Houston Rockets Sold For $2.2B
Photo: fansided.com
The Houston Rockets made a huge change by adding Chris Paul to their line-up last July. Now they’ve made a much bigger change by changing team owners.
The Rockets announced on Tuesday that the franchise has been sold to Houston billionaire Tillman J. Fertitta. No amount was mentioned in the statement but ESPN’s Adrian Wojnarowski reported that the sale was made for a record $2.2B.
The sale comes barely two months after Leslie Alexander put his NBA franchise on the market and a week after he made a $10M donation to the Hurricane Harvey Relief Fund started by Houston Mayor Sylvester Turner.
Worn Down
Photo: houstonchronicle.com
In July, the 73 year old Alexander revealed that he was giving up the tedious task of running an NBA ballclub to focus on philanthropic efforts. Rockets’ CEO Tad Brown, who made the official announcement on July 17th, said that Alexander told him that ownership had ‘wore him down after decades.’
Alexander steered the Rockets to back to back NBA titles in his first two seasons as team owner in 1994 and 1995. But since then, he has spent more than two decades trying to get his team back to the top of the NBA. His efforts included bringing in superstar players like Charles Barkley, Scottie Pippen and Steve Francis and Tracy McGrady. They achieved playoff success but have never been able to replicate their title winning ways.
Skyrocketing Potential
Photo: sportingnews.com
This summer, Alexander brought in another marquee name in Chris Paul when he traded for the All-Star point guard. The Rockets have not had a season record below .500 since 2006 and have made the playoffs in the last five seasons. Last season, they won 55 games behind the rise of James Harden who averaged a spectacular 29.1 points, 11.2 assists and 8.1 rebounds per game.
With Harden recently signing a mammoth $228M five year extension for the Rockets, the team adding Chris Paul to the line-up this summer and the possibility of the New York Knicks’ scoring machine Carmelo Anthony joining them, the Rockets’ potential on the court is skyrocketing. The same can be said of its commercial value.
Record Breaking Sale
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Earlier this year, Forbes estimated the Houston Rockets were worth $1.65B. That means that the final selling price of $2.2B is around $600M higher. The Rockets’ price tag also sets a new bar for selling NBA franchises. It established a new NBA record which is $200M higher than the previous all-time high of $2B Microsoft CEO Steve Ballmer paid for the Los Angeles Clippers in 2014.
Interestingly, ESPN says that Tillman Fertitta tried to buy the Rockets in 1993 but his $81M offer fell a couple of millions short of Alexander’s winning bid of $85M. 24 years later, Alexander is making a huge mark-up from his original investment while Fertitta will be forking out 16 times more than what he originally bid for the franchise.
Beating Beyonce
Photo: golfdigest.com
When Alexander first put the ‘For Sale’ tag on the Rockets, several celebrities threw their hats on the arena. Former franchise player Hakeem Olajuwon expressed his intention to invest in the Rockets. Music superstar and mogul Beyonce was another popular name who reportedly was considering to buy the team.
Beyonce’s husband, Roc Nation Sports owner and rapper Jay-z, was a former minority owner of the Brooklyn Nets. Queen Bee was even photographed donning a Chris Paul Rockets’ jersey a couple of days ago, fueling speculations that she was indeed serious in her bid to become an NBA team owner. But she was beaten to the draw by someone who wasn’t a first-timer himself.
Not The First Time
Photo: businessinsider.com
This is not the first time that Fertitta has owned a major sports franchise. He was an original investor in the NFL’s Houston Texans franchise but was forced to let go of his stake in 2008 because of an NFL rule prohibiting ownership in involvement with gambling companies.
Unlike the NFL, casino ownership is not an issue with the NBA as other team owners have known casino investments. An example is Cavs’ owner Dan Gilbert who is chairman of JACK Entertainment ( formerly Rock Gaming ) which operates several casinos in Michigan and Ohio. So after missing out on the Rockets two decades ago and letting go of the Texans almost a decade ago, Fertitta is a team owner once again.
Dream Come True
Photo: si.com
In a statement, Fertitta called it a life-long dream to be the Rockets’ 10th owner.
"I am truly honored to have been chosen as the next owner of the Houston Rocke. This is a life-long dream come true. Leslie Alexander has been one of the best owners in all of sports, and I thank him immensely for this opportunity. He has the heart of a champion. Lastly, out of respect for the NBA's approval process, I can say no more other than I am overwhelmed with emotion to have this opportunity in my beloved city of Houston."
For his part, Alexander believes that the Rockets are in good hands with another Texan:
"I am excited to welcome and pass the torch to Tilman. He is a Houstonian, business leader and committed to the success and excellence of the Rockets both on and off the basketball court.I have personally known Tilman for over 24 years and don't think I could have found anyone more capable of continuing the winning tradition of our Houston Rockets."
Bubba Gump Shrimp Co.
Photo: nrn.com
The 60 year old Fertitta was born in Galveston, Texas and resides in Houston. He graduated from the University of Houston. According to Forbes, his net worth is $3.1B. He amassed his wealth from a handful of investments. He is the owner of the Golden Nugget Casinos, Landry’s Inc, Kemah Boardwalk and the popular Bubba Gump Shrimp Co.
In 2015, Forbes called him the ‘World’s richest restaurateur’. Now he adds ‘NBA team owner’ to his growing list of titles. Fertitta sits on the University of Houston’s Board of Regents. Last year, Fertitta donated $20M to help renovate the school’s basketball arena. Now he is at the helm of Houston’s premier basketball squad.
ESPN’s Adrian Wojnarowski reported:
Sources: Leslie Alexander has agreed to a deal to sell team to Houston billionaire Tilman Fertitta for NBA record sales price of $2.2B.
— Adrian Wojnarowski (@wojespn) September 5, 2017
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