Memphis Grizzlies owner Robert Pera may not be the organization’s owner for much longer. Grizzlies minority owners Steve Kaplan and Daniel Straus have activated a buy/sell clause in their ownership agreement, according to a report from The Athletic, that would allow them to set a new valuation of the franchise.
That new valuation would cause Pera to sell his ownership stake at a price Kaplan and Straus set, according to the report.
Pera now will have to decide whether he wants to buy out minority owner(s) who set a new valuation or sell his shares and leave Grizzlies— Jon Krawczynski (@JonKrawczynski) November 30, 2017
Pera has owned the Grizzlies since 2012 when he bought the team from previous owner Michael Heisley. Because Pera’s technology company took a big hit during the process, he was forced to bring on Straus and Kaplan as partners at 13.5 percent equity each and search for other lesser minority owners to purchase the rest of the franchise with the ownership group.
According to the report, Straus and Kaplan had the ability to exercise the option as early as October but decided to do it last week.
What exactly does this mean for Pera?
This buy/sell clause could effectively remove Pera from the ownership group. His only two choices are to allow Kaplan and Straus to set a new valuation for the Grizzlies and sell his ownership stake or buy out Kaplan and Straus in order to keep the team. His decision heavily rides on his own financial stability right now.
Pera owns Ubiquiti Networks — a technology company based in New York. If the company’s stock portfolio is any indication of Pera’s financial standing, he might be in good shape. Since 2012, according to Yahoo! Finance data, the company’s stock has risen from as low as $11.75 to $66.83 today.
But that doesn’t necessarily mean Pera is prepared to buy out his co-owners. We still don’t know what they’ll determine the organization’s valuation is and how much Pera will have to pay.
Does this have anything to do with the David Fizdale firing?
We’re not totally sure — it’s unclear how much involvement Pera had in the decision to fire Fizdale. But the timing here certainly is odd. There’s another caveat here that brings things closer to Fizdale.
According to the report, Pera and Marc Gasol know each other well. So well, in fact, that Gasol continuously asks him to show up at games more. “Gasol has always said he has a close relationship with Pera and speaks to him regularly,” the report said.
Gasol obviously had a problem with Fizdale and the way he’d been coaching. The problems didn’t just stem from this season, either.
Word out of Memphis this past summer already was Marc Gasol and Coach Fizdale were on very poor terms after some confrontations in practice. Seemed inevitable they'd have to pick between one or the other eventually. This isn't some recent thing.— Jonathan Givony (@DraftExpress) November 27, 2017
Since buying the team in 2012, the Grizzlies have run through head coaches. Both Lionel Hollins and Dave Joerger had successful tenures despite being fired and, though it wasn’t as successful, Fizdale made the playoffs with a shorthanded roster.
According to the report, Pera’s relationship with the team and its coaches has almost been nonexistent. Specifically with Dave Joerger, who Pera was apparently ready to fire just a few games into his tenure.
[Joerger’s] relationship with Pera was volatile from the start, with sources telling The Athletic that the reclusive owner considered firing him just three games into his first season.
Joerger eventually had enough and forced his exit to Sacramento because he didn’t want to coach for Pera. It’s within reason to think that Straus and Kaplan activated this clause in an effort to stabilize the team in the long-term after their 7-13 start.
Despite their success, the Grizzlies have been poorly managed
The coaches they’ve been through are just the tip of the iceberg. According to the report, the Grizzlies signed Chandler Parsons in 2016 without even putting him through a physical. That is probably the most irresponsible thing you could do as a franchise. They’re without a first-round draft pick for this season and are heavily invested in older players who probably won’t move the needle much for them.
The Grizzlies were once the poster child for how the NBA wanted to see its franchises built. They drafted and developed Mike Conley Jr. and Gasol, traded for Zach Randolph and Tony Allen in free agency and created a cult favorite team among NBA fans. But that time is done now.
It’s time to start over in Memphis, and that initiative has to start from the top. If that means getting Pera out of the picture then so be it.