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Friday, March 23, 2001
Companies see move as opportunity



The future of the NBA's Vancouver Grizzlies could come down to a simple business decision: FedEx or Kentucky Fried Chicken.

Owner Michael Heisley must decide by Monday where he wants to take his Grizzlies. Tricon Global Restaurants Inc., the parent company of KFC, and FedEx Corp. are ready to pay him millions if he chooses Louisville, Ky., or Memphis, Tenn.

"If he selects Louisville, he'll get all the free chicken – Kentucky Fried Chicken – he can eat for the rest of his life," said Jonathan Blum, a senior vice president for Tricon.

Call it the latest escalation in the war to lure relocating sports franchises, but Memphis and Louisville have enlisted two very big corporations in their bids to land the NBA team.

The companies are offering up plenty of money – they won't say how much. In return, they want more than just their corporate names in big letters on an arena.

Tricon and FedEx see an unprecedented marketing opportunity to slap their brand on the NBA team itself.

Forget the Memphis or Louisville Grizzlies. Instead, try the Kentucky Colonels, after KFC founder Col. Harland Sanders, or the Memphis Express, for the delivery company.

"There's a marketing synergy there that is very, very powerful. It would allow us to put the KFC brand into the mainstream of professional basketball," Blum said. "That's why it's important to us to associate the brand with the team in an unprecedented way that would include the name of the team the Kentucky Colonels, the old (ABA) team."

FedEx has the same thought, though it hasn't been as explicit and has kept many details of its proposal under wraps.

"We have a very broad appeal, one of the most recognizable brands in the world," FedEx spokeswoman Carla Boyd said. "I think it would all fit together."

Of course, the NBA has final say over everything involving franchise relocation, including the team's nickname.

Tricon, the world's second-largest fast food company, reportedly has offered $100 million over 20 years to name the city's proposed arena the KFC Center or The Bucket. FedEx has given Heisley a competitive "multi-tier marketing proposal."

Both companies already invest heavily in sports.

Anyone watching the NCAA tournaments this month will see ads for KFC, Pizza Hut or Taco Bell, all owned by Tricon. FedEx is the main sponsor of the CART racing series, the Orange Bowl and has its name on the home of the NFL's Washington Redskins.

Bringing an NBA team to town also allows companies to invest in the local community and keep employees happy.

Tricon has approximately 1,100 employees in Louisville, while 30,000 of FedEx's 200,000 employees worldwide call Memphis home.

New Orleans, Anaheim and the Chicago suburb of Dixmoor are the other cities trying to land the Grizzlies.

How helpful such corporate support is remains to be seen.

The man who helped turn the NFL's Houston Oilers into the Tennessee Titans thinks the biggest challenge is who pays for the arena.

Phil Bredesen was Nashville's mayor when he arranged the city's $292 million package to build a new football stadium. The Titans landed their own naming deal after the stadium was built.

"The whole game will come down to whether they can finance an arena and make an attractive enough economic deal ... that it's the best deal for the owner to move it there," he said.

Neither group has detailed its plans to pay for an arena, but most of the money would come from the issuance of local bonds.

Tennessee, despite a budget shortfall, appears ready to contribute up to $70 million for Memphis. Kentucky has offered to create a special tax district around the arena to repay construction bonds, but the team must agree to become the Colonels.

With Monday looming as Heisley's deadline from the NBA, the bidding for the Grizzlies has turned into a race to the finish line with Memphis and Louisville trying to outdo the other.

When Memphis, led by AutoZone founder J.R. "Pitt" Hyde III, announced it had investors ready to buy minority ownership, Louisville rounded up its own. Memphis has commitments for more than half its planned 70 luxury suites costing $110,000 each, so Louisville began a push to line up suite buyers.

"There's a full-court press on right now," Blum said. "We're doing everything we can here behind the scenes to lay the foundation for his success here in Louisville."

Unless, of course, it's FedEx that helps deliver the Grizzlies to Memphis.

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