Steve Kaplan’s plan to buy a share of the Timberwolves has hit a snag.
One reason: Kaplan owns a share of Robet Pera’s Grizzlies, and he’s apparently having trouble selling.
Meanwhile, sources say Pera has been distant from Memphis over the past year and has excluded minority owners from any meaningful participation in team decision-making, which is his right as controlling owner. Kaplan is worried that the market for his minority interest will dry up once potential buyers complete their due diligence on Pera’s ownership techniques, sources said.
In selling his minority stake on the open market, Kaplan has been asking for close to $100 million for his 14 percent share — pegging the team’s value at roughly $700 million. Kaplan’s figure is a big-enough number to turn off some potential investors, sources said.
The drama could drag on, particularly because of an unusual clause in the Memphis ownership agreements that Kaplan can trigger in October 2017 — on the five-year anniversary of their purchase of the team with Pera.
At that time, Kaplan and fellow minority owner Daniel Straus, an East Coast health care magnate and the team’s vice chairman, have an option to make a bid for controlling interest in the team at a price of their choice, sources said. At that point, Pera would have two options: buy out Kaplan and Straus at that named price, or sell his shares to them based on the same valuation. Control of the decision ultimately would rest with Pera.
Mike Conley will be a free agent this summer, and he appears to enjoy playing with Memphis’ Marc Gasol-led core. The Grizzlies best chance for keeping him is convincing him his future will remain similar to his current situation.
How can they do that with so much uncertainty at the top?
Whatever is happening in Memphis, Pera has struggled to frame his ownership as functional. Fairly or not, he has been painted as both erratically overbearing and now distant. At face value, there are problems in how this organization works. At minimum, Pera faces opposition from people who are successfully painting an image of a poor owner.