U of M seeking new deal on arena
Wants to revisit lease with Griz
The University of Memphis, facing a financial hit because of declining basketball attendance, wants to renegotiate its lease at FedExForum.
The school’s agreement with the Grizzlies, who operate the arena, calls for the Tigers to receive an $800,000 annual payment if certain attendance criteria are met. T he a n nu a l payment is reduced if the average turnstile count falls below 10,000 — which appears to be the case this season, although the figures have not been made available by the Grizzlies or Tigers despite open-records requests by The Commercial Appeal.
“It will be kind of up to the Grizzlies,” U of M athletic director Tom Bowen said of a possible renegotiation. “(Grizzlies general manager) Chris Wallace and I are very close. I think we can sit down and talk about the fit.
“I think everyone wants to. We are halfway into a 20-year agreement and it’s probably a good time to come together and talk about what’s working and what’s not.”
The Grizzlies declined to address either the annual payment to the U of M or the possibility of a renegotiated lease. The Grizzlies said all comments regarding the lease agreement should come from the U of M.
Attendance at U of M games has been declining. After seven straight seasons (from 2007-08 to 2013-14) of averages in the 16,000-plus range, the last two seasons have seen a noticeable fa ll. The announced attendance during the 2014-15 season was 13,915, a 13.7 percent drop. It has dropped another 16 percent this season, with an average announced attendance of 1 1 ,721 for 17 games.
The annual $800,000 payment, however, is tied to a lower number than announced attendance — turnstile count, which the contract defines as “the number of persons attending University Home Basketball Games at FedExForum on the basis of admission tickets, whether Paid Attendance Tickets , Universit y Season Complimentary Tickets, University Suite tickets, University Student Tickets or any other tickets, but exclusive of players, coaches, University Team staff, Arena staff and other persons without admission t ickets , i ncludi ng reporters, camera crews and others attending the event as part of their employment.”
With no official numbers made available from the U of M or the Grizzlies, per-game media estimates have ranged from 6,000 to 7, 500.
If the turnstile count averages more than 6,000 per game, but is less than 10,0 0 0 per ga me, t he $800,000 payment “shall be reduced for such Basketball Season in direct proportion to the shortfall,” according to the contract. Also, if the turnstile count dips below an aver- age of 6,000 per game for two consecutive seasons, the Grizzlies would have the authority to terminate the agreement.
The Grizzlies referred inquiries about the turnstile count to the U of M. The U of M legal affairs office, responding to an open-records request for those numbers, replied that “the University does not maintain the requested records.”
The U of M has received reduced payments before. For the 2004 - 05 season, then-athletic director R.C. Johnson estimated the payment at $700,000. According to reports late in the 2006-07 season, Memphis officials were again bracing for a sub-$800,000 payment.
Bowen, the current AD, wouldn’t give turnstile figures for last season, and wouldn’t say whether the annual payment was reduced. He said he didn’t know.
“There’s a n end- oft he - sea son set t lement (t he Grizzlies) provide based on a calibration set up ... before I got here,” Bowen said. “We get a whole-season report on (attendance). We get our number, we get a check and that’s what it is.”
Bowen said he couldn’t confirm the amount of last year’s check because “basketba l l revenue is folded, in my budgetary meetings, into a macro number. If you ask us what we spend in football or basketball I can tell you ‘X’ and if you ask me what we make in revenue I can tell you ‘X.’ ”
U of M president M. David Rudd said he was familiar with the language of the agreement and that it was put in place “to make the Grizzlies whole” if certain attendance minimums were not attained, but he did not have specific turnstile figures.
The Tigers’ agreement with the Grizzlies was signed in 2004 and runs through the 2023-24 season. Then-president Shirley Raines called it “a very good business deal for the university.” But the university now prefers new terms.
“We don’t receive any of the concessions or any of the revenue generated inside the arena when people attend (Tigers) games,” Bowen said. “The people who designed the agreement ... are no longer in charge. There was a different (Grizzlies) owner, a different (Grizzlies) general manager, a different (U of M) president, a different (U of M) athletic director and a different head coach (John Calipari). Everyone who was at that table — including the attorneys — is no longer there.
“Do we want to make any changes? Do we want to do more joint collaboration? We get along. They are as important a part of the city of Memphis as we are. I believe that. I don’t feel like they are my competition. I feel like they are my brother-in-law. I’d like to be more engaged with them and in what we do as two (Memphis) athletic (entities).”