The reason? Well, just a year ago, the team plus the arena were valued at $1.7 billion.
How do I know? Well, when Forest City Realty Trust sold its 20% interest in the Nets and 55% in the Barclays Center operating company to Mikhail Prokhorov's Onexim Sports & Entertainment, the announcement said the team was valued at $875 million and the arena at $825 million, for a total of $1.7 billion, as shown in the screenshot below.
Sure, it's possible that Forest City, constrained by a deadline to become a real estate investment trust and a league that wanted one owner for the team and arena, did not get as much for those assets as it had hoped.
But optimistic estimates--considered a stretch--only reached $1.9 billion.
The team--and the arena
Turns out, Forbes doesn't really think the Nets are worth $1.8 billion now either, since their rather flexible methodology links team and arena--and last year estimated the pair $1.7 at billion. The arena is said to contribute $551 million in value.
(Why the overall increase? Now, among other things, the team has an $8 million a year deal for uniform advertising!)
In a Twitter exchange with Forbes writer Kurt Badenhausen, I expressed my skepticism, pointing to the 2016 valuation set by the dual sale.
He responded that Forbes's value includes the team and the arena.
But it's tough to attribute the arena value to the Nets. When I asked about the Islanders, he responded, "We include the economics of the arena that go back to the NBA team. Isles don't get any non-hockey revs."
(I'm not sure about that. The Nets don't get any non-Nets revenues, but the Nets owners do, at least now, because they're the same. But two years ago, the arena was already supposed to contribute more than $500 million to the Nets value, and it was not controlled by Prokhorov. So Forest City Ratner, a minority owner of the Nets but a majority owner of the arena operating company, was getting benefit that didn't "go back to the NBA team" either.)
"Ok, but then shouldn't you then count % of the arena value attributable to Nets rather than full value?" I responded.
"In cases where owner controls economics to arena/team, we attribute to team value-i.e. Bulls get 50% of United Center," he responded.
Maybe that's why Forbes attributed $551 million in venue value to that overall team valuation, rather than the full $875 million.
But that still doesn't make sense to me, since, if the Nets are worth $1.8 billion for the team plus their share of the arena, what about the value of the rest of the arena? Wouldn't that additional valuation bring the combo of the team plus the various arena beneficiaries well above $1.8 billion? And what if ownership of the team and the arena operating company were split?
Maybe we'll learn more about the team's value if and when Prokhorov brings in minority investors, as is expected.
Here is the archived Forbes coverage: 2013, 2014, 2015, 2016. I've pasted in screenshots below. (The last time I wrote about the Forbes valuations, two years ago, I also had doubts.)