Rockets owner Tilman Fertitta warns of extended economic crisis

Fertitta hopes government authorities will soon allow restaurants and casinos to operate at limited capacity to soften the economic impact.

Houston Rockets owner Tilman Fertitta says he’s had to temporarily lay off about 40,000 workers across his businesses to limit economic damage from the coronavirus (COVID-19) outbreak and associated shutdowns.

Bloomberg‘s Davide Scigliuzzo reports that Fertitta’s companies have furloughed about 70% of their employees amid the COVID-19 pandemic, which has stopped travel and large gatheringsaround the world.

Fertitta, who owns the Golden Nugget casinos and numerous restaurants under the Landry’s Inc. umbrella, hopes that government authorities allow businesses to reopen at a limited capacity within “a few weeks.”

Scigliuzzo reports:

“I think what we are doing with the shutdown is good, but in a few weeks, people will need to be around people,” Fertitta said in an interview with Bloomberg on Tuesday. “Otherwise you are going to go into an economic crisis that is going to take us years to dig ourselves out of.”

He said restaurants and casinos could be allowed to operate at 30% to 40% of capacity to soften the economic impact of the restrictions and allow companies to stay in business.

While many of his restaurants are still offering takeout food, Fertitta told Scigliuzzo that those restaurants are only bringing in between 4% and 5% of their typical business. Meanwhile, casinos are closed entirely.

“We are doing basically no business,” said Fertitta, who added that his company is burning through a few million dollars of cash per day. “I want to hire every employee back. This is very hard on a lot of working families, but we have to survive, or there is no company.”

The Rockets are currently projected to have the NBA’s No. 6 payroll for the 2020-21 season at more than $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 will feel at least some financial effects due to the pandemic, Fertitta could be disproportionately impacted given the nature of his businesses (entertainment, restaurants, and hospitality).

[lawrence-related id=27288,27246]