Earlier this week, Forbes reported that Joe Tsai had closed his purchase of a 49% stake in the Brooklyn Nets from Mikhail Prokhorov. Shortly after Forbes published the article, the Nets released a statement indicating that the sale was not yet final. Even though the deal is not yet done, it’s clearly close. It’s worth exploring the implications of the deal for the team and its fans.

News of the deal first broke in October 2017. Tsai will pay $1.13 billion for his stake in the team. This values the Nets franchise at $2.3 billion, the highest value of any team in the NBA. According to the terms of the deal, Tsai will have no operational role with the team. That said, he’ll have the option to buy the controlling stake from Prokhorov in 2021.

Joe Tsai has an estimated net worth exceeding $10 billion. He accumulated his wealth over a long and prolific career. A dual-citizen of Canada and Taiwan, he attended prep school in New Jersey before earning his Bachelor’s degree and a JD from Yale University. From there, he worked several jobs in finance and eventually landed in Hong Kong. He met Jack Ma shortly after moving to Hong Kong. Ma had already founded Alibaba.com, and was operating it out of his apartment. Tsai joined Ma at Alibaba, and together they grew it into the E-commerce giant that it is today.

The Nets will not be Tsai’s first foray into sports team ownership. Last summer, Tsai purchased the National Lacrosse League’s San Diego Seals for $5 million. Although the Seals’ price tag was considerably smaller than the Nets’, the purchase shows Tsai’s passionate about sports and not just interested in the Nets as a diversification of his investment portfolio.

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Joe Tsai's Purchase of Brooklyn Nets Nearing Close
Since purchasing the Nets in 2010, Mikhail Prokhorov has not delivered the success he promised | Photo by A.Savin/Wikimedia Commons

Since purchasing the team in 2010, Prokhorov has failed to keep his promise to turn the team around. After claiming he’d get married if the Nets didn’t win a championship within five years of his purchase of the team, he reneged when the team failed. Nets management made serious efforts in those five years to build a powerhouse team, amassing the highest single-season payroll in league history. Still searching for success, they broke up the team and attempted to rebuild in recent years with subpar results.

Given Tsai’s deft business instincts, it’s tough not to wonder what he sees in the Nets. Fans have lost patience: Nets games on the local YES network are the lowest rated in the league, and games at the Barclays Center have the fifth lowest capacity of any stadium in the NBA, according to CBS New York. The Barclays Center is a beautiful stadium in the heart of Brooklyn, but the terms of Tsai’s purchase dictate that Prokhorov will maintain ownership of the stadium itself. Perhaps he aims to buy the rest of Prokhorov’s stake in 2021 and take an active role in team operations. If that’s the case, then why is he willing to pay such a pretty penny for his stake now? The final agreement should shed some light on Tsai’s ambitions.