his personal blog, “When will foreign ownership of US sports teams start?” Cuban argued that foreign ownership makes sense for some of the leagues: “With the international flavor of both the NHL and NBA, is there a better way to ‘mainstream’ a person, product or service into the US than through the purchase of a sports franchise?”
Since Cuban’s post, foreign ownership has clearly started, but gradually and quietly. Joe Tsai, as a prominent executive at a giant, closely-watched Chinese tech company, may prove to be the tipping point.
Daniel Roberts is the sports business writer at Yahoo Finance. Follow him on Twitter at @readDanwrite.