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Next step for Nets: sale application

11/25/2009 - NBA New Jersey Nets

NEW YORK -- The sale of the New Jersey Nets to Russian billionaire Mikhail Prokhorov moved a step closer to fruition with developer Bruce Ratner's victory in the New York State court of appeals, but the franchise still could face months of ownership limbo before the league's Board of Governors votes on the sale.

A league spokesman said Wednesday that the Nets still have not submitted a formal sale application, which would be the next step in the process for the ownership transfer to Prokhorov, who is seeking to purchase 80 percent of the team.

League sources indicated that those sale application papers will not be filed with the league office until the Atlantic Yards project in Brooklyn -- which will include an arena that would be the Nets' new home as soon as 2011-12 -- goes through a "master closing" in mid-December.

"That's when, financially, [Prokhorov] is committed, pending league approval," the source said.

The NBA typically requests additional information once a sale application is submitted, and the time span for approval has varied on a case-by-case basis. That means it could be only a few weeks or as long as 3½ months before the Nets' proposed sale would be put to a vote of the Board of Governors, with three-quarters of the owners needing to be in favor of the sale in order for it to be approved.

Privately, Nets officials are hoping for a vote in the first quarter of 2010. Practically, they need one by April or May before they head into summer 2010 with more than $20 million in salary cap space. Ratner would maintain operating control of the team while a sale is pending, a league source said, and Prokhorov could not influence personnel decisions prior to the Board of Governors vote.

The Nets were 0-14 heading into Wednesday night's game at Portland, and coach Lawrence Frank, team president Rod Thorn and general manager Kiki Vandeweghe are all in the final year of their contracts. The team also is on a year-to-year lease at the Meadowlands, and there have been preliminary discussions about a temporary move to Newark if the sale to Prokorov is approved.

Prokhorov spoke with other NBA owners at the Board of Governors meeting in New York last month, a meeting described as more of a "meet and greet" than a substantive discussion of the parameters of the Nets sale.

New York's top court ruled Tuesday that the state can use eminent domain to force homeowners and businesses to sell their properties for Ratner's massive development in Brooklyn. A group of tenants and owners claimed the seizure was unconstitutional.

Ratner's proposed $4.9 billion, 22-acre development includes office towers, apartments and the Nets' arena, and the sale of the NBA team is contingent upon the Brooklyn project going through its master closing by the end of the year.

Tuesday's ruling now allows Ratner to sell a mixture of taxable and tax-exempt bonds to finance construction. Once those bonds are sold, the closing can be scheduled. In a prepared statement Tuesday, Ratner said the Nets will play there in the 2011-2012 season.

The attorney for homeowners and tenants who declined to sell after the project was announced in 2003 said the fight isn't over. Matthew Brinckerhoff said his clients will oppose the Empire State Development Corporation when the urban development agency goes to court in Brooklyn in the second step of the process to take the properties.

"They have won Round 1, and we still have Round 2 to go," Brinckerhoff said. "I think everybody believes that they need to do a number of things by the end of the year, and where exactly this fits into that process I'm not sure. But the fact that they haven't yet taken the properties can't be helping them."

Information from The Associated Press was used in this report.