Forest City agrees to sell Nets, Barclays Center stakes to Prokhorov: report

Forest City Enterprises is finally set to offload its ownership stake in the NBA’s Brooklyn Nets and the team’s arena, the Barclays Center in Downtown Brooklyn, to Nets majority owner Mikhail Prokhorov.

The two sides have reached an agreement that will give the Russian billionaire sole ownership of both the team and the arena. The NBA is reviewing the deal per league guidelines, though the terms were not disclosed.

Prokhorov’s Onexim Group currently owns 80 percent of the Nets and 45 percent of the Barclays Center, according to Bloomberg, with Forest City Enterprises owning the remaining stakes in both. A transaction between the two sides seeing Prokhorov buy out Forest City has been mooted since September.

The Cleveland-based real estate investment firm has looked to divest its ownership interests in the team and arena for some time as part of an increased focus on its core real estate business. Forest City is set to convert into a real estate investment trust on Jan. 1.

Forest City originally had until July 12 to divest its stake in the Nets, or the firm would have had to pay Prokhorov $31 million as part of an agreement that saw the billionaire cover the developer’s capital calls for the team. Failure to pay the penalty would have seen Forest City’s share in the Nets diluted from 20 percent to 8 percent.

But the firm twice bought more time from Prokhorov, reaching a deal to extend the payment’s due date until Aug. 12 and again until Sept. 8, when Forest City announced that it had made a $26.8 million payment to preserve its ownership interest in the team. [Bloomberg] – Rey Mashayekhi