Michael Heisley bought the team in 2000 for $160 million. In January of this year, Forbes estimated the Memphis Grizzlies to be worth $269 million.
Monday the sale of the Grizzlies from Heisley to Robert Pera became official — at a price of $377 million, according to the Commercial Appeal.
For those of you scoring at home, that is a $217 million profit in 12 years, and if you adjust for inflation (using CPI) it comes to $162 million.
Just remember that next time an owner cries poverty about the tax line or how they are losing money.
But this is good news for the Grizzlies — Pera and his minority owners are now in charge of the franchise. The NBA Board of Governors (made up of the owners) approved the sale last week.
Pera has recruited a wide range of investors to join his bid, including local businessmen such as AutoZone founder J.R. “Pitt” Hyde, investor Staley Cates, financier Duncan Williams, investor Edward Dobbs and cell phone tower developer Billy Orgel. Performer Justin Timberlake, who has Shelby County roots; Memphis native Ashley Manning and her husband Peyton Manning, the NFL and former University of Tennessee quarterback; Tiger basketball legends Penny Hardaway and Elliot Perry; and former Congressman Harold Ford Jr. are also part of Pera’s ownership group.
Pera also agreed to a three-pronged proposal of safeguards that essentially binds the team in Memphis for another 15 years.
It’s impossible to tell how Pera’s ownership will impact what is a good team on the court and the direction they chart for the future. But Heisley was not considered a good owner for most of his term and came into a winning team and fortune on the court the past couple of years. It will be interesting to see what direction Pera will chart from here, and how he will influence front office moves.
Bottom line, an energetic new owner who is locked in to staying in Memphis is good for the city and good for the NBA.
Robert Pera, you got yourself an NBA team. At age 34. Thanks for making the rest of us feel like slackers.
At its Board of Governor’s meetings this week — where the owners get together and decide all things NBA — they formally approved the sale of the Memphis Grizzlies to billionaire Robert Pera.
“We are delighted that the NBA’s Board of Governors has approved Robert Pera’s purchase of the Grizzlies,” said NBA Commissioner David Stern in a released statement. “Robert will no doubt bring great energy and passion to the franchise. He has assembled an ownership group with very strong local ties, and we anticipate that their commitment to the Memphis area will greatly benefit both the team and the community.”
While the sale price is not public it is believed to be in the $350 million range. When the stock price for Pera’s company Ubiquiti Networks took a hit in recent months, some thought threatening the sale, Pera brought in a number of minority owners included some from the Memphis business community as well as celebrities such as Justin Timberlake and Peyton Manning and his wife (she and Timberlake are Memphis natives). Also in is former NBA player Penny Hardaway.
Outgoing owner Michael Heisley is not exactly going to be missed by the fan base. He had a reputation for being stingy and making unpopular decisions with players. However, in the last few years the Grizzlies have been built into a solid team.
That is not a team that is moving — Pera reportedly has no plans to move the franchise to another city. It would be painful to do so anyway, the Grizzlies have a rock-solid lease with the FedEx Forum through 2021. At least nine more seasons.
But we don’t know what other changes Pera may want to make in the organization.
Pera is a former Apple engineer who founded wireless company Ubiquiti Networks, which is where he made his money primarily selling in developing countries. According to a Forbes Magazine profile he is an avid basketball fan who lives a very no frills life — leases his car, lives in a one-bedroom apartment, the kind of guy who doesn’t check a bag when he travels.
Owning an NBA team is a big frill.
Justin Timberlake has lived a charmed life, and I say that in spite of him having been in a boy band. I say that by looking at the list of women he has dated (Jessica Biel, Scarlett Johansson, Cameron Diaz, Alyssa Milano, all the way back to Britney Spears. And that’s the partial list.)
Timberlake is also a basketball fan — he says a basketball junkie — who is a regular at Lakers games.
Now, how about some Grizzlies games?
Timberlake, a Memphis native, may be part of the new Grizzlies ownership group of Silicon Valley Robert Pera, reports Marc Stein at ESPN.
Sources told ESPN.com that Timberlake and Pera have quickly struck up a friendship, with one source adding that the singer/actor is making “a meaningful investment into the team” and “plans to be active” with the Grizzlies. The league office, sources said, has been made aware of Timberlake’s proposed involvement and is already well acquainted with him after inviting the self-proclaimed basketball junkie to participate in various celebrity games at All-Star Weekend.
Pera is bringing in a few other partners, including a local Memphis group that will own up to a third of the team. That is smart and helps squelch the “he just wants to move the team” talk. Well, that and the rock-solid lease the team has.
The league is still going through the due process on the $350 million sale of the Grizzlies from Michael Heisley to Pera. While reports have circulated that struggles of Pera’s company Ubiquiti Networks have threatened the sale, everyone close to the talks says that is not the case. You can bet the league is considering that, but so far the sale is on track. Bringing in other investors can help with that money issue, too.
Plus, a little star power never hurts.
Over the past few months Robert Pera — the 34-year-old Silocone Valley entrepreneur trying to purchase the Memphis Grizzlies — has stayed quiet while the world has buzzed around him.
the 34-year-old billionaire hasn’t spoken much at all about his efforts to buy the Grizzles, something tat David Stern likely suggested. He also hasn’t spoken about the company he founded, Ubiquiti Networks Inc., seeing its stock price fall by more than half since the spring.
Finally he decided to explain what was going on to the San Jose Business Journal (via the Commercial Appeal), except he still really didn’t say anything interesting about the Grizzlies at all. (Quote via the Commercial Appeal.)
“When I was growing up, if I could do anything in the world, I wanted to be a professional athlete,” Pera, 34, said in the interview with reporter Diana Samuels. “For a long time my dream was always to be in a position to maybe be involved in an NBA team. I played as a kid, all growing up and in high school, and I’ve been a big fan of the NBA, so I have season tickets to the (Golden State) Warriors. I played fantasy league a couple years, and I play a few times a week.”
There you go. That’s your insight. (He’s a little more insightful on Ubiquiti, but just a little.)
Pera is currently going through the NBA’s background check procedure so the sale of the team is not official yet. It likely will be before the NBA season starts.
Perra is also still trying to help round up local ownership, reports the Commercial Appeal.
Pera is actively seeking local partners. He flew to Colorado last month to meet with AutoZone founder and current local partner J.R. “Pitt” Hyde. Pera has also been in Memphis recently. It’s unclear with whom he met, though sources confirmed he met with FedEx CEO Fred Smith and other FedEx leaders.
The announcement was not a shock — Michael Heisley has been looking to sell the Memphis Grizzlies for a few years now, he has gone down the road more than once only to turn back for various reasons.
But the announcement that he was selling the team to young tech billionaire Robert Pera was unexpected. It’s not going to be immediate — the league has a review process that takes a couple of months then must be voted on by the other owners — but the sale is going to happen short of some unexpected revelation.
Heisley told Chris Tomasson of Fox Sports Florida that his health and age issues are what caused him to make the move now.
“I have stepped aside from my companies,” Heisley, who has been looking to sell the team before, said in an interview with FOX Sports Florida about why he’s selling now. “I’m 75 years of age. I had a couple of medical problems this year (with his heart). I thought the team was in good shape. Fan base was in good shape. I thought if the opportunity presented itself, I would sell the team….
“It’s very bittersweet,” Heisley said of selling the team. “I love Memphis …. I’ve spent a huge amount of money to make the team successful there …. I did it because I love basketball and I love the city of Memphis and the people there, and they’ve treated me fantastic. I have nothing but wonderful feelings …. I’m 75. My son (Michael Heisley Jr.) is not interested in going to Memphis and running the team. So, obviously, at some point it was going to have to be done. And, quite honestly, I thought it was my job to get it done rather than leave it to my heirs.”
There were concerns that Pera might try to move the team, but the Grizzlies have a basically iron clad lease for nine more seasons (until 2021). This team is not moving, not soon anyway.
Pera is reportedly an avid basketball fan who plays a few times a week, and that is the case he should be a good owner. Grizzlies’ fans hope better than Heisley.