Though the financial status of Houston Rockets owner Tilman Fertitta has been a hot topic during the COVID-19 pandemic, he insists that selling a stake in the basketball franchise has never been considered.
Fertitta has furloughed thousands of workers at his non-Rockets businesses, which are largely comprised of the Golden Nugget casino chain and restaurants run under the Landry’s Inc. umbrella. In April, he offered a very high loan rate for those businesses.
But Fertitta, who bought the Rockets in September 2017 for $2.2 billion, says the Rockets operate “in a silo.” In a new story posted Saturday, CEO Tad Brown tells CNBC that selling anything involved with the Rockets has never been and will never be a consideration for Fertitta.
Though his latest move is described as insurance, it raised red flags for sports investors. One banker hinted Fertitta offering such a high return signals shares of the Rockets could become available should he need more liquidity to protect his businesses.
The Rockets did not make Fertitta available for an interview, but he told Bloomberg about an offer to “sell 50% of the Rockets for $1 billion and the answer was no.”
Rockets CEO Tad Brown spoke to CNBC, adding Fertitta is “not looking to sell and he’s never even considered it, and that’s not something he’s going to consider in the future.”
New read: Tilman Fertitta said he was offered $1 billion for 50% of #Rockets and said no.
“He’s not looking to sell and he’s never even considered it,” team CEO Tad Brown told me.
But other sports ownership opportunities are available #Sportsbiz #CNBC https://t.co/YKro39kU19
— Jabari Young (@JabariJYoung) May 2, 2020
Speculation picked up after reports emerged earlier this week that the San Antonio Spurs — Houston’s in-state and division rival — are looking to sell a small minority ownership stake in the team.
But signals from Houston are that a similar move isn’t in the cards for them. For what it’s worth, the rumored bid of $1 billion for a 50% stake in the Rockets would be just under the valuation Fertitta committed to when he purchased the team in late 2017 — when 50% was $1.1 billion.
Though all NBA owners have felt at least some financial effects due to the pandemic, Fertitta appeared to be disproportionately impacted given the nature of his businesses (entertainment, restaurants, and hospitality). However, the gradual reopening of Texas could ease that pain.
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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