Robert Pera uses NBA credit facility to finalize deal for Memphis Grizzlies – NBA News
Robert Pera, the new owner of the Memphis Grizzlies franchise, has taken a debt of $175 million to facilitate his $377 million purchase of the franchise. And although that may seem a little odd to the general public, it is perfectly
ok in the world of the NBA as well as finance.
“There is nothing unusual about the financing to acquire the Grizzlies. It is standard in the context of team acquisitions and fully compliant with the NBA's debt policies. The financial wherewithal of Robert Pera and this ownership
group is very strong and the team remains on a very solid,” said Rob Friedrich, a vice president of the NBA and the league's general counsel.
The Pera led group finalized the transaction with former Grizzlies owner Michael Heisley last month. Sources have informed that Pera used the $125 million available to NBA teams through the league’s credit facility, and another
$50 million in bank financing to close the deal.
However, using the league’s credit facility is not new in the league, as 19 of the thirty league franchises are using that facility, and many use it to the $125 million per franchise allowable limit. The facility is basically a
pool of money banks provide at relatively low interest rates because of the NBA’s credit worthiness.
The Memphis Grizzlies former owner Heisley also took advantage of the credit facility back in 2009 when the league increased the maximum allowable amount.
“Anyone who has a chance to get low-interest financing (in this environment) and doesn't take it needs to have his head examined," Heisley had said at the time.
Pera is the owner and chairman of the group that bought the franchise which includes 24 persons or entities, but the actual ownership distribution has not been disclosed. There have been reports that Pera’s share is less than 50
percent in the franchise. The league rules state that the controlling owner of any group that buys an NBA franchise should have at least 15% share of the franchise.
With a new owner in place who has added celebrities such as Memphis native Justin Timberlake to his ownership group, the Grizzlies are set to embark upon a new era which many predict will see more growth and success than the previous
one.
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