Robert Pera Rumors
If no deal is reached in those 90 days, the minority owners have another 60 to name a price for the team — and bid on Pera’s stake at that price, according to several sources familiar with the process. (The minority owners could also punt, and stick with the status quo.) That bid would be essentially binding. Pera would have two choices: sell at that price, or buy the minority owner’s stake at that same valuation.
The roster is in flux, half of the foursome that laid the groundwork for the team’s success is gone and Robert Pera’s future as lead owner of the franchise is in question. A buy-sell provision in the ownership agreement between Pera and minority owners Steve Kaplan and Daniel Straus was exercised last week, sources told The Athletic. Both minority owners had the right to invoke the clause starting in late October, which allows one or both of them to set a new valuation for the franchise that sold for $377 million in 2012. Pera, who is being represented by CAA in the process, will have to decide whether to buy out Kaplan and/or Straus to keep control of the team or sell his shares at the set price and remove himself from the ownership group.
The clause in the agreement, which was first reported by ESPN, was born of Pera’s tenuous acquisition of the team from previous owner Michael Heisley in 2012. During that process, the value of Pera’s technology company, Ubiquiti Networks, took a sharp plunge, forcing him to bring on Kaplan and Straus as partners with 13.5 percent equity and give a number of owners with Memphis ties, including Peyton Manning and Justin Timberlake, smaller pieces of the pie to be able to close the deal.
The absentee approach has led to tension between Pera and his minority owners, sources said. Kaplan tried to extricate himself from the situation a year and a half ago when he entered into negotiations with Timberwolves owner Glen Taylor to join the team as a minority partner with the intent on one day purchasing a majority stake in the franchise. But that agreement fell through, the second time Kaplan has missed out on a chance to become the lead owner of an NBA franchise. He was outbid by Tony Ressler for the Atlanta Hawks in 2015.
All of it adds up to the kind of uncertainty — on the court and off — that can be difficult for a franchise to overcome, especially one in a smaller market like Memphis. Seattle has been getting more aggressive in trying to address its arena situation to get a team to return to the city vacated when the SuperSonics left for Oklahoma City. But the Grizzlies lease at the FedEx Forum has strong protections through 2021 and the Commercial-Appeal reported that the subset of local owners in the group would be given the chance to buy the team if Pera, or any other owner, were to try to move the Grizzlies before 2027.
Jon Krawczynski: A buy-sell clause in the Grizzlies ownership agreement has been exercised, sources tell The Athletic. Owner Robert Pera now has a decision to make. Story posting soon.