[NY Times] The Houston Rockets Are for Sale, and They Will Not Be Cheap

article claims the Rockets are among the best-managed teams in the league. #mediaconspiracy
https://nyti.ms/2uttLAu

The Houston Rockets Are for Sale, and They Will Not Be Cheap
By KEVIN DRAPER JULY 17, 2017

The Houston Rockets are for sale, the team’s president, Tad Brown, announced Monday, sending shockwaves across the N.B.A. and fueling speculation that the team could draw the highest price ever paid for an American sports franchise.

The sale of the Rockets — a stable franchise with two superstars that is coming off a successful season — could be the perfect storm for a record sale in the league. The N.B.A. is already awash with a gushing stream of revenue, and the Rockets are in the country’s fourth-most populated city and have a huge toehold in China, as well.

How much the Rockets will ultimately sell for is anybody’s guess, but it will not be cheap. Forbes estimates that the Rockets are the N.B.A.’s eighth-most valuable franchise and calculates they are worth $1.65 billion. Forbes’s valuations, it should be noted, are just estimates, and 10 months before the Los Angeles Clippers were sold for a record $2 billion, Forbes estimated the team was worth just $575 million.

Brown said there was no timetable for the team’s sale, but that they would not rush the process. Leslie Alexander, the team’s owner, said in a statement, “I’ve made this decision after much deliberation with my family and friends, and do so knowing the franchise is in great shape with the players, coaches and management team in place.”

Alexander, 74, bought the Rockets 24 years ago for $85 million. Alexander made his wealth through investing, but with a sale that could bring 20, 30 or even 40 times the amount he paid for the team, buying the Rockets may have been his savviest investment of all.

That is not a surprise in itself, as professional sports franchises in the major American sports have almost always risen in value, often astronomically. In one of the most extreme examples, Donald Sterling brought the San Diego Clippers for about $13 million in 1981. When he was forced to sell by the N.B.A. 33 years later in Los Angeles, Steve Ballmer, former Microsoft chief executive, bought the team for $2 billion.

Compared with large, publicly traded companies, Ballmer told ESPN’s Ramona Shelburne, with an N.B.A. team “there’s much less risk.“

He added: “There’s real earnings in this business. There’s real upside opportunity.” (Not mentioned was the potential for Ballmer to receive tax breaks of as much of $1 billion for the purchase, making the price more palatable.)

But even recent purchases of some of the league’s less appealing franchises, like the Atlanta Hawks and the Milwaukee Bucks, have been staggering. The Hawks, along with operating rights to their arena, sold for $850 million in 2015, and the Bucks for $550 million in 2014.

The rise in N.B.A. franchise values is fueled in part by the explosion of television money. Three years ago, the N.B.A. signed a nine-year, $24 billion broadcast agreement with ESPN and Turner Sports. With an annual value of $2.66 billion, the deal nearly tripled the league’s annual revenue from its previous agreement, signed in 2007 — and that did not even account for each team’s separate, local television deal.

TV ratings for the last three N.B.A. Finals, all of which featured the Golden State Warriors and the Cleveland Cavaliers, have been the highest since Michael Jordan was winning championships in the 1990s. The N.B.A. set an attendance record last season, for the third straight year, and is making inroads internationally.

There are also the factors of scarcity and novelty. Any billionaire can buy a Los Angeles mansion or a private plane, but only 30 of them can own an N.B.A. team. Sitting courtside watching your own team compete, conversing with some of the most popular athletes in the world who are your employees, is priceless for some, and is a commodity rarely up for sale.

The Rockets are one of the league’s best and most well-run franchises. Last season, the team ran a frenetic and entertaining offense under Coach Mike D’Antoni, finishing with a 55-27 record while obliterating league records for most 3-pointers made and attempted in a season.

They made their fifth straight trip to the playoffs and advanced to the conference semifinals before losing to the San Antonio Spurs in seven games. D’Antoni, in his first season with the team, was the N.B.A.’s Coach of the Year, and guard James Harden finished second in voting for the Most Valuable Player Award.

Still, the Warriors came away with their second championship in the last three seasons, and chasing them might seem like a hopeless task for the rest of the league. But the Rockets have been aggressive this summer in a hectic off-season for the N.B.A. Last month, they acquired Chris Paul, one of the league’s top point guards, in a blockbuster trade with the Clippers. His addition is expected to give Houston one of the top backcourt tandems in the league next season.

The Rockets might not be done augmenting their roster, either. They have been pursuing the Knicks’ Carmelo Anthony in a potential multiteam deal. Anthony, a 10-time All-Star, has a no-trade clause in his contract with the Knicks, but he is believed to be willing to waive it if the Knicks can work out a trade that would send him to Houston.

But even as the Rockets attempt to build for the future, their current foundation gives them an enviable stability. Daryl Morey, the team’s general manager and architect, and Harden recently agreed to long-term extensions. Harden’s revamped deal, worth about $228 million over the next six years, will keep him under contract through the 2022-23 season.

That stability will probably translate into an even bigger payday for Alexander.​

folks may want to revise their sales price estimates in the poll thread