Alibaba Co-Founder Scores With Purchase of NBA Club Stake

E-commerce giant Alibaba is moving to the big leagues, with word that one of its co-founders is buying into the NBA’s Brooklyn Nets.

Alibaba Vice Chairman Joe Tsai will pay $1.13 billion for 49% of the National Basketball Association (NBA) team, marking the biggest overseas purchase of a sports team to date by a person or company with links to China, Alibaba announced. Tsai himself is Canadian, but is closely associated with Alibaba, one of the world’s 10 most valuable companies with a market capitalization of about $450 billion.

Tsai himself is worth $9.1 billion, making him the world’s 250th richest man, according to the latest edition of Forbes magazine’s list of the world’s wealthiest individuals.

He is buying the stake from its current owner, Russian billionaire Mikhail Prokhorov. The purchase, which values the club at $2.3 billion, does not include the Barclays Center in Brooklyn, where the team plays. The agreement in principle gives Tsai the right to buy a controlling interest in the club in several years, according to a report on the NBA’s website citing U.S. sports network ESPN.

The sale is the latest in a growing string of similar purchases by wealthy Chinese and their companies, mostly in the soccer arena. One of the biggest previous deals saw a Chinese group buy Italian club A.C. Milan in a deal worth 740 million euros ($858 million) last year.

Since that time, Beijing has reportedly tried to put the brakes on such overseas purchases by making it difficult for would-be Chinese buyers to move their money offshore, considering such purchases of sports clubs, movie studios and other entertainment assets as frivolous.

But one analyst pointed out that due to Alibaba’s status as a U.S.-listed company, Tsai most likely has the necessary funds already offshore to make the purchase.

The Nets purchase would become the second such NBA deal with Chinese links. Last year, Chinese businessman Jiang Lizhang, associated with the company Wuhan DDMC Culture Co. Ltd., purchased 5% of the Minnesota Timberwolves for an undisclosed price. News of Tsai’s agreement also comes about two months after the NBA’s Houston Rockets were sold to casino owner Tilman Fertitta for a reported price of $2.2 billion, which included the club’s arena.

Contact reporter Yang Ge (geyang@caixin.com)