After two consecutive trips to the playoffs and a return to respectability in the Western Conference, Michael Heisley has at last found a buyer to purchase the Memphis Grizzlies.
The Grizzlies, confirming an earlier ESPN.com report, announced Monday that Heisley has entered into a sale agreement with Robert J. Pera, founder and CEO of the Ubiquiti Networks and who, at 34, earned a spot on Forbes' list of the 10 youngest billionaires in the world.
The purchase price is in the $350 million range, sources said Monday. NBA Board of Governors approval is required before Pera can be officially installed as successor to Heisley, who recently turned 75, but sources briefed on the negotiations told ESPN.com that Heisley received an eight-figure deposit from Pera on Monday to start that process.
"I think he'll be a good owner," Heisley told FoxSports.com. "He's young. He's in his 30s. I think he loves basketball. And I think he's financially very well off. I think he'll be an excellent owner, but that's a job for the NBA to decide."
Heisley estimates that approval for transferring control to Pera will be "at least a 30-to-60-day process." And in a subsequent interview with NBA.com, Heisley expressed confidence that Pera's ownership will be sanctioned by league officials.
Until then, Heisley said he will make personnel and business decisions in consultation with Pera.
"This one appears to be moving and I'd be surprised if it didn't happen," Heisley told NBA.com. "I guess my emotion is I'm praying that I severely don't regret it. I love Memphis. They've been good to me, the town and everything else. And quite frankly I love the NBA and love being involved in it. I'll still be very interested in it. Quite frankly, I just thought the time is right. If I had a team in (Heisley's native) Chicago, I might not have (sold), but it's such a long haul going back and forth down there."
Sources close to the process say that Pera has never mentioned trying to move the team out of Memphis. The reality, though, is that the Grizzlies' lease at the FedExForum would make relocation difficult and expensive under any circumstances, thanks to a lease that binds the franchise to the arena until the year 2021, with steep financial penalties triggered by breaking that lease.
In 2006, Heisley agreed to sell his 70 percent controlling stake in the Grizzlies for a reported $360 million to a consortium headlined by Christian Laettner and fellow Duke alumnus Brian Davis. That deal infamously collapsed and was followed by the controversial trade of Pau Gasol to the Los Angeles Lakers in February 2008 following three straight trips to the playoffs without winning a single game. But Pera, known in business circles as a basketball fanatic, is regarded as a far more serious bidder than the ill-fated group headed by Davis given his financial portfolio.
The 34-year-old Northern California native is a former engineer at Apple who left the computer giant at 25 to start his own company. Today Pera owns a reported 64 percent of the Ubiquiti Networks he founded and operates the company out of Taiwan as well as San Jose, Calif. Pera speaks Chinese and Japanese and is said to play basketball four to five times per week.
According to Forbes, Pera actually dipped from a net worth estimated at $1.5 billion to slightly below the billionaire line last week when a recent financial slump saw Ubiquiti's stock drop from a high of nearly $36 per share last month to under $15 a share. But sources close to the talks expressed confidence Monday that the slump is only temporary and that it's unlikely to prevent Pera's bid from being approved by league officials.
Sources told ESPN.com that Pera was spotted at a Grizzlies game in March touring the team's facilities and operations, after which Heisley acknowledged to the Memphis Commercial Appeal in March that there was another unnamed bidder for the team along with California billionaire Larry Ellison. Heisley was quoted as saying that he halted negotiations with Ellison because the deep-pocketed Oracle founder had made it clear that he wanted to relocate the franchise.
"We're not even considering Ellison," Heisley told the newspaper. "This team cannot be moved."
Speaking Monday on the matter to FoxSports.com, Heisley said: "We still have ... nine years left on a contract with the city to stay in the city. I have not yet figured how people ... think somebody is going to buy the team and leave. It's going to be here for a while." Heisley, though, did acknowledge: "We can't make somebody stay here forever."
The Grizzlies were widely bashed for the Gasol deal that ultimately helped the Los Angeles Lakers win championships in 2009 and 2010, but Heisley -- along with general manager Chris Wallace and coach Lionel Hollins -- eventually hushed some of the criticism during the past two seasons by signing Zach Randolph, Rudy Gay, Marc Gasol and Mike Conley to lucrative contracts amid long-standing skepticism about his willingness to spend.
"I've made it clear for some time that if somebody came up with the right offer, I'd consider selling the team," Heisley told NBA.com. "It wasn't a secret in Memphis or, really, around the country. I wasn't trying to sell the team (actively). I don't know the gentleman who's buying the team personally; he came to see me."
As for his health, Heisley told FoxSports.com: "I have stepped aside from my companies. 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 continued. "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.
"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. I've had my surgery on my heart. I'm just saying when you get to be my age and things start happening, it makes you suddenly realize if you're going to make these kinds of decisions, you got to make them while you're healthy. You don't want to be making them on a hospital bed."
The Grizzlies suffered a disappointing first-round exit this season after blowing a 24-point lead in the fourth quarter against the Los Angeles Clippers in Game 1 and then losing Game 7. But in 2011, after the first-round upset of 61-win San Antonio, Heisley told ESPN.com: "I think, quite frankly, that we're poised to be a real factor in this league going forward."
After this season's early exit, Heisley described the Grizzlies' achievements as "miraculous" to the Commercial Appeal given the loss of key reserve Darrell Arthur to a torn Achilles tendon during training camp and Randolph's 37-game absence because of a torn MCL in his right knee.
The Chicago-based Heisley bought the Grizzlies in 2000 when they were located in Vancouver and moved the franchise to Memphis starting with the 2001-02 season after initially promising to keep the team in Canada.
"I'm not sitting here going out having a celebration tonight," Heisley told NBA.com. "When the contract is approved and they put up a big slug of money, then it will be done."
Said Pera in a statement released by the Grizzlies: "I am excited about the opportunity to build on the work that has made the Memphis Grizzlies a highly competitive NBA team. I look forward to getting to know the Memphis community and to continuing the team's success in Memphis."