Houston Rockets owner Tilman Fertitta, who also owns the Landry’s restaurant group and Golden Nugget casino chain, said late Friday in a new interview with Fox News that at least some components of the U.S. economy need to reopen in May.
It is unclear whether he was referring to the NBA, which — like many U.S. businesses — has been on hiatus since March 11 due to the coronavirus (COVID-19) pandemic. Unemployment claims across the country have skyrocketed by close to 17 million since, and nearly 20,000 Americans had died from COVID-19 as of Saturday morning.
During the interview, Fertitta said he initially believed the mid-March shutdown of the City of Houston to nonessential businesses was “premature,” but he now believes it was the correct call.
Fertitta’s comments:
When they shut down the city of Houston, I thought it was premature. But they were 100% right, and we’ve got to do this to the end of this month, and we’ve got to start opening up in May, not only on the financial side, but the mental health side is huge. I talked with so many people that say, ‘Hey, I just want to come back to work. I’ll do anything, but I’ve got to get out of my house.’ We are all struggling. We are all struggling.
Several leading health models project the current wave of COVID-19 to peak in April, but many government officials have said that more testing infrastructure needs to be in place before re-opening to prevent a resurgence of the virus. Thus, few have committed to an exact date.
U.S. Treasury Secretary Steven Mnuchin told CNBC on Thursday that he believes companies could reopen in May as long as President Donald Trump “feels comfortable with the medical issues.”
Fertitta, who said he had to furlough about 45,000 employees due to the pandemic, was asked in the interview about his cash situation and what he needs to sustain it. (Earlier this week, a report said Fertitta would pay a record rate for a $250-million loan for his non-Rockets businesses.)
In response, Fertitta said he “did some finances this week” that would take him to the end of 2020. His full commentary:
This is what people don’t understand, is we all pay today, yesterday’s bills with today’s money. And when we just got shut down in a 48 hour period, you still have a payroll and severance, $100 million for me because my payroll is $1.5 billion a year. Which is done now, but my cash burn today is still $2 million a day, which is unfathomable, but that’s why we’ve got to stay liquid. I went out and did some finances this week that will take me to the end of the year.
Billionaire Restaurant CEO Tells Fox News He Did His 45,000 Employees a 'Favor' by Furloughing Them Quicklyhttps://t.co/vTSF5v51Ki
— Mediaite (@Mediaite) April 11, 2020
A complete video of Fertitta’s interview from Friday night, along with additional transcriptions, is available via Mediaite. “It’s like a sci-fi movie that you would never believe,” Fertitta said.
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. While Fertitta has not warned of any financial consequences for the basketball franchise due to the pandemic, it’s a storyline worth monitoring if his businesses are not allowed to reopen in the coming weeks.
Though all NBA owners are feeling at least some financial effects due to the pandemic, Fertitta could be disproportionately impacted given the nature of his businesses (entertainment, restaurants, and hospitality).
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