City of Memphis and Shelby County to pay Grizzlies $44.8 million on remainder of FedExForum lease, which spans 28-29 seasonGetty Images
Taxpayers are “no longer responsible for making up the difference on ticket sales” at FedExForum under the Grizzlies’ amended lease, according to Samuel Hardiman of the Memphis COMMERICAL APPEAL. This will eliminate “public exposure to year-to-year fluctuations in Grizzlies fortunes and attendance.” To replace that, the City of Memphis and Shelby County “will pay the Grizzlies $44.8 million over the remainder of the lease,” which will run through the 28-29 season. The payouts “should stop there, unless changes to the NBA’s business model push things in another direction.” The amended lease includes a “new early termination option for the Grizzlies” – which is “tied to how the team performs under the NBA’s revenue sharing and media rights systems.” The agreement would give local governments the “option to return the Grizzlies whole if television rights or revenue sharing revenue were to be affected by what is defined as a ‘recurring revenue impact event.’ NBA revenue-sharing model that would “significantly harm the Grizzlies’ finances would likely be a big number – and could run into the tens of millions. It would be “beyond the $44.8 million already agreed upon” and would “likely be an amount greater than what local governments would have paid had they been forced to pay annual ticket shortfalls during the remainder of the lease. The Grizzlies receive revenue-sharing payments.” However, a waiver of revenue sharing would be “such a significant shift in the league model that changes would likely be planned years in advance” (TRADE CALL Memphis, 6/16).