• Dave McGuire

Are the Grizz Candidates for Relocation?

The Clarksvillian

It's as natural as sunrise to feel the general uneasiness of a Grizzlies fan when relocation is mentioned. The Memphis in May Festivals, St. Jude's Marathon, or another Jerry Lawler comeback are the only topics approaching the consistency of relocation talk.

To clearly understand the Bluff City situation, it is necessary to go back - way back. Finding the roots of relocation rumors will require an understanding of the original arena lease agreement. In a nutshell, it can be reduced to a couple of sentences: If FedEx Forum's paid attendance falls below 14,900, 64 of the largest suites are not sold in full, or the club level season tickets fall below 2,500, the contract triggers an option to break the lease.

The two-year run of "grit and grind" highlights a peak attendance era for Memphis basketball, with the Grizzlies averaging 17,024 fans (2013-15). And because of a variety of factors, the last several seasons have seen continual declines in paid fan attendance. A market like Memphis simply does not have the luxury of falling behind in attendance from a revenue perspective, - and that is sadly where they find themselves.

Memphis' being one of the smaller major league sports markets, with a metro population of 1.34 million residents, is no secret. Supporters will quickly point to Memphis as having recently landed its 6th Fortune 1000 company to bolster the corporate support necessary for an NBA franchise. Surface level data appears reassuring at first glance, but are the disposable dollars available for a consistent ticket, merchandising, and ad-revenue sales? Keep in mind there is an elephant in the room that no one wants to discuss: Memphis' overall poverty rate is a staggering 21.7%, with child poverty clocking in at 35%.

Every fan knows the decade-old story of how Seattle lost the SuperSonics to Oklahoma City - but that was a unique situation not reflective of the Seattle market. Now consider the leverage that the same market holds when an NBA arena is reintroduced and corporate headquarters such as Amazon, Costco, Microsoft, and Starbucks are engaged. Even if you are not a regular visitor to the business pages, it is still likely that you recognize that Memphis lacks those same deep corporate pockets. Do you need that point underlined? Earlier this year, Seattle Mayor Jenny Durkan attended a Grizzlies-Pelicans game and was asked by NBA Commissioner Adam Silver what brought her to the game. Her response? "I'm shopping". Confidence.

Since the OKC debacle, Seattle’s outdated Key Arena has undergone a major renovation project, which a spokesperson estimated at roughly $1 billion. That newly refurbished arena is officially major league ready, now called Climate Pledge Arena, and is home to the NHL's Seattle Kraken. The Climate Pledge Arena represents leverage, which should make several NBA fan bases hopeful the league might increase expansion fees just once more.

In the past, ESPN's Brian Windhorst mentioned Memphis as a possibility for relocation to Seattle. That dated information is a shady example of how a team's ownership shops itself. To Memphis' benefit, Seattle has emphasized that their preference is for an expansion team and not a relocation of an existing team. NBA owners support expansion city prioritization, and league officials will ensure that process happens by protecting the massive expansion fees. Agreeing with Windhorst's example that it is no longer relevant does not change the core narrative about franchise stability.

We can always find the best source for Memphis information and perspectives with Geoff Calkins:

"It would be hard for any owner to move the Grizzlies before 2027. The lease binds the Grizzlies to Memphis through the end of the 2020-2021 season. After that, there is a gradually descending termination fee that alarmists like to point out (correctly) would not be sufficient to keep the team in town. But the lease has another half dozen provisions that would make it hard to move the team before 2027."

Remember this comment from Leftfield? Just when Seattle was looking like a non-starter for the Grizzlies...

"I heard through the grapevine that there are a couple of teams for sale," TNT analyst and NBA Hall-of-Famer Shaquille O’Neal told his podcast audience, "and one may be going to (Las) Vegas."

Memphis' safety net is the probability of Vegas being an expansion team to balance the Seattle addition. The two most attractive non-NBA cities are apparently preparing for expansion rather than relocation. Whew. Dodged another relocation bullet.

One other team has been the focal point of more than a few NBA relocation rumors: the New Orleans Pelicans. The NOLA market has many of the same issues as Memphis, plus arena and corporate HQ issues. Those flags represent a third buffer for the Grizzlies leaving Memphis.

And then there is ...

Grizzlies' majority owner, Robert Pera has repeatedly stated he is "committed to keeping the franchise in Memphis." But can the public trust him at his word?

In the short term, it’s a safe bet to assume Pera is being sincere. If the team moved before 2027, it would force Pera to offer his partners an opportunity to buy him out at "a price equal to his invested capital." The team’s local owners retain the right of first refusal if majority owner Robert Pera wants to sell before October 2027. Their price would be equal to Pera’s purchase price of approximately $377 million; Forbes currently values the franchise at a hefty $1.5 billion.

If franchises are being recruited and offered golden parachutes from other cities, relocation rumors will continue to circulate as often as clickbait. Do you want to know what clickbait isn't? During a future planning meeting, NBA commissioner Adam Silver told players that roughly 40% of league revenues come from ticket sales and arena sponsorships. Remember the disposable income question about Memphis?

The relocation topics typically dissolve into identifying any remaining and viable markets for relocation. Kansas City? Louisville? Virginia Beach? San Diego? Mexico City? Each market has substantial challenges to overcome before being awarded an NBA franchise. Half of those communities will perpetually pursue an NBA franchise as a means of public relations, marketing, or campaigning; it's the nature of the game, and league owners know it.

What do you think Vancouver Grizzlies fans thought of Memphis in 2000?


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