Could the pandemic-shortened season open a door for the Grizzlies to leave Memphis?
Contract requires payment for ticket shortfall or the Grizz can walk
MEMPHIS, Tenn. (WMC) - There is some concern about the NBA Grizzlies and their contract to continue playing in Memphis at FedExForum. It has to do with the amount of paid attendance at the games and whether it is enough to keep the Grizzlies in the Bluff City.
The concern comes from a clause in the Grizzlies’ original contract with the city and county that says if paid attendance falls below 14,900 at FedExForum, the Grizzlies can trigger an early termination right allowing the team to get out of the deal and leave Memphis if the city and county, or the community, don’t come through with enough ticket sales to cover the shortfall.
The provision was included in the original deal, signed by all parties, back in 2001 when the team relocated to Memphis from Vancouver.
With the pandemic ending the regular season prematurely, ticket sales were halted for any remaining games.
We’ve reached out to the Grizzlies to confirm whether the season average fell below the 14,900 threshold.
The Grizzlies declined to comment, but our source tells us the team is not interested in leaving and all parties have been in negotiation “for months.”
When asked about the situation, City of Memphis Deputy Chief Operating Officer Kyle Veazy said in a statement, “We are aware of that clause in the contract and we’ve been working proactively with our partners at Shelby County and the Grizzlies to address it.”
According to our source, the shortfall would be less than $10 million.
The Grizzlies’ FedExForum lease runs through 2029.
The team’s local owners have a right of first refusal if majority owner Robert Pera wanted to sell it before October 2027.
Their price would be roughly equal to what Pera paid for it -- about $377 million.
Forbes values the franchise right now at $1.3 billion.
Copyright 2020 WMC. All rights reserved.