Maxim Shipenkov / EPA file
Russian billionaire Mikhail Prokhorov, 46, speaks at a news conference after supporters nominated him as a presidential candidate on Dec. 15 in Moscow.
Who is Mikhail Prokhorov? That’s easy. He is the most interesting man in the world!
Mikhail Dmitrievich Prokhorov, 46, is a singular figure in Russia and now the larger world. At 6 foot, 9 inches tall and thin, he is the Global Russian - very different from the short, dour New Soviet Man of decades past.
A billionaire somewhere between 18 and 25 times over, he is a partying playboy who swears he has never tasted vodka. He is called Russia's most eligible bachelor and has been seen in the company of some of the world's most beautiful women. He is quick-witted, charming, droll and affable, someone who enjoys the spotlight, craves it in fact. In a literary sense, he is more Jay Gatsby than Dr. Zhivago.
Although he is a Russian patriot, he also is a man of the world. He travels in a $45 million Gulfstream V corporate jet and can't seem to keep track of his $45 million yacht. His watch is reportedly worth $138,000.
He owns a large house in one of Moscow's new gated communities. He’s been in a French court trying to retrieve a $30 million deposit he placed on what is purported to be the world's most expensive home -- the $700 million Villa Leopolda, built for a Belgian king on the Riviera. First he liked it, then he didn’t.
He owns an NBA team – the New Jersey Nets -- and part of a billion-dollar arena being built in Brooklyn. His business partner in both is the rapper and entrepreneur Jay-Z. He’s received medals from the presidents of Russia and France and met U.S. Presidents George W. Bush and Barack Obama, the latter of whom suggested he’d like to play with Prokhorov in any pickup basketball game.
And now he’s running for president of Russia. Prokhorov was not born interesting. He arrived a simple comrade in the Soviet Union on May 3, 1965. His father was a member of the Soviet sports committee and his mother a scientist.
New Jersey Nets owner and billionaire Mikhail Prokhorov plans to challenge Vladimir Putin for the Russian presidency. NBC's Stephanie Gosk reports.
While privileged, his upbringing was nothing special for the day. His parents sent him to English Special School No. 21 in Moscow, where he received a gold medal and was recommended by the local Komsomol (Young Communist League) for college admission.
But first, he did what other Soviet youths were required to do. From 1983 to 1985 -- at the height of tensions between the U.S. and Soviet Union -- he served in the Soviet military. He also joined the Communist Party, though it doesn't appear he was ever much of a Communist. While in college, he sold stone-washed jeans -- his first capitalist venture-- under the brand name, "Yourself Jeans."
But all that presents only an inkling of who he is. Let's start with the money.
Prokhorov went into banking after graduating from the Moscow Financial Institute with a degree in international economics. From 1989 to 1992, he was head of the International Bank for Economic Cooperation’s Management Board.
Courtesy of Mikhail Prokhorov
Mikhail Prokhorov, fourth from right, and other members of the Norilsk management team visit a mine in 2003.
Then, in 1993, during the largely unregulated and highly controversial privatization of former state-controlled industries, Prokhorov and a partner, Vladimir Potanin, saw an opportunity. They engineered the purchase of Norilsk Nickel mines in Siberia through the then-small Uneximbank. He was 28 at the time, Potanin slightly older.
It was a bargain, but hardly an instant bonanza. Workers hadn’t been paid for six months and the arctic terrain was polluted beyond most Westerners’ comprehension, according to published reports. Early on, Prokhorov was Mr. Inside at Norilsk, working on pollution control and financing, among other things, and negotiating with Soviet-spawned labor unions on compensation.
Prokhorov doesn’t apologize for buying up dilapidated Soviet era properties for a song. He followed the rules, he will tell you. Some oligarchs succeeded more than others. He succeeded the most. He is credited with turning the inefficient Soviet nickel mines into one of the world's largest and most profitable natural resource corporations. And over the past decade he expanded his holdings to include palladium, gold and bauxite, from which aluminum is made.
(Not everything at Norilsk is yet up to Western standards. In spite of large-scale spending on pollution control technology -- about $100 million, according to the New York Times -- the company is still one of the world's worst polluters, emitting nearly 2 million tons of sulfur dioxide annually, more than the entire nation of France.)
Detained, then honored
Prokhorov became more than just an intriguing industrialist in January 2007, when he was detained for allegedly arranging prostitutes for guests at his annual two-week long Russian Christmas party at the French Alps resort of Courchevel. He was released without charges after spending four days in jail, and none of the women was charged. He later received an apology from French authorities, apparently arranged by Russian Prime Minister Vladimir Putin. By 2011, he had been awarded the French Legion of Honor for arranging cultural exchanges.
Reports on the affair by French and Russian publications offered jaw-dropping glimpses of Prokhorov’s gilded lifestyle. Paris Match reported that when the women were detained and their luggage searched, lucrative gifts were discovered, valued at between 20,000 and 300,000 euros (approximately $25,800 to $387,000 at the exchange rate at the time). Komsomolskaya Pravda reported that Prokhorov engaged a "face patrol" at his favorite Courchevel haunt, "Les Caves," to filter out all but the most beautiful people.
He shrugged off his four days in French jail, noting that he had been a Soviet conscript.
New Jersey Nets owner and billionaire Mikhail Prokhorov plans to challenge Vladimir Putin for the Russian presidency. NBC's Stephanie Gosk reports.
Then there was the time he soiled one of the Soviet Union's -- and Russia's -- most historic icons: the Aurora, the Russian cruiser that fired the cannon blast that launched the Russian Revolution in 1918. Prokhorov rented the vessel permanently moored in St Petersburg in June 2009 for an evening of merrymaking to celebrate the first anniversary of his new magazine, the Russian Pioneer. The party became so rowdy that several millionaires jumped or fell into the Neva River and had to be fished out by authorities. Museum artifacts also were reportedly damaged.
Prokhorov’s reaction to the resulting controversy? He offered to buy the ship and restore it.
He is not beyond anger, though. When his sister was harassed and insulted by local youths at a Prokhorov Foundation event in 2009, he threatened business rivals who he said had paid them.
“Since I was a child, I had a rule -- to punish crudity and disrespect towards women,” he wrote on his blog, according to a translation by the ReadRussia blog. “I see one simple and effective way to handle it: If the two gentlemen who financed this PR campaign do not apologize to my sister in the next two weeks, I will do what every man should: I will personally beat the @!$%# out of them."
Asked later if he was serious, he responded, "Do you have any doubts? Those responsible made their apologies to Irina."
All of this made him famous, at least in Moscow. He was satirized on Russian television for his lavish lifestyle and his reputation as "Russia’s most eligible bachelor."
It also caused him problems with the prudish Kremlin. He was pressured to sell his 25 percent stake in Norilsk to another oligarch, Oleg Derispaska, the owner of RusAl, the world’s biggest aluminum manufacturer. Propitiously, the deal was completed just before the 2008 economic downturn, resulting in a bonanza for Prokhorov. He received nearly $5 billion in cash as well as stock in Polyus Gold and stock and debt in RusAl, now the main sources of his net worth.
At that point, there was no stopping him. At a time when no one had cold hard cash, he was flush. He shrewdly diversified.
By 2009, he had controlling interests in metals companies (Polyus Gold, UC RusAl), banks (Renaissance Capital, MFK Bank), media outlets (RBC, Snob and Russian Pioneer magazines, FIT television channel, F5 web portal/newspaper), insurance (Soglassye), real estate (OPIN Investment and Development Group), electricity production (Quadra) and LED technology (Optogan).
He also established a personal investment vehicle, ONEXIM, to control his various assets.
Entering the international arena
Then, in 2009, Prokhorov stepped onto the international stage.
The New Jersey Nets were a mess, stripped of talent and suffering through a 12-70 season under owner Bruce Ratner, who had suffered enormous losses as he tried to move the team from northern New Jersey to a $6.4 billion real estate development in Brooklyn called Atlantic Yards. But five years after the 22-acre project had been announced, lawsuit after lawsuit had caused delay after delay. To make things worse, Ratner faced a Dec. 31 deadline to sell $500 million in tax-exempt bonds to build the Nets’ arena, to be called Barclays Center. Without them the project was going to die not with a bang but a whimper. And 2009 was not an auspicious time to get financing for anything, let alone a beleaguered basketball arena.
Larry Busacca / Courtesy of Mikhail Prokhorov
Mikhail Prokhorov and Jay-Z.
Enter Prokhorov, who had played basketball and previously owned Euroleague power CSKA Moscow. He had been interested in buying the Knicks, but the Dolan family wasn’t selling. (Later after buying the Nets, he erected an 18-story billboard featuring him and business partner Jay-Z outside James Dolan’s offices at Madison Square Garden.) An investment banker suggested an alternative, mentioning Ratner and his troubles.
A deal was stuck over dinner in Moscow, and it was every bit as shrewd as any of Prokhorov’s Russian maneuvers. According to ONEXIM and Nets officials, he laid down a little more than $200 million in cash and got 80 percent of the team; 45 percent of the billion dollar arena, and an option to purchase up to 20 percent of the overall Atlantic Yards project at a bargain basement price. In exchange, he agreed to assume 80 percent of the team’s astronomical debt load -- more than $221 million -- and pay up to $60 million to cover losses while the team was stuck in New Jersey. He also paid a $4 million buyout fee so the team could move out of its isolated and decrepit digs near the Meadowlands and into Newark’s gleaming new Prudential Center. Moreover, when bond rating agencies wouldn’t give the arena bonds an investment grade rating, Prokhorov agreed to sink another $76 million into the project. (He wasn’t doing it for charitable reasons. If his partners can’t pay it back at 11 percent interest per annum, he gets 80 percent of the arena.)
Within weeks, a key eminent domain case was finally dismissed, the bonds sold and his investment was well on its way to his goal: a billion dollar valuation within five years.
When asked by a reporter at a May 2010 press conference in New York if his purchase was part of a larger effort by Russian oligarchs to buy up Western sports teams, he smiled and drolly intoned, “Please tell America, I come in peace.”
After he videotaped a message in his sister’s kitchen promising a championship in as little as one year and no longer than five, his reception from long-suffering fans long-suffering bordered on obeisance. At his first game as the team owner in October 2010, a steady stream of them approached the owner’s suite and thanked him profusely for buying the team. (Inside, bottles of Lafitte Rothschild 1982, valued at about $5,000 a pop, were scattered about for his guests.)
One night a couple of fans found themselves on a train from New York to Newark with their favorite team’s owner and his entourage. The reason? When it looked like traffic would prevent his caravan of limos from making the game, he had jumped on New Jersey Transit. His spokesman distributed a video of the trip showing one of the world’s richest men standing in the aisle of a New Jersey commuter train, joking in Russian with his friends.
He agreed to a “60 Minutes” profile that showed him in a trendy Moscow nightclub with scantily clad women half his age, posing with an AK-7, jet-skiing in the Maldives, working on his kick-boxing skills and claiming he really didn’t know where his yacht was -- it was docked in the south of France and available for lease for $325,000 a week. It was masterful image-making. Later, there was an only slightly tamer profile in the New York Times Sunday Magazine, headlined “An Oligarch of Our Own” The cover featured him legs spread slightly apart, looking ahead and holding out two basketballs as if astride the NBA world.
Suddenly, the guy who dealt with gritty environmental problems at a mine north of the Arctic Circle was not just an NBA owner, but a bona fide international celebrity. Everyone wanted to meet him.
Despite his fondness for the limelight, Prokhorov remained private in ways. He might spend nearly $18,000 on lunch at a Midtown restaurant, but it was the restaurant owner who bragged about it to the New York Post, not Prokhorov. He might spend $30 million on a vacation with friends in the south of France, as French media reported, but he wouldn't confirm it or boast about it. Of course, he didn't deny it either. He understands mystique.
Before entering politics, he refused to identify his favorite author, his favorite fictional character, even his favorite color. He said he didn't want the media or public to be aware of his "cultural biases." He did identify a favorite quote, from a French author: "Good advice is something a man gives when he is too old to set a bad example.
He still hasn’t revealed his favorite color but he did disclose that he is an atheist and that his favorite book is Aleksandr Solzhenitsyn’s “One Day in the Life of Ivan Denisovich,” the magisterial work on life in Stalinist labor camps.
Prokhorov’s entry into Russian politics was similarly contradictory. A week after denying he had any interest in politics, he agreed this spring to head a small right-wing political party called “Right Cause.” it was seen as part of the Kremlin’s “managed democracy,” that is a party created to give the country’s leaders “friendly opposition” from the right.
He even met with Russian President Dmitry Medvedev at the latter’s residence, where Medvedev praised him as “quite revolutionary” and arranged a photo op in which the two were seated across a table -- better than a side by side standing shot, since Prokhorov is a foot and a half taller than Medvedev.
Everything seemed to be going swimmingly as summer progressed. Prokhorov poured money into the party, giving it publicity. He resigned as the head of his investment vehicle, ONEXIM, to devote all his time to politics.
But in fall, something changed. Vladislav Surkov, who as head of presidential administration is in charge of the Kremlin’s “managed democracy,” began calling on the phone, Prokhorov later said, demanding changes in party personnel, in the party’s list of candidates.
Pushed by the Kremlin, the party finally ousted Prokhorov as leader in September.
Prokhorov responded by holding a news conference where he blistered Sukrov as the Kremlin’s “puppet master,” although he pointedly did not criticize either the president or prime minister. Then he dropped out of sight.
In apparent retaliation, Medvedev removed him from the Russian modernization commission and, ominously, Prokhorov’s application to have Polyus Gold listed on the London Stock Exchange was inexplicably delayed.
But as resentment mounted after Putin’s announcement of his candidacy for president on Sept. 24, Prokhorov got back in, declaring himself an independent candidate for the office.
Some critics see a Machiavellian hand behind Prokhorov’s political rebound, suggesting he is a “stooge” set up by the Kremlin to draw votes away from other opposition parties. He and those around him deny it.
In the unlikely event he is elected president in March -- polls show him with numbers in the low single digits -- there are some hints of what a Prokhorov presidency would look like:
By all accounts, he is calm in even the worst crisis and demands from his aides that they have Plans A, B, C, etc., at the ready.
He is not a hands-on manager, preferring to trust a cadre of loyalists in their 30s and 40s to run his companies. But if he doesn’t like what he sees, he is quick to let someone go. The day he took over the Nets, he summarily dismissed the coach.
He is not a technocrat, having only lately begun using a cell phone. Although he claims he does not use a personal computer (too much information) and writes out his thoughts on yellow legal pads, his staff maintains both a personal website and a personal blog, regularly posting how he feels on life and business. He has recently branched out into Facebook and Twitter, but only because of politics. He told reporters in 2010, “I know of this iPad. I hope we never meet.”
On the other hand, no NBA team makes more use of the iPad, even drawing up plays on it. And he’s not afraid to invest in new technologies. His latest venture is a $150 million investment in an electric car called the “Yo,” which will go on sale later this year.
Politically, he is described as right of center, but liberal, somewhat like another basketball playing pol, Bill Bradley. He was friendly with Yelena Bonner, the late human rights campaigner and widow of Andrei Sakharov. He financed a memorial to Stalinist repression deep inside Russia.
He has said he won’t criticize Putin, but has also said the system will collapse in five years unless it’s dramatically reformed. He calls himself a serious candidate and has vowed to give up partying if elected. He told one interviewer he may even marry if Russia feels it needs a first lady. Most recently, he has been seen in the company of Ksenia Sobchak, described as the Russian version of Paris Hilton, having posed for Maxim magazine.
Yet his quest for the presidency seems quixotic at best, cynical at worst. He still believes in the power of money. Shut out of state television, he tried to buy TV Rain, an independent satellite and online television operation. When that failed, he tried to acquire Kommersant, the Russian equivalent of the Wall Street Journal. No sale there either.
So he is resorting to using the social media. He has a YouTube channel where you can watch “This Week in Prokhorov” or his latest commercial, where dressed casually in a letter jacket and white shirt, he tells voters, “I want to work for you.”
He also makes clear that he wants to reform the system, not overthrow it. After all, few if any, have benefited more.
“Revolution in Russia always resulted in loss of life and reduced living standards,” he wrote recently on his blog.
He also indicated in other recent entries that he believes he is the right man to lead his country through what he sees as a pivotal period.
“I believe that the next president must find in himself the will and courage,” he wrote. “And the people must clearly explain their vision and their actions. If he is honest, he will understand.”
“… As president of the various structures -- in business, and not just business -- I have often resorted to the unpopular measures. Yes, it's difficult. Yes, sometimes you come across a lack of understanding and acceptance even in the immediate vicinity. Yes, sometimes you're risking much …on a grand scale, sometimes everything. But when you can clearly see the situation, you see that there is no alternative but to do this.”
Robert Windrem is a senior investigative producer for NBC News and a Nets season ticket holder.