NASHVILLE, Tenn. -- The owner of the Memphis Grizzlies said
Wednesday he doubts an investment group led by former Duke players
Brian Davis and Christian Laettner can come up with the money to
buy his majority share of the team by a Jan. 15 deadline.
"I think that it's going to be difficult for them to meet those
milestones, get the money and everything and get league approval by
Jan. 15," Michael Heisley told The Associated Press. "They still
have until Jan. 15 under the contract."
That date was set in the contract for real estate developer
Davis and his group to buy billionaire Heisley's 70 percent share
of the Grizzlies. NBA officials said Dec. 5 they are not
considering the sale, because the proposed buyers had not provided
enough information on their financing for the deal.
Heisley is expected to sign a "notice of termination," according to a report in the Memphis Commerical Appeal. The notice will, however, give Davis' group 30 days to comply with the terms of the agreement.
The newspaper reported Davis, who put up at least $1 million in escrow, stands to lose a good deal of that money if the deal is terminated.
Under the NBA's rules, in order to become a managing partner in the Grizzlies, Davis had to purchase 15 percent of the team's equity valuation -- the total franchise value minus assumed debt -- in order to have control of the franchise. The team is valued at $360 million, and the newspaper reported Davis needed to produce between $31 million and $39 million in cash -- none of it borrowed -- to close the deal.
Davis was not in his office in North Carolina on Wednesday, and
his attorney handling questions about the sale did not immediately
return a telephone message from the AP.
"I do deals. That's the business I'm in," Heisley said. "The
deal isn't done until the money is collected. I learned that a long
time ago. I've been through this process a few times during the
past 40 years."
Heisley said he would not have entered into the contract had he
not talked to people interested in investing with Davis in the
deal. He said he thought Davis and his investors would be a good
fit for Memphis because of their plans for the team and the city's
Minority owners of the team in Memphis, who own
30 percent, declined an option to match the offer by Davis' group.
If the sale falls through, Heisley said he would be willing to
consider another prospective buyer. If not, he plans to become much
more involved with the team, which entered Wednesday night's game
at San Antonio with a 6-19 record, the worst in the Western
All-Star center Pau Gasol, who broke his left foot playing for
Spain in this summer's world championships, returned to the lineup
last week after missing the first 22 games.
Heisley said he must evaluate where the team is and what the
approach will be for the rest of the season.
Reducing expenses will be at the top of the list for a team that
reportedly lost more than $29 million in 2006.
Heisley was among a group of small-market owners who sent a
letter in November to the NBA lobbying for revenue-sharing.
"Any franchisor must look toward the health of all the
franchisees," said Heisley, adding it's very difficult to compete
in the NBA. "If you have a large group of franchisees finding it
difficult to keep their head above water, you've got to start
looking at what solutions there are to that. Revenue sharing is one
tremendous step in that direction."
Information from The Associated Press was used in this report.