Joseph Tsai: now the proud owner of the Brooklyn Nets
Paul Allen co-founded Microsoft with Bill Gates in 1975. Gates went on to become the world’s richest man. Allen wasn’t quite as wealthy but after he left Microsoft in 1982, he had more than enough cash for his many different interests.
One of them was being a sports owner and in 1988 his trophy buy was the Portland Trailblazers, a basketball team in the NBA.
Fast forward to the present day and Alibaba’s executive vice chairman Joseph Tsai shows signs of following in Allen’s footsteps. Since helping Alibaba to grow into China’s biggest e-commerce brand, Tsai has invested in a string of American sports teams. And last month the 55 year-old also joined the highly exclusive club of NBA owners too.
Prior to Tsai the only foreign owner in the NBA’s 30 basketball franchises was Mikhail Prokhorov. It was the Russian billionaire who sold a 49% stake in the Brooklyn Nets to Tsai for $1 billion in April last year. Late last month the team announced that Tsai had agreed to buy the remaining stake, taking full control.
Tsai is paying about $2.35 billion for the Nets in a sale that the Wall Street Journal said would mark a new record for a professional sports franchise in the United States. In a separate deal, Tsai will also pay $1 billion for the Nets’ home stadium in New York.
The deal still needs approval from the NBA’s board of governors but that looks like a formality, as the association’s officials gave the green light for the Taiwan-born Tsai’s first investment in the Nets last year.
A statement from the Nets said the transaction should be finalised by the end of September, which means that Tsai should have full control of the team by the time the Nets travel to China to play two exhibition games against the Los Angeles Lakers.
Alibaba was founded in 1999 by Jack Ma and 17 “lakeside partners” (an interesting coincidence: Paul Allen and Bill Gates first met at the Lakeside Programmes Group, although the reference in the Alibaba context draws from the revered West Lake in Hangzhou, where the tech company is based).
Tsai was not one of Alibaba’s original founding team. But one of the original 18 – rather unfortunately for him as things turned out – dropped out a month after the group was founded.
But having got to know Ma and his co-workers well, Tsai took a gamble on the fledgling e-commerce startup: he gave up his lucrative position at a private equity firm to join the founders.
It is something of an understatement to say that taking the plunge has paid off: Forbes estimates that Tsai is now worth at least $10 billion.
That’s probably just as well: the Nets have spent heavily to bring in high-impact players since last year – such as Kevin Durant, who arrived from the Golden State Warriors on $164 million four-year contract – and fans are hopeful of more high-profile signings to come.
Tsai has made investments in other American sports teams as well: the WNBA’s New York Liberty, the MLS soccer side Los Angeles FC, and the San Diego Seals, a franchise in the new lacrosse league (Tsai was a lacrosse player when he studied at Yale). The combined properties represent roughly a third of his net worth, analysts think, a reflection, perhaps, of his passion for US sports.
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