A buy-sell provision in the ownership agreement between Grizzlies Controlling Owner Robert Pera and co-Exec Chair Steve Kaplan and Vice Chair Daniel Straus "was exercised last week," according to sources cited by Jon Krawczynski of THE ATHLETIC. Both Kaplan and Straus 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 $377M in '12. Pera, who is being repped 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 was "born of Pera's tenuous acquisition of the team" from previous Owner Michael Heisley in '12. 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 a 13.5% 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." Pera has been a "shadowy figure" with the Grizzlies. He is "almost never in Memphis to attend games, a lack of visibility that has contributed to questions about his level of involvement with the franchise." Sources said that the absentee approach has "led to tension between Pera and his minority owners." Kaplan "tried to extricate himself from the situation a year and a half ago when he entered into negotiations" with T'Wolves Owner Glen Taylor to "join the team as a minority partner." It "remains unknown" whether Pera will "look to retain the team or cash out and reap a financial windfall for his much small initial investment" (THEATHLETIC.com, 11/30).
ON THE CLOCK: In Memphis, Ronald Tillery cites a source as saying that "triggering the buy-sell agreement means all parties have a 60-90 day window to engage in good-faith negotiations." Neither Kaplan nor Straus have "made a bid, but they are officially on the clock to do so." The buy-sell arrangement "kicks in 'after five years, and every three years thereafter" (Memphis COMMERCIAL APPEAL, 12/1).
