Menu
Facilities

Grizzlies' Contract With City, County Would Be Difficult To Break

The Grizzlies' lease with the city of Memphis and Shelby County to operate FedExForum is a "difficult contract to break," according to a review of the team's agreement and a subsequent '05 bond issue cited by Kyle Veazey in a front-page piece for the Memphis COMMERCIAL APPEAL. Veazey noted though the terms of the deal give "the team autonomy in running an expensive public building, it prohibits a move" out of the facility before '21, and "continues to prohibit it after that date if the team is successful at the box office, and gives the local governments options to save the team from a hypothetical move if it isn't." Until '21, the lease also "threatens court intervention should the owner want to break it." The lease contract, which runs through '29, contains a clause stating "it can't be broken in the first 17 years of its existence." Additionally, after '21, the contract "remains intact unless attendance falls below some prescribed marks." Three figures are at play, and they are an "average paid attendance" of 14,900; sales of the largest 64 suites; and club seat season-ticket sales of 2,500. If "any of those are not met" in the '19-20 season, a window would "open by which the owner could -- but not necessarily would -- break the contract." Veazey also noted departure would "come at a cost." In '21, it would be $63.2M, and it "step-ladders its way through" the '27-28 season, at which point it would only cost $8.4M to leave. If a potential owner intended to relocate the team, the person "has to let the city and county know -- both when there are 'meaningful negotiations' and when he's 'prepared to accept an offer.'" At that point, the city and county would be given as many as 3 1/2 months, "depending on when the notifications came, to buy the team on those terms." The "right of first refusal" clause could mean that the "city and county could arrange a purchase by another owner" (Memphis COMMERCIAL APPEAL, 3/25). In Memphis, David Williams wrote the lease agreement for the local government is "seriously good, considering no more leverage than the city and county had when negotiating it." Williams: "Does all this mean the Grizzlies definitely won't move before 2021? No, of course not." Oracle Founder & CEO Larry Ellison, who has expressed interest in buying the team, could "just start writing crazy checks." But the cost to "wrest away the Grizzlies" before '21 seems, if "not outright crazy, then at least well beyond the fiscally prudent" (Memphis COMMERCIAL APPEAL, 3/25).

SBJ Morning Buzzcast: March 25, 2024

NFL meeting preview; MLB's opening week ad effort and remembering Peter Angelos.

Big Get Jay Wright, March Madness is upon us and ESPN locks up CFP

On this week’s pod, our Big Get is CBS Sports college basketball analyst Jay Wright. The NCAA Championship-winning coach shares his insight with SBJ’s Austin Karp on key hoops issues and why being well dressed is an important part of his success. Also on the show, Poynter Institute senior writer Tom Jones shares who he has up and who is down in sports media. Later, SBJ’s Ben Portnoy talks the latest on ESPN’s CFP extension and who CBS, TNT Sports and ESPN need to make deep runs in the men’s and women's NCAA basketball tournaments.

SBJ I Factor: Nana-Yaw Asamoah

SBJ I Factor features an interview with AMB Sports and Entertainment Chief Commercial Office Nana-Yaw Asamoah. Asamoah, who moved over to AMBSE last year after 14 years at the NFL, talks with SBJ’s Ben Fischer about how his role model parents and older sisters pushed him to shrive, how the power of lifelong learning fuels successful people, and why AMBSE was an opportunity he could not pass up. Asamoah is 2021 SBJ Forty Under 40 honoree. SBJ I Factor is a monthly podcast offering interviews with sports executives who have been recipients of one of the magazine’s awards.

Shareable URL copied to clipboard!

https://www.sportsbusinessjournal.com/Daily/Issues/2012/03/26/Facilities/Grizzlies-Lease.aspx

Sorry, something went wrong with the copy but here is the link for you.

https://www.sportsbusinessjournal.com/Daily/Issues/2012/03/26/Facilities/Grizzlies-Lease.aspx

CLOSE