Daniel Straus

Browns Owner Jimmy Haslam Exploring Bid For Timberwolves

Jimmy Haslam, the owner of the NFL’s Cleveland Browns, is the latest potential buyer to explore a bid for the Timberwolves, according to Scott Soshnick of Sportico.

When we last checked in on the possibility of a Timberwolves sale, former Grizzlies minority shareholder Daniel Straus was said to be in advanced discussions about a potential purchase. However, while The Straus Group did enter into exclusive talks to buy the Wolves, no agreement was reached by the time that window expired, according to Soshnick.

That doesn’t mean that Straus is out of the mix as a potential buyer — Soshnick hears that he remains in talks to potentially purchase the franchise. However, it does open the door for other bidders, such as Haslam, to enter the picture.

Haslam is the CEO of truck stop company Pilot Flying J. Multiple top executives of the company committed multi-million dollar fraud and were sentenced to jail time, but Haslam wasn’t charged as a result of that investigation and has denied any wrongdoing, Soshnick notes. Forbes estimates that the Browns owner is worth about $2.9 billion.

Haslam’s résumé as an NFL team owner likely won’t inspire much enthusiasm among Timberwolves fans — in seven full seasons since he assumed control of the Browns, the team has an overall record of 28-83-1, with no winning seasons and an 0-16 campaign (in 2017).

At least one previous report has indicated that current Timberwolves owner Glen Taylor is seeking an amount in the $1.2 billion range for the franchise. His WNBA club, the Minnesota Lynx, is expected to be part of any sale as well.

Straus Closing In On Purchase Of Timberwolves

An investment group headed by former Grizzlies minority owner Daniel Straus is in advanced talks to buy the Timberwolves, The Athletic’s Jon Krawczynski and Shams Charania report.

The WNBA’s Minnesota Lynx would also be part of the deal. However, there are still a number of issues to be resolved before the sides reach an agreement.

The initial report about Timberwolves owner Glen Taylor mulling the sale of the team surfaced on July 21.

While a group that included former Wolves superstar Kevin Garnett was reportedly interested, the Straus Group has shown serious interest from the start. Its representatives visited the Twin Cities two weeks ago for official meetings, toured the team facilities and reviewed financial documents, according to The Athletic duo.

It entered an exclusivity agreement that expired last week. That didn’t slow the talks, though a handful of other groups were also initially interested in purchasing the team.

Garnett has not had formal discussions with Taylor during the process. Their relationship deteriorated over the years. Garnett referred to Taylor as a “snake” as recently as this spring.

Taylor reportedly wanted assurances that the franchise will remain in Minneapolis and Straus has made that pledge, The Athletic duo adds.

Latest On Possibility Of Timberwolves Sale

The Straus Group, an investment firm founded by Daniel Straus, is exploring the possibility of purchasing the Timberwolves, people with knowledge of the matter tells Gillian Tan of Bloomberg. It’s not clear if The Straus Group is operating alone or as part of a consortium, according to Tam.

Straus has been involved in NBA team ownership in the past, having controlled shares of the Grizzlies up until 2018. Majority owner Robert Pera bought out Straus and fellow minority stakeholder Steve Kaplan two years ago after a clause in their purchase agreement was triggered — if Pera hadn’t purchased Straus’ and Kaplan’s shares in the team, he would’ve had to sell the Grizzlies to them at the same valuation.

Straus is one of just many potential bidders in the mix for the Timberwolves, per Darren Wolfson of 5 Eyewitness News, who tweets that a number of people and groups with interest have not yet been publicly identified. Former NBA players Kevin Garnett and Arron Afflalo are believed to be part of two separate groups with interest in purchasing the franchise.

[RELATED: Glen Taylor Discusses Potential Timberwolves Sale]

According to Charley Walters of The St. Paul Pioneer Press, Garnett’s group includes a pair of billionaires from California and another one from Florida. Walters suggests that the plan would be for KG to invest $200MM and to become the head of basketball operations if his group were to buy the team. If that’s accurate, it’s not clear what it would mean for current president of basketball operations Gersson Rosas.

Walters also reports that the asking price for the Timberwolves – along with the WNBA’s Minnesota Lynx – is expected to be in the $1.2 billion range, though that’s obviously subject to change depending on how the bidding plays out.

Robert Pera Decides To Retain Control Of Grizzlies

10:42am: Tim Bontemps of The Washington Post clarifies (via Twitter) that Pera will purchase Kaplan’s share at the same valuation as Straus’ high bid (noted below), buying out both minority stakeholders.

APRIL 10, 9:38am: ESPN’s Zach Lowe provides a couple more details on the Grizzlies’ ownership situation, reporting that it was Straus’ bid – rather than Kaplan’s – that Pera needed to match. Straus’ higher bid valued the franchise between $1.3 billion and $1.4 billion, per Lowe.

With Pera set to buy out Straus, it’s unclear how Kaplan and his shares are impacted, Lowe adds.

APRIL 9, 7:12pm: Grizzlies majority owner Robert Pera has sent a formal notice to the NBA indicating that he will retain his controlling interest in the franchise, the team announced in a press release.

Pera shared his decision in an open letter from to Grizzlies MVP Season Ticket Members. Minority stakeholders Steve Kaplan and Daniel Straus had triggered a clause in the purchase agreement that forced Pera to either buy them out or sell at a valuation of their choosing.

That duo placed a valuation of just over $1 billion on the franchise. Pera then needed to decide between buying out their shares or selling his own shares at the price of their valuation.

Pera might still wind up selling the team in the long run after buying out their shares, Tim Bontemps of the Washington Post tweets.

Pera’s decision to retain control could also improve the chances of J.B. Bickerstaff being retained as head coach.

Grizzlies Notes: Pera, Transactions, NBA Draft

The working assumption around the NBA is that Robert Pera will retain ownership of the Grizzlies franchise, Chris Herrington of The Memphis Commercial Appeal tweets. The scribe cites comments made by Marc Stein of The New York Times in a recent podcast.

As we covered last month, Pera is expected to have the opportunity to buy out minority stakeholders Steve Kaplan and Daniel Straus after they triggered a clause in the purchase agreement that forced him to either buy them out or sell at a valuation of their choosing.

Herrington also relays that if Pera remains in control of the franchise, J.B. Bickerstaff is a decent bet to retain the head coaching job.

There’s more out of Memphis tonight:

Grizzlies Notes: Ownership, Losing Streak, Evans

The unusual ownership situation in Memphis appears set to take a step forward, according to a report from Daniel Kaplan of SportsBusiness Journal. As we’ve detailed in the past, the nature of the agreement between the Grizzlies’ various owners gives controlling owner Robert Pera the opportunity to buy out two of the club’s top minority stakeholders, or to sell his shares to one of them.

As Kaplan details, Steve Kaplan and Daniel Straus intend to place a valuation of just over $1 billion on the Grizzlies. Once the two minority owners make that price official, Pera would have to decide between buying out their shares or selling his own shares at the price of their valuation. According to Kaplan, most observers of the process expect Pera to keep the team, but if he sells, Kaplan and Straus would have to determine which of them will become the controlling owner.

While Pera may ultimately buy out Kaplan and Straus, that decision seems less obvious now than it has in the past. As Grizzly Bear Blues outlined last month, Pera’s company Ubiquiti Networks saw the value of its shares drop by 25% after the SEC issued subpeonas to look into the company’s finances and structure. However, Kaplan estimates that Pera’s shares in the telecommunications firm would still be worth nearly $4 billion today.

As we wait to see how the Grizzlies’ ownership situation plays out, let’s round up more notes out of Memphis…

  • The Grizzlies’ 18-game losing streak has done wonders for the club’s odds of landing a top pick in the 2018 draft, but all those losses are taking a toll on many of the team’s players, writes Ronald Tillery of The Memphis Commercial Appeal. “I’m offended about losing. I’m just tired of losing,” JaMychal Green said. “I’d rather win so we won’t be talking about this. I’m trying to stay positive. … It’s tough for us to lose. I’m trying not to let the losing affect me and my game and my spirit. I want to just finish strong.”
  • According to Tillery, Tyreke Evans probably won’t return to the court for Memphis before the end of the regular season, in part because it’s simply not worth the risk as he prepares to enter free agency.
  • The Grizzlies signed Briante Weber to a 10-day contract on Wednesday to fill the roster spot vacated by Xavier Rathan-Mayes. We have that story right here.

Grizzlies’ Ownership Clause Activated

A critical clause in Memphis’ franchise ownership agreement has been activated this week, Jon Krawczynski of The Athletic writes. As we’ve written in the past, the second-largest Grizzlies shareholders will now have an opportunity to possibly buy out majority owner Robert Pera.

In short, Steve Kaplan and Daniel Straus will be presented a chance to purchase Pera’s stake (25-26%) at a price point of their choosing, a caveat being that when they submit their offer, Pera will have the option to instead buy their shares (13.5% each) at the same rate.

All eyes will be on how Pera handles the forced decision. As Krawczynski writes, Pera has been a notoriously absent owner and the franchise appears to be trending in the wrong direction.

The clause, then, marks an opportunity for Pera to cash out on what could prove to be a very successful investment considering that Kaplan and Straus will naturally look to dissuade him from matching and, of course, the rise in franchise valuations across the entire NBA in general.

While the Grizzlies were purchased for $377MM back in 2012, the recent sales of the Clippers and Rockets for north of $2B has obliterated the former precedent.

Pera will have 60-90 days from the day that the clause was activated which means that, barring any complications, we could see a resolution here by the end of January or February at the latest. The exact date that the clause was triggered is not presently known.

If nothing else, the activation of the clause could bring an end to a chapter of uncertainty for the franchise. This year especially, with a lack of familiar faces on the roster, a plethora of injuries and now a coaching change, any semblance of stability could bode well.

Whether that means Pera assumes a larger ownership stake or Straus and Kaplan unseat him altogether, however, remains to be seen.

Latest On Grizzlies’ Ownership Situation

As of this Thursday, a pair of Grizzlies minority owners will have the opportunity to make a play for majority ownership of the franchise, as Brian Windhorst and Zach Lowe detail in an ESPN.com report.

The unusual ownership situation in Memphis, which we outlined last month, allows Steve Kaplan and/or Daniel Straus, who each own about 14% of the Grizzlies, to make an offer to majority owner Robert Pera, who owns approximately 25-26% of the franchise.

If either Kaplan or Straus makes an offer during a 60-day window, which opens on Thursday, Pera would then have a 60-day window of his own to decide whether to buy Kaplan’s or Straus’ shares at their valuation, or whether to sell his own shares to them at that price.

Kaplan and Straus are under no obligation to initiate the process, but there’s a belief that one or both of them will do so, sources tell Windhorst and Lowe. Still, it’s possible that the process could take months to play out, with Straus and Kaplan standing by and watching to see what the other will do. If neither minority shareholder places a formal bid at this time, they’ll have another chance to do so in 2020.

It will be interesting to see whether either minority stakeholder moves forward with an attempt to supplant Pera as the Grizzlies’ controlling owner. The amount of a potential bid from Straus or Kaplan would be equally fascinating — Forbes’ franchise valuations earlier this year pegged the Grizzlies’ worth at $790MM, but those estimates are typically conservative. For comparison’s sake, Forbes’s valuation for the Rockets was $1.65 billion, and Tilman Fertitta bought the club several months later for $2.2 billion. The current Grizzlies’ ownership group bought the team for about $350MM in 2012.

Of the Grizzlies’ top two minority shareholders, Kaplan appears to be the more likely of the two to make a move, though that’s just my speculation. He has made an effort in the past to gain a more significant stake in an NBA team, but attempts involving the Hawks and Timberwolves didn’t pan out. Kaplan currently has a controlling interest in Swansea City, a Premier League soccer team in Wales.

While the Grizzlies’ ownership situation is somewhat uncertain going forward, the team is off to a great start on the court. Memphis is 3-0 so far, with victories over the Warriors and Rockets.

Potential Ownership Change Looms For Grizzlies

At some point in October, there may be a transition in ownership of the Grizzlies but it’s complicated. This week, Haley O’Shaughnessy of The Ringer broke down a clause built into the original purchase agreement when majority owner Robert Pera and company took over the franchise from Michael Heisley.

In short, October 25 marks the fifth anniversary of the consortium of owners led by Pera assuming control of the team. Pera’s majority stake of the club, it’s worth noting, is a somewhat modest 25%.

Built into the terms of the agreement at the time was language that ensured that the partial owners with the second- and third-largest shares in the club could potentially buy Pera out at price of their choosing.

In response to the national article published at The Ringer, Chris Herrington of the Memphis Commercial Appeal clarified some aspects of the agreement. Per Herrington, who wrote one of the original articles that O’Shaugnessy cited, five years after the original purchase (and every three years there after), either Steve Kaplan or Daniel Straus – who each own 14.22% – will have the option to bid for Pera’s shares at a rate that they themselves choose.

At that point, the ball will fall into Pera’s court, who will then elect to either sell his stake at that price or buy the offering party’s stake at that same rate. Pera, therefore, can not trigger the event but his hands aren’t exactly tied either. The onus is on either Kaplan or Straus, if they so dare, to find a pricepoint that will dissuade Pera from simply matching and taking over their own shares.

As O’Shaungessy writes in her piece for The Ringer, the relationship between Kaplan and Pera can be described as strained and Kaplan has aggressively sought a controlling ownership of his own NBA franchise, ultimately coming up short in bids for both the Hawks and the Timberwolves over the years.

Complicating matters is the recent sale of the Rockets for $2.2B that will inevitably bump franchise values across the board up dramatically, including that of the Grizzlies’.

In 2012, the Grizzlies sold for about $350MM (per Marc Stein of ESPN). In 2014, following the sale of the Clippers for $2B, Forbes projected the value of the franchise at $750MM. That, of course, is expected to creep up ever higher in light of the Rockets deal.

There’s nothing set in stone that either Kaplan or Straus will pursue the bid for ownership, especially considering that it could backfire, but it’s something worth keeping an eye on at that fifth anniversary draws ever closer.