University of Memphis finalizing FedExForum lease extension. How it will differ from original deal

The University of Memphis is in the process of finalizing a two-year extension of its FedExForum lease agreement with the Grizzlies, new athletic director Ed Scott told The Commercial Appeal.

The original deal — which was signed in 2004, the same year the arena opened and the same year the Tigers made it their home court — expired on April 30.

Scott, who was hired in June when Laird Veatch left to become Missouri’s AD, said the planned FedExForum renovation project is the primary rationale for the short-term extension.

“We both agreed (it) would make the most sense for both sides fiscally,” said Scott. “Because, what it’ll do, it’ll allow us to figure out what these renovations are going to look like.”

The Grizzlies declined to comment.

The renovation conversation was broached in 2022 as an effort to keep the Grizzlies in Memphis long-term. The Grizzlies’ current lease agreement with FedExForum expires after the 2028-29 NBA season. The project is estimated to cost $550 million.

One of the most prominent clauses in the Tigers’ expired lease agreement was the university’s attendance-based guaranteed payment. According to the terms of the original agreement — obtained by The Commercial Appeal through an open records request — Memphis would receive $800,000 for each season the Tigers drew an average actual attendance (fans through the turnstiles) of 10,000 or more for home games. If that number was less than 6,000 in any season, Memphis would not have received a guaranteed payment.

That will change under the terms of the two-year extension, Scott said. He declined to offer specifics since the long-form contract has not been signed.

“You’ll see something a little different about the gate,” he said. “It won’t be attributed to the gate the same way it was before. Less about us hitting certain numbers and more about us probably giving them a certain amount and getting a certain amount from them.”

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Last season, the Tigers averaged 6,827 tickets scanned at the turnstiles across 17 games at FedExForum. The closest the program has come to the 10,000 actual attendance benchmark since Penny Hardaway became coach in 2018 was his first season, when it drew 8,813 per home game.

Scott said he intends to eventually sign a long-term lease agreement that would keep the Tigers at FedExForum well beyond the 2025-26 season.

“But I wanted to make sure that both sides feel good about it, and I thought the best way to do it was to get through a two-year extension,” he said. “You know, give us a gap so we can make some more informed decisions moving forward.”

Memphis opens the season at FedExForum against Missouri (Nov. 4).

Reach sports writer Jason Munz at jason.munz@commercialappeal.com or follow him @munzly on X, the social media app formerly known as Twitter.

This article originally appeared on Memphis Commercial Appeal: University of Memphis finalizing FedExForum lease extension. How it will differ from original deal