All of it adds up to the kind of uncertainty — on the…

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.

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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.
Starting Thursday, two Memphis Grizzlies minority owners can begin a process to attempt to purchase the team from controlling owner Robert Pera, sources told ESPN. Steven Kaplan and Daniel Straus each have the option to make an offer on the five-year anniversary of Pera's $377 million purchase of the team. One or both are expected to initiate the process within a 60-day window, sources said.
The unusual provision gives Kaplan and Straus each the right to name a price for the team. Pera would have to either buy one or both of his partners' shares -- depending on who bids -- or sell his own shares to them at that valuation during a subsequent 60-day window. The procedure could take months to play out and might not result in a formal bid. Straus or Kaplan could stand by and watch the other bid and then decide what to do, sources said. Or they could pass on the opportunity altogether and maintain the status quo. If Kaplan and Straus choose to bypass the buy/sell option, they will have another chance in 2020.
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