Fertitta Confirms He Has No Interest In Selling Shares Of Rockets
Reports over the last couple months have suggested that Rockets owner Tilman Fertitta has been one of the NBA team owners hit hardest by the coronavirus pandemic. Many of Fertitta’s hundreds of businesses are restaurants, casinos, and entertainment destinations that have been closed since stay-at-home orders began.
However, speaking to Sam Amick of The Athletic, Fertitta insisted that any concerns about his financial situation have been overstated.
“I have cash flow to last me a long, long time with no restaurants opening. But yet, by this weekend, I’m going to have over 200 (restaurants) open and almost all my hotels open,” Fertitta said, referring to Texas’ stay-at-home mandate being lifted. “Different people are in different situations, and what people don’t understand is I have more buckets than most.”
A report last month indicated that Fertitta has no interest in gaining additional liquidity by selling any portion of the Rockets and taking on minority stakeholders. The Rockets’ owner confirmed as much in his conversation with Amick, stressing that he’s also not entertaining the idea of selling the franchise outright.
“The Rockets would never be sold, unless the whole world came to an end and then it wouldn’t matter, OK?” Fertitta said. “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.
“… I don’t need partners so I don’t have partners,” he added. “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%, and there’s no reason to ever change that.”
Davide Scigliuzzo of Bloomberg reported last month that Fertitta’s companies had furloughed more than half of their employees. However, while his other businesses and their workers were impacted significantly by the coronavirus pandemic, Fertitta tells Amick that the Rockets haven’t had to lay off a single employee or force anyone to take a pay cut, even after Daryl Morey‘s tweet supporting Hong Kong protestors in the fall cost the franchise significant sponsorship money in China.
“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.”
Southwest Notes: Mills, Fertitta, Grizzlies
Although the Spurs were having a disappointing season before the NBA’s hiatus began, Patty Mills was enjoying one of the best years of his career, averaging a career-high 11.7 PPG. Mills, who will be entering the final season of his four-year, $50MM contract in 2020/21, has been “worth every penny” of that deal due to his play on the court and his locker-room contributions, in the view of Jeff McDonald of The San Antonio Express-News.
As McDonald writes, Mills’ future beyond next season remains unknown, but no player on the current roster embodies the “Spurs Way” like Mills, so the club will be glad to keep him around at least through the end of his deal.
- Rockets owner Tilman Fertitta has been “absolutely devastated” financially over the last several months, ESPN’s Brian Windhorst said on a Hoop Collective podcast. As Windhorst explains, Fertitta is believed to have lost “tens of millions” of dollars in Chinese sponsorships as a result of the Daryl Morey controversy in the fall, and his hotel and casino businesses have been shut down as a result of the coronavirus. Windhorst notes that it’ll be interesting to see how the Rockets handle their payroll going forward, considering they’ve already been tax-averse since Fertitta’s arrival.
- In a Q&A with Michael Wallace of Grizzlies.com, Grizzlies president Jason Wexler spoke about how his role and responsibilities have changed during the NBA’s hiatus, how the team’s employees have been impacted, and his thoughts on an impressive season from his young team.
- Justise Winslow‘s Memphis debut and Marc Gasol‘s return to the FedExForum are two of the notable Grizzlies-related events that may no longer happen in 2019/20, with the rest of the season up in the air, writes Evan Barnes of The Memphis Commercial Appeal.
Rockets’ Owner Unwilling To Sell Minority Shares?
Tilman Fertitta, the sole owner of the Rockets, won’t consider minority partners “as a matter of pride,” tweets ESPN’s Tim MacMahon.
MacMahon’s note on the Rockets owner comes at a time when Fertitta’s companies have furloughed approximately 70% of their employees, according to Davide Scigliuzzo of Bloomberg. Fertitta, who owns a series of casinos, hotels, and restaurants, said he has had to temporarily lay off approximately 40,000 employees as a result of coronavirus-related shutdowns.
Indicating that he wants to “hire every employee back,” Fertitta expressed confidence that his businesses will survive and even talked about possibly buying back some of the Golden Nugget’s debts when things turn around, per Bloomberg’s report.
Fertitta, who is hoping that restaurants and casinos will soon be permitted to operate at least at partial capacity, said he has been talking to banks about raising as much as $200MM in additional liquidity “as a little bit of insurance,” Scigliuzzo writes.
Selling off part of the Rockets to one or more minority stakeholders at any time since he assumed control of the team in 2017 would have helped provide Fertitta with additional liquidity, but he has long been averse to the idea. In October 2017, shortly after he took the reins in Houston, he indicated he might make an exception for pop star Beyoncé, who had previously considered an investment in the franchise. Otherwise though, he said, “I prefer to own 100 percent.”
Fertitta, who has appeared reluctant to pay the luxury tax since taking over as the Rockets’ owner, figures to be hit particularly hard by the NBA’s loss of revenue this season. Houston was believed to be the team with the most partnerships in China prior to Daryl Morey‘s tweet in support of protestors in Hong Kong, which reportedly cost the team many of those business ties.
Rockets Owner Talks Playoffs, Westbrook, Small-Ball
After averaging nearly 58 wins over the past three seasons, Houston is on a slightly more modest 53-win pace in 2019/20. However, after winning eight of their last 10 games, the Rockets are once again in position to claim home-court advantage in the first round of the postseason, having moved up to No. 4 in the Western Conference.
That recent strong play – along with the success of a new-look lineup that leans heavier than ever on small-ball – has Rockets owner Tilman Fertitta expressing confidence about the club’s outlook going forward. Speaking to Kirk Bohls of The Austin American-Statesman, Fertitta said he thinks the Rockets could be the No. 2 seed if not for a handful of hard-luck losses, adding that he’s “not worried about anybody in the West.”
As Fertitta explained, that doesn’t necessarily mean he’s counting on the Rockets to make it to the NBA Finals, but he’s confident that the team is capable of beating any Western club in a seven-game series.
“I think Milwaukee is head over heels above everybody else,” Fertitta said. “We just need to get home court for the first and second rounds and see what happens.”
Here are a few more of Fertitta’s thoughts on how the Rockets stack up in the West, the blockbuster trade the team made last summer, and the extreme small-ball look:
On the Western Conference playoff picture:
“None of us fear L.A. (the Lakers) or the Clippers or Denver like we feared Golden State. It’s not like how we were scared of them. We could easily win the West this year or get knocked out in the first round. Both L.A. teams, Denver, Houston, we’re all excellent teams. Just comes down to somebody gets hot and makes a shot. Our chances are as good as they’ve ever been.”
On the Chris Paul/Russell Westbrook trade, and why Westbrook is a better match for James Harden:
“Everything worked out. I think Chris is having a great year at Oklahoma City. It worked out for both (teams). James and Russell came in the league at the same time, and they can talk to each other differently. One can say, ‘Screw you,’ and it’s no big deal. Chris was four years older. Four years in basketball is like a normal 10 to 15 years in business life.”
On the Rockets going all-in on small-ball:
“We basically changed out a guy who’s 6’10” to a guy who’s 6’7″, 6’8″. Are you really that much smaller? It makes the big guy for the other team go out on the perimeter. Did you see Rudy Gobert trying to keep up with Russell? Russell was running him around like crazy. It’s working.”
Rockets Tried To Trade For DeAndre Jordan
The Rockets attempted to add the Nets to their four-team trade this week, hoping to acquire center DeAndre Jordan, ESPN’s Adrian Wojnarowski reveals in an Instagram video.
Brooklyn turned down the offer and elected to hold onto the veteran center, but Wojnarowski’s report indicates two things about the Rockets. The team may not have intended to fully commit to the small-ball approach it has used since trading away Clint Capela, and owner Tilman Fertitta was apparently willing to back up his statement that moves won’t be determined by the luxury tax.
Jordan makes $9.88MM this year and is signed for the next three seasons at a total cost of about $30MM. He’s coming off the bench for the Nets and averaging 7.9 points and 9.6 rebounds per night.
Because of how the trade was structured, the Rockets had the flexibility to add up to $12MM in salary before it was finalized. Fertitta gave general manager Daryl Morey the freedom to expand the deal, Wojnarowski adds, even though it would have cemented Houston as a taxpaying team.
Woj doesn’t say what the Rockets were offering the Nets in terms of players and draft picks.
Rockets Not Motivated By Luxury Tax Concerns?
FEBRUARY 4: Contradicting his original report, Young tweets that he’s been told that Fertitta has given Morey the go-ahead to make deadline deals without financial restrictions. The Rockets’ owner isn’t satisfied with the team’s place in the standings so far and wants to upgrade the roster, Young adds.
While that may be true, Houston is close enough to the tax line that it still wouldn’t be a surprise if the club ducks below it in the coming days.
FEBRUARY 3: The Rockets are looking to shave enough salary off their payroll to avoid the luxury tax, Jabari Young of CNBC.com reports.
The Rockets have been actively engaged in trade talks, most notably dangling center Clint Capela, who is in the early stages of a five-year, $90MM contract. Moving Nene, who has a non-guaranteed $10MM salary for next season, would also contribute greatly toward that goal. The Rockets have approximately $139.9MM in contractual obligations and owner Tilman Fertitta wants to get below the $132MM tax line.
Some league executives believes Rockets GM Daryl Morey is being pressured by Fertitta to decrease salary while simultaneously trying to keep the franchise in championship contention, according to Young.
Fertitta has denied in the past that he’s motivated by luxury tax concerns but the team’s moves the past two years have the look of a franchise trying to dodge the tax, Dan Feldman of NBC Sports notes. The way Houston’s 2018 offseason played out, and the curious moves it make prior to last year’s trade deadline, had the appearance of a team with tax concerns, Feldman continues.
Players like Gerald Green, Thabo Sefolosha and Tyson Chandler making the veteran’s minimum could be traded and replaced by players making partial-season minimums, Feldman notes. By tossing in assets to move contracts, the Rockets will hinder their chances of upgrading the team, Feldman adds.
Latest On NBA/China Controversy
The storyline that dominated NBA headlines during the preseason has fallen off the radar to some extent with the regular season underway, but that doesn’t mean league and team executives aren’t still concerned about the NBA’s relationship with China.
League sources tell Kevin Arnovitz of ESPN.com that NBA leadership is monitoring the trade negotiations between the United States and China in the hopes that a resolution on that front will help thaw the league’s relationships in its “most profitable foreign market.” Those relationships have been frosty since Rockets general manager Daryl Morey published a tweet supporting pro-democracy protestors in Hong Kong.
Tencent – the NBA’s streaming partner in China – has resumed broadcasting games, but still isn’t showing Rockets contests, as Arnovitz details. Meanwhile, China’s state-run network CCTV hasn’t shown any regular season games at all. While the NBA has remained in contact with CCTV officials, there’s no sense of when the impasse may be resolved.
Arnovitz’s full story at ESPN.com provides an exhaustive, in-depth look at where things stand between the NBA and China, and is worth reading in full. Here are a few more highlights from the report:
- Terminated sponsorships with Chinese companies have affected teams around the NBA, not just the league itself, according to Arnovitz, who hears that one club immediately reduced its 2019/20 projections for revenue derived from Chinese sponsorships to zero. The Rockets have been hit particularly hard, having lost $7MM+ in cancelled sponsorship agreements for this season, and $20MM overall once multiyear deals are taken into account.
- Beyond the financial ramifications, some NBA front offices have been “shaken by the turmoil” caused by the drama with China, league sources tell ESPN. As Arnovitz explains, the league has enjoyed increasing revenues and positive media coverage for years, but the China controversy has tested the idea that any issue can be managed.
- Many team executives would like the league to establish guidelines for dealing with potentially sensitive political topics, since teams and players will likely have to answer those questions in the future — especially on trips to China and India, among other countries. League sources have acknowledged the need for those guidelines, Arnovitz says.
- Rival executives don’t expect this controversy will impact Morey’s ability to do his job. However, sources close to the Rockets view the marriage of Morey and team owner Tilman Fertitta as a “tenuous fit,” according to Arnovitz. Fertitta has been more averse to paying the tax than his predecessor Leslie Alexander was, and quickly denounced Morey’s tweet last month, announcing that the GM’s views didn’t reflect that of the organization.
Tilman Fertitta Never Considered Discipline For Daryl Morey
In the latest news on the NBA’s ongoing controversy with China, Sopan Deb of The New York Times writes that Rockets owner Tilman Fertitta, despite publicly distancing himself and his franchise from the now-famous tweet by general manager Daryl Morey, never considered firing or even punishing Morey.
Interestingly, however, there was no explanation as to why Fertitta began liking posts on Instagram supportive of Morey’s firing then, but Fertitta did explain why he was – and still is – not okay with Morey’s tweet.
In a written explanation, Fertitta said that he needed to initially distance the Rockets from Morey because he “felt it was important to make the distinction between Daryl speaking as a private citizen and Daryl as a representative of the Houston Rockets… (and the Rockets) have never commented on another country’s foreign policy.”
Deb notes, however, that Fertitta himself has been willing to speak on politics before without distancing the Rockets from his views. Accordingly, Fertitta was asked whether he’d be comfortable with his employees publicly voicing their political views in the future. He declined to comment.
China Suspends Ties With Rockets After Daryl Morey Tweet
A tweet by Rockets general manager Daryl Morey has pushed the team into an international incident, explains an ESPN story.
The Chinese Basketball Association announced this morning that it will suspend cooperation with the Rockets after Morey expressed his support for protesters in Hong Kong who are demanding democratic reforms. Morey’s now-deleted tweet read, “Fight for Freedom. Stand with Hong Kong.”
On its Weibo account today, the CBA blasted Morey for “improper remarks regarding Hong Kong” and expressed “strong opposition” to his statement. The controversy comes as the Rockets are in Japan for a pair of games with the Raptors.
China has maintained a close relationship with the Rockets ever since current CBA Chairman Yao Ming was drafted by Houston in 2002. The Rockets wear an alternate jersey that features Chinese lettering, and James Harden conducted a promotional tour of the nation this summer.
China is also an extremely important market for the NBA as it expands its overseas popularity. It has become the nation’s most popular foreign sports league, with China playing host to the World Cup last month.
Among those reacting to Morey’s tweet when it appeared Friday was Rockets owner Tilman Fertitta, who stressed that the franchise should not serve as a platform for political views.
“Listen….@dmorey does NOT speak for the Houston Rockets,” Fertitta tweeted. “Our presence in Tokyo is all about the promotion of the NBA internationally and we are NOT a political organization.”
Fertitta stressed to ESPN that he still has full confidence in Morey as a GM and the incident won’t affect his job security.
“I have the best general manager in the league,” Fertitta said. “Everything is fine with Daryl and me. We got a huge backlash, and I wanted to make clear that the organization has no political position. We’re here to play basketball and not to offend anybody.”
Rockets Notes: Westbrook, Harden, Anthony, Mbah a Moute
Scouts and assistant coaches from rival teams are skeptical that the Rockets‘ Russell Westbrook–James Harden backcourt pairing will work, Sean Deveney of Heavy.com reports. There is widespread doubt that the two stars will blend their games offensively since Westbrook is poor 3-point shooter and prefers to play at a different pace than Harden. Many of those interviewed also predicted the Rockets’ perimeter defense will decline.
“They’re both hardheaded guys and we know Harden’s history with other players there,” one scout told Deveney.
We have more on the Rockets:
- Owner Tilman Fertitta said he never met Carmelo Anthony and was surprised that his staff decided to part ways with the longtime All-Star after just 10 games last season, he told Ian Begley of SNY. “Basketball ops decided to make a decision and, you know, it kind of surprised me too, as a fan of the Houston Rockets. But I know what I know and I know what I don’t know. And if my basketball ops thought that we should move on, then I sure wasn’t going to tell them not to, even though I thought that Melo’s one the greatest players to ever play the game.”
- It isn’t out of the question that Luc Mbah a Moute will eventually sign with the Rockets, according to Kelly Iko of The Athletic. Currently a free agent, Mbah a Moute decided not to attend a team mini-camp for veteran free agents in Las Vegas. The team had conversations with him over the summer about a possible return but there was lingering doubt about the health, Iko continues. Though the team subsequently signed Thabo Sefolosha, adding Mbah a Moute to shore up wing depth would be ideal, Iko adds.
- The addition of Sefolosha became official on Monday. Get all the details here.