Big savings Ariza, 15 million Ryan-Knight-Shumpert, 15 million Possible dumping Gordon, Tucker bench is thinner each year.
Who wants to bet this line is completely tapped? https://bleacherreport.com/articles...able-credit-line-of-owners-75m-to-325-million
I got to imagine it's all tapped out if he's selling 15% notes. 15%!!!!! That's JUNK BOND status, that's what you pay someone when people know they are taking a huge risk. Interest rate is all time low and this dude is selling 15% notes. That's desperation and means he's BROKE AF
It won’t recover within 10 years if he dumps Gordon salary for nothing. Players are old, No good young players Very Few future picks enough damages, can’t make playoffs,
I read the proposed loan is LIBOR+1400bps (14%), with OID of 96 cents on the dollar, which pushes the spread to 15%+. Right now, 1 month avg LIBOR itself is under 1%. That should tell you how far outside the 'investment grade' market this proposed facility is.
Maybe he needs to apply for a new 100 million line of credit now to pay Gordon, Covington and Tucker. It takes longer when he has too many loans. Sometimes it takes 12 months. Bank wants to see your business profit.
Seriously there needs to be a new appelation here. He ain't BROKE AF. He's BROKER THAN F I hereby give you, BROKER TF
It will legitimately be a decade-plus before the Rockets are even potentially remotely competitive again once this is all said and done.
Remember all those numerous jokes about Tilman being broke? No joke at all. Liquidity wise, he is broke. I thought only peons like us would borrow money on those usury terms.
And he knew it the whole time. This crazy time just sped things up to flush this out. Probably the only reason why he didn’t fire Morey for his HK comment was he’d have to pay him and then pay someone else to fill the position. Dude is a fraud. Just because he loves Houston doesn’t mean he’s not a fraud.
Risky in the sense that they allowed a highly-leveraged and debt-laden individual to buy a team for $2.2B with only $200M down and no minority partners. You gotta remember where the league was a couple of years ago in pumping up its growth. The NBA has been trying to position itself as the new global game behind soccer for years. Part of that appeal was the the rising value of teams like the Warriors, who sold for $450M (and are now worth $4.3B), the Bucks ($550M and $1.58B, respectively, plus a new taxpayer-funded arena to boot). Add into the mix guys like Joseph Tsai paying $2.35B for the Nets (plus an additional $1B to control Barclays Center) and you've got one of the world's most in-demand luxury sporting products this side of Russians clamoring to buy into the Premier League. However, part of the risk is that the buyers have to be qualified to stay in the club. It's becoming increasingly clear that Tilman is not. To quote from the linked New York Times story: If Tilman begins to tank the Rockets because he can't afford to actually run a team since he has no liquidity, a team based in the fourth-biggest city in the country with a strong fanbase in China (well, up until, you know...), it doesn't look good that the NBA allowed him into their club to begin with. If you're spending $3B to get into the NBA ownership club, you want to make sure that the other members are pulling their weight to keep your investment worth at least what you paid. Now, the 29 other owners are doing enough to keep things on the right path. But if 10 teams were suddenly up for sale and they all sold to people with Tilman's bookkeeping skills? That's when it gets dicey and the league's lofty aspirations start becoming harder to achieve.
Tilman got mad at Texas Monthly for asking him why he's broke. He said no one wants to buy his jets, yachts, mansions and you can only "borrow so much from the Rockets. WOW. Talk about illiquid. $4 billion worth and can't sell anything to raise cash, so he has to borrow some more paying 15% interest rates on notes!!! 15%!!!! Do you even get 15% from unknown strangers from the sites where people lend to each other? " TM: A lot of people are looking at you and saying, this guy is worth $4 billion, whatever it is now. He’s got mansions and yachts and jets. Why can’t he afford to keep everyone on the payroll? TF: You know the answer to that. It’s kind of insulting, okay? Do you think I wouldn’t go sell that stuff right now if I could? TM: I don’t know. That’s why I’m asking. TF: First off, I have $2 billion in equity in the Rockets that I can’t touch, because you can only borrow so much on a basketball team. Do you think there’s a buyer for jets or yachts right now? Absolutely not. Do you think there’s a buyer for a mansion right now? There’s nobody that’s not being affected."
Tilman in Texas Monthly said he has a lot of room and have other 1 billion in other assets, other than the now worthless Casino and money losing Landry's. I wonder what stocks he owns where he can't sell instead of issuing notes at 15%!!! TF: If you go find me a buyer for my yachts and my mansions and my jets, I’ll sell them tomorrow. Two billion dollars of my net worth is in the Rockets, 1.5 to 2 billion is in Landry’s and the Golden Nugget. And then I have a billion in other assets, from stocks to real estate to homes to everything else. But you can’t go spend that right now. TM: From writing a Texas Monthly profile of you back in 2017, I know you borrowed a lot of money and issued a lot of corporate bonds to buy the Rockets. Does that make it harder for you to weather this kind of pandemic? TF: Nope. This is real simple math—just pay attention. My company does $750 million in EBITDA [earnings before interest, taxes, depreciation, and amortization]. I’ve already killed $200 million in capital expenditures, and I don’t have to pay down any debt. So I have a lot of room.
Bezos can raise $2B by just scratching his back pocket. He routinely cashes billions of dollars of Amazon stock for his other endeavors.
