While the NBA is said to be considering creating an investment vehicle to allow private equity firms to buy limited partnership stakes in its teams, Houston Rockets owner and local billionaire Tilman Fertitta says he isn’t interested in such an arrangement for his franchise.
Though Fertitta has furloughed thousands of workers at his non-Rockets businesses due to the COVID-19 pandemic, he’s made clear that the economic downturn is not affecting the basketball team.
Here’s what he told Sam Amick of The Athletic this week:
The Rockets would never be sold, unless the whole world came to an end and then it wouldn’t matter, okay? If I ever sell the Rockets, it’s because we don’t exist anymore as a country with the rule of law. We’re having anarchy in the street, and at that point there’s no buyers.
Rockets team owner Tilman Fertitta has heard the constant rumblings about him being under financial duress due to his ownership stakes in casinos and restaurants during a global pandemic.
He set the record straight in a conversation with @sam_amick 👇https://t.co/MfNHCgzUqq pic.twitter.com/boQMxj1azy
— The Athletic NBA (@TheAthleticNBA) May 1, 2020
On Thursday, reports emerged that the San Antonio Spurs — Houston’s in-state and division rival — are poised to sell a small minority ownership stake in the team. In his chat with Amick, Fertitta made clear that he has no interest in any similar sale involving the Rockets.
There’s a reason that I made it through the ’87 financial crisis, and 2000, and the 2007 (recession), because I’ve always kept so much liquidity. It’s just like me borrowing $300 million a few weeks ago (at a steep rate of 13 percent, according to The Houston Chronicle), when I was able to do it when nobody else could at first. …Why not buy even more insurance? I have a huge amount of liquidity, and a lot of different sources of income. I’m not happy right now [with the financial impact], but I haven’t taken an equity partner, I didn’t have to give up warrants to borrow money.
I don’t need partners, so I don’t have partners. There’s just no interest in having partners. I think all owners would love not to have partners, but not all teams financially can do that. I have the opportunity that me and my family can own this team 100 percent, and there’s no reason to ever change that.
As evidence of his financial standing, Fertitta pointed to the fact that the Rockets have not had any layoffs or pay cuts as a result of the COVID-19 crisis, and they also haven’t sought outside financial assistance. That’s something many other sports franchises, including in the NBA, can’t say.
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Fertitta explained to Amick that the Rockets operate “in a silo” of their own that is entirely separate from his restaurant and casino businesseses, which run under the Landry’s Inc. and Golden Nugget umbrellas.
“The Rockets have no problem,” Fertitta said. “The Rockets are sitting on a huge revolver and a bunch of cash right now. And the Rockets are able to build up cash, because nobody has to take it out to live on.”
The Rockets are currently projected to have the NBA’s No. 6 payroll for the 2020-21 season at over $130 million in total salary.
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