Per Marc Stein of ESPN,
This is a shocker to most. After his solid play in the postseason it was widely expected that Jerryd Bayless would opt out of his deal and test the market to see where his value lied. Similar to Jarrett Jack and Nate Robinson, Bayless' postseason play supposedly "played himself out of Memphis' price range". There were also rumors that former Griz coach Lionel Hollins and Bayless didn't get along (remember shovegate?). With the hiring of David Joerger, that may have been enough for Jerryd to return to the team without going through a bidding process.
Bayless will return as the backup shooting guard playing the sixth man role. After a rough start of being pushed as a back-up point guard, the trade with the Cleveland Cavaliers forced Jerryd into the shooting guard role where he thrived the most.
Last season Bayless averaged 8.7 points, 3.3 assists and 2.2 rebounds per game as the sixth man on the Griz.With Jerryd back, Memphis front office can now focus on re-signing starting guard Tony Allen who is an unrestricted free agent this summer.