With buy-sell agreement triggered, Memphis Grizzlies majority owner Robert Pera has big decision to make
From NBA Twitter and media reports
As if the Memphis Grizzlies don’t have enough questions on the court, now comes the potential for a massive one off the court.
Basically: Could the Grizzlies wind up in different hands and possibly a different city?
This is the result of a unique agreement within the ownership group led by Robert Pera, the majority owner. He has a “buy-sell” agreement with minority owners Steve Kaplan and Daniel Straus that has been exercised by Kaplan and Straus, according to media reports.
Here’s the explanation as reported by the Commercial Appeal of Memphis:
Triggering the buy-sell agreement means all parties have a 60-90 day window to engage in good-faith negotiations, a source confirmed to The Commercial Appeal. Neither Kaplan nor Straus has made a bid, but they are officially on the clock to do so.
When Pera bought the team from Mike Heisley in October 2012, he agreed to a buy-sell arrangement. So, for example, Kaplan could offer to buy the Grizzlies at the price of $1 billion, and Pera would either have to sell his 25-percent share of the team for 25 percent of $1 billion, or he’d have to buy out Kaplan’s 14-percent share of the team for 14 percent of $1 billion.
That arrangement — which was suggested by former NBA commissioner David Stern as a safeguard in case Kaplan or Straus didn’t like being minority owners with Pera — kicks in “after five years, and every three years thereafter.”
Insiders believe Kaplan will try to gain controlling interest of the Grizzlies, although the ball will remain in Pera’s court. He could then write a fat check to buy out his partners, or receive an even fatter check from them and walk. Suppose Kaplan offers to buy the Grizzlies for $2 million, an inflated price designed to pull a power play? Would Pera dare walk away from $500 million, especially since he purchased the Grizzlies for $377 million just five years ago? To be frank, Pera doesn’t exactly need the money; various reports put his worth at north of $2 billion.