Report: Grizzlies minority owners force Robert Pera into buy/sell option
Once considered a model franchise, Memphis has made a lot of news for all the wrong reasons lately — a feud between the star player and coach that lead to another Grizzlies coach with a winning record being fired, a roster with a couple to 25 NBA players but playing an antiquated system, a team uncomfortably trying to rebuild on the fly.
It all starts at the top with ownership.
Robert Pera, the controlling interest owner, is rarely present, spends a lot of time with business interests overseas, and nobody is sure how involved he is (Marc Gasol said he speaks to him regularly, although the rumors around the league are Pera is not very involved). Most of the minority owners of the team are not Pera fans.Now two minority owners —Steve Kaplan and Daniel Straus — have exercised their option to make an offer for Pera’s 30 percent and controlling interest of the team. Either Pera buys out the other two, or he gets bought out. Jon Krawczynski of the Athletic broke the story.
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....
Since diving into the Grizzlies in 2012, Pera’s net worth has skyrocketed thanks in large part to a stock price rebound for his technology company. The value of the Grizzlies has more than doubled during his time as owner as well, and other franchises like the Houston Rockets ($2.2 billion) and the Los Angeles Clippers ($2 billion) have driven up the price tag to be an NBA owner. It remains unknown whether he will look to retain the team or cash out and reap a financial windfall for his much smaller initial investment. The process could take months to come to a conclusion.
Part of this buy/sell agreement is Kaplan/Straus get to set the valuation and the buyout price, Pera has to take it or leave it.
To add drama to all of this Kapan and Pera have had a feud. Pera is a largely absentee owner who the minority owners feel has left them out of the loop. In total there are 20 owners of the Grizzlies — including Justin Timberlake — Pera has the largest share (30 percent). Kaplan wants his own team, he was part of a group trying to buy both the Hawks and then the Timberwolves.
This is going to play out for a couple of months, but the future direction of the Grizzlies on and off the court are in the balance.