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Grizzlies sale may fall through, potential owner has some issues

Aug 15, 2012, 8:38 AM EDT

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Grizzlies fans were rightfully hopeful when news got out that long-time team owner Michael Heisley planned to sell the team to a young billionaire out of the Silicon Valley, Robert Pera. Not that they really knew anything about Pera — he is 34 and filthy rich selling high tech electronic equipment to the developing world, mostly — but he had to be better than Heisley. Right?

We may never find out. The sale of the Grizzlies to Pera seems to have some challenges. To put it kindly.

As the NBA goes through its background checks on Pera, his company, Ubiquiti Networks Inc., is seeing a lot of controversies. And that could stall or kill the sale, suggests the San Jose Business Journal (via Ball Don’t Lie and Eye on Basketball).

The NBA is going through an extensive vetting process that will look into everything from Pera’s business associates, to his family, to his financial situation. That will include Ubiquiti’s recent controversies, such as an acknowledgement that the company’s products were illegally sold into Iran….

NBA officials will “look into (the Iran issue), they’ll question it,” said SportsCorp. President Marc Ganis, who advises on team deals. “They don’t want a front-page New York Times story six months from now about how an ‘NBA owner sold products to terrorist organizations,’ by way of example. They’re going to want to understand what (the Iran case is) before they sign off on it.”

Pera has a 63 percent stake in Ubiquiti, according to regulatory filings. That stock was worth $2 billion as of May but has dropped to $800 million.

I would love to be worth only $800 million.

But for buying an NBA team, that is on the low end. Especially when the sale price is a reported $350 million.

Pera has said he is looking for some local investors to be part of the franchise, so he wouldn’t have to come up with all the cash himself. And he still has the money to buy the team. But all this stuff is enough to get the rather conservative (financially) NBA to pause.

  1. gmsalpha - Aug 15, 2012 at 9:20 AM

    You know, that’s what I admit I love about the Lakers. They’re owned by the Buss family, where the Lakers ARE their business. They live and die by the team, and basically have control over their net worth, for the most part because they sign the contracts and know that if they put a good product on the court at a price that the people can afford, they’ll be profitable. Yes, it’s L.A and it’s much different than Memphis, but on a different scale, it could be the case anywhere.

    This guy Pera, and anyone else who relies on outside businesses, especially when it fluctuates so widely with the blowing of the stock trade winds, is not really on solid footing, or could have their situation changed within a matter of weeks.

    Going from 2 billion to 800 million in 3 months is absurd! And pretty darn scary, if you wanna know the truth.

    • jj871 - Aug 15, 2012 at 9:38 AM

      Only Lakers fans would have such a deluded rationale.

      Ya, you’re right, have an outside business that generates millions in income each year, completely independent of your basketball team, is definitely something no one would want to have. Sigh.

    • mogogo1 - Aug 15, 2012 at 11:53 AM

      The Buss family’s money came primarily from real estate which is about as volatile an investment as you can find.

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