On July 3, 2001, the Vancouver Grizzlies, a Canadian professional basketball team that competed in the National Basketball Association (NBA), relocated from its original city of Vancouver to the American city of Memphis, Tennessee. The team began play as the Memphis Grizzlies in the 2001–02 season. It was the first of three NBA franchise relocations between 2001 and 2008, and the third of four major league teams to relocate from Canada to the United States between 1995 and 2005.
The Grizzlies had been created as an expansion team along with the Toronto Raptors in 1995. For the six seasons in Vancouver, the Grizzlies performed unsuccessfully; they only once finished better than last in the Midwest Division and never reached the playoffs. The Grizzlies were owned by Orca Bay Sports and Entertainment, who also owned the Vancouver Canucks of the National Hockey League (NHL). In 1999, Bill Laurie, owner of the NHL's St. Louis Blues, attempted to buy the Grizzlies, with the intent to move it to St. Louis. After interference by the NBA, the Grizzlies were sold to Michael Heisley. He immediately started the process to relocate the team, and eight U.S. cities were candidates for the team—Anaheim, California; Buffalo, New York; Memphis, Tennessee; New Orleans, Louisiana; Tampa, Florida; Louisville, Kentucky; Las Vegas, Nevada; and San Diego, California—before settling on the move to Memphis at the end of the season.
The first four Grizzlies seasons had given average attendance in the top third of the league to the middle of the league. However, the last two seasons saw a reduction to among the league's lowest attendances; participating reasons were the team's poor performance and the 1998–99 NBA lockout. Contributing to the conditions for relocation were a weak Canadian dollar, unwillingness of some American players to live in Canada, and unfavorable weather.
Background Memphis has previously hosted a major professional basketball team in the American Basketball Association (ABA). Founded as the New Orleans Buccaneers in 1967, the franchise moved to Memphis in 1970, becoming known as the Pros. The team changed its name to the Tams and then the Sounds, before folding in 1975 prior to the ABA–NBA merger in 1976.
The Grizzlies were created as an expansion team for the 1995–96 season which, along with the creation of the Toronto Raptors, saw the NBA expand into Canada. The Grizzlies were owned by Vancouver Canucks owner Arthur Griffiths. His company was in the process of building General Motors Place (GM Place) for the Canucks, and saw the Grizzlies as an additional tenant. Both Canadian teams (the Vancouver Grizzlies and the Toronto Raptors) were hampered by the NBA's decision to deny them one of the top five picks in the first draft, and the teams would not be allowed a top draft pick in the following three seasons, even if they should win the lottery. The teams were also hindered from using their full salary cap the first two seasons. For all six seasons in Vancouver, the Grizzlies had a terrible record. They finished seventh of seven in five seasons, and claimed one sixth place in the Midwest Division, never close to reaching the playoffs. The team won 101 games and lost 359, giving a winning percentage of .220.
Change of ownership On March 7, 1995, six months before the Grizzlies began play, the majority of the holding company was sold from Griffiths to Seattle-based John McCaw, Jr. On November 12, 1996, McCaw bought the rest of company. He stated that he was committed to retaining the team in Vancouver. Griffiths was forced to sell the Canucks and Grizzlies following the cost overruns that occurred on GM Place, and the expansion fees to start the Grizzlies had made his company illiquid.
In 1999, McCaw started attempts to sell either Orca Bay or the Grizzlies, and at first negotiated an agreement with Dennis Washington, owner of Seaspan, who had a large portion of his operations in Vancouver. Washington initially agreed to purchase 50% of Orca Bay, with the intent of keeping the teams in Vancouver. Instead, McCaw used Washington's bid to leverage a higher sales price with Bill Laurie, who offered US$148 million for the Grizzlies, and a US$52 million bonus if the team ultimately relocated to St. Louis. The announcement was made in September 1999, one month after Laurie had bought the NHL team St. Louis Blues and their home venue Kiel Center (now the Enterprise Center). St. Louis had not been the home of an NBA franchise since the Hawks franchise relocated to Atlanta in 1968. Kiel Center had annual sell-out for 15 to 17 basketball games for the Saint Louis University Billikens.
After the deal was announced, NBA Commissioner David Stern stated that he was opposed to a relocation, as no NBA franchise had moved since 1985, when the Kansas City Kings relocated to Sacramento, California. He stated that his goal was that the Grizzlies remain in Vancouver and succeed there. The NBA Board of Governors' Finance Committee also made negative statements, as the purchase agreement was structured with incentives to move the team. The deal was then renegotiated before the board could vote on the issue. On January 21, 2001, Laurie announced that he had paid McCaw an undisclosed amount to walk away from the deal.
Four days later, on January 25, it was announced that the Grizzlies were sold to Chicago-based Michael Heisley for US$160 million. At a press conference, he stated that he had the support of Stern, that he was committed to keeping the franchise in Vancouver, to making it a winning team, and that he was an owner that was committed to the market.
Reasons for relocation
Dick Versace, the Grizzlies' president of basketball operations, stated in the final Vancouver season that the company was losing US$40 million per season. These numbers were questioned by Richard Peddie, CEO of the Raptors, as the Grizzlies had a salary cap of US$48 million. Retrospectively, Heisley stated that he lost US$87 million on owning the Grizzlies, although that included a US$30 million relocation fee to the NBA. Versace stated that he felt that the team did not get sufficient support from the business community. Colin Jones, University of Victoria professor in sports economics, stated that it was difficult to attract corporate sponsors as long as the team was losing so many games; the Grizzlies' lack of good draft picks led to the team failing to win, thus losing revenue. He also noted that the team never sought help in the general business community regarding management issues.
Stu Jackson, general manager for the first five seasons, made several non-optimal player selection decisions. This included selecting Bryant Reeves in the 1995 draft, and signing him to a US$65 million six-year contract extension in 1997, putting the Grizzlies in a salary cap squeeze. From then he consequently drafted point guards, including Antonio Daniels, who failed to develop. Jackson traded a 2003 first-round pick for Otis Thorpe, who "hated Vancouver". He signed free agent Tony Massenburg for US$1.5 million, just to sign Isaac Austin for US$5.5 million and leave Massenburg on the bench. Griffiths retrospectively stated that the draft conditions from the NBA did not allow the franchise to build a winning team in years, and that the NBA had asked too high a price for not providing the means of a suitable income. However, he did draft Shareef Abdur-Rahim and his hands were tied when top pick Steve Francis refused to play for Vancouver. On the other hand, the Raptors succeeded in acquiring Vince Carter, reached the playoffs in the 1999–2000 season and played consistently in front of sell-out crowds.
The location of the team in Canada was a major contributor; at the time the exchange rate was 67 U.S. cents to the Canadian dollar. Because revenue was collected in Canadian dollars but player and coach salaries were paid in U.S. dollars, the team ended up spending an undue amount of its revenue on salaries. The 1998–99 lockout was the pivoting point for home game attendance. While the whole league experienced a drop in attendance after the lockout, Vancouver experienced an even larger fall. The average attendance in 1997–98 was 16,108, ranking 16th in the league, while it fell to 13,899 in 1999–00, ranking 27th.
Retrospectively, Griffiths stated that Heisley intentionally ran the team financially aground by alienating people, running insufficient marketing, and claiming basketball did not work in Vancouver. While running the team, Griffiths had not lost "millions and millions" and he stated that Vancouver had a better fan base than most NBA teams. The statements were denied by Heisley.
Proposed cities
With the public announcement in mid-February of the possible relocation of the team, Heisley and representatives for the Grizzlies set out on a road trip to consider several U.S. cities which wanted to have the franchise relocate to their city. Originally Heisley had until March 1 to apply to the NBA for a relocation, but the deadline was later extended to March 26. A similar deadline was also awarded to the Charlotte Hornets, who was also considering a relocation.
In February 2001, the Louisville Board of Aldermen contacted the Grizzlies in an attempt to relocate the team to Louisville, Kentucky. The city lacked a suitable venue, but state and local officials agreed to build a new US$200 million arena if the NBA franchise relocated to the city. In addition, Tricon Global Restaurants (now Yum! Brands) would offer Heisley US$5 million per year for 20 years to locate the team in Louisville. (Ultimately, while the Grizzlies did not move there, the city built its own NBA-suitable arena in 2010 called the KFC Yum! Center; It houses the University of Louisville's basketball program.)
The Memphis relocation effort was led by AutoZone founder Pitt Hyde, who promised to purchase 50% of the team. The city had a venue Pyramid Arena, completed in 1991, which could be used as a temporary home until a new US$250 million venue was ready for use in 2004. The venue would be publicly financed through sales tax rebates, government-backed bonds and hotel and car rental taxes. The Memphis efforts to get an NBA team had started in 1997, following the relocation of the Houston Oilers of the National Football League to Tennessee.
New Orleans mayor Marc Morial stated that he had approached Heisley in an attempt to attract the Grizzlies to his city. The city had opened the US$114 million New Orleans Arena (now Smoothie King Center) in 1999, and offered it as a home to the franchise. Metrovision, the area's economic development chamber, stated that they had secured guarantees for purchasing suites, season tickets and club seating from businesses to the extent that there was a waiting list for suites. Also a relocation to St. Louis, under the same conditions as with Laurie, was considered.
Another option was to relocate to Anaheim, in the Greater Los Angeles area. The Houston Rockets had looked into relocation to Anaheim the previous season, with Arrowhead Pond of Anaheim (now Honda Center), home arena of the NHL's Mighty Ducks of Anaheim, as the home venue. However, the Mighty Ducks had an agreement that any other tenant at the Pond should share revenues with their then-owner, The Walt Disney Company, although Disney stated they were willing to negotiate the terms. Additionally, the Grizzlies would have had to share the market with two established teams, the Los Angeles Lakers and Los Angeles Clippers, thereby limiting revenue.