Great idea! I Just got back. The information I've gathered will give us a lot of insight on the future of our Rockets and him as an owner. What I discovered: It was a named brand household 2 PLY toilet paper. My initial reaction: He isn't cheap enough to have the 1 ply, however he isn't exactly spending to live in the luxury of the coveted 3 ply such as the 3 silky layers of Quilted Northern Ultra Plush. What this means for the future of the Rockets: While we won't be flooring a team on the lower end of the cap, don't expect us to be going well into the luxury tax.
Didn't research... does it say how he funded it?? I wonder what his leverage ratio across his holdings look like. My cynical mind says he's got to be really highly leveraged. The real problem will come if the economy ever tanks again.
You've done the basketball gods' work. I feel kind of bad for Tilman, now. If he's actually eating the food from his own restaurants, he probably really could use that three-ply. But Chris Paul's contract is clearly putting a damper on that. And Tilman's sore butthole is angering him and making him cheap out on the team. Since this is Morey's fault, he should switch to an off-brand two-ply or maybe even one-ply as part of the correction process.
Thank you for the kind acknowledgement. I hope the information I gathered is valued because it really was a true sacrifice on my end to attain that data. I guess what I'm trying to say is that Tilman does indeed eat the food from his own restaurants. The bin I dug through was full of half eaten Landrys and there is not much worse than the smell of roting leftover seafood. I'm still trying to get the stench of old fish and cheap crabcakes off me.
We as fans should be filled with a sense of pride and accomplishment when our billionaire owner is saving tax money and investing it in what matters so he can provide food for his family. It really tells us Tilman is all-in on the Rockets and a giant supporter of "Run as One".
Tilman can do whatever he wants with his money. We can have our opinions about his priorities based on how he spends his money. He sees casinos as better investment than James Harden.
I imagine @Carl Herrera shaking his first angrily in Tilman's direction right before going to bed every night, then waking up the next morning and doing the same thing to start his day.
We should pick up Gortat and convert House for the rest of the year. House maybe overrated but he has some size and gave us good minutes.
I honestly think that DM and Tilman understand that Houston isn’t a contender this year so therefore theyvarw trying to save this year to try and go all out next season.
Going all out next season by trading away their first round pick, along with a contract that is set to expire next season?
I know someone who did the deal for tilman to buy the rockets. Apparently he is super leveraged he had to pretty much use all his restaurants as collateral to get a loan to buy the Rockets. But you didn't hear that from me....
I believe this. There are several things that make this entire scenario absolutely ridiculous. 1.) Valuation of transaction, its all private, but I am assuming an absolutely absurd multiple for this deal. A report came out several years ago that showed the LA Lakers as most profitable at ~$100mm net income. If you add back interest, taxes, d&a, and get to $170mm EBITDA for the most profitable franchise and at the time it had a $1.8b valuation at the time, you're looking at an 11X multiple for the best case scenario. The Rockets likely traded for closer to a 20X multiple, and therefore is a rich man's toy, not a rich man's business. NBA teams have been trading at an absurd premium due to the 10+ year bull run we have had. They are a trophy asset for wealthy individuals. TLDR: TF overpaid for the asset for him and the team to be successful. 2.) Tilman is not diversified. He is heavily invested into the restaurant and gaming industries, two industries that get hit the hardest in a downturn. If you look at just Caesar's whose stock he has just purchased, they recently emerged from chapter 11 and the industry as a whole has been struggling. Millennials do not enjoy gambling, and baby boomers who drove the ever so predictable slot machine revenue are retiring and contributing to the expected decline in slot machine revenue. TLDR: His current assets are not recession proof. 3.) Tilman has obviously used leverage to build his businesses. Typically in commercial real estate, and hospitality in particular, you use increased net operating income to refinance your property after it has stabilized and continue to do this every 3-5 years. This allows you to pull out your equity and lever up the property. This leaves you with some cash, and a ton of debt. You then roll that cash into other properties as the equity portion, but those too are levered. The problem here is the types of financing, it is often variable and the combination of increased interest rates and a downturn in the economy resulting in decreased net operating income at the property level can result in the inability to meet your debt covenants. Paying cash for stock, does not mean he has a ton of it, he likely used some cash to roll into equity of someone else's property instead of building his own. He may have either refinanced something that increased in value and simply reinvested in Caesar's equity to decrease or eliminate his short term gains on that refinance. TLDR: TF using cash to buy stock doesn't mean he had it sitting in his account, and it does not mean he did not take on additional debt to do so. Unfortunately for Rockets fans, it is obvious that the deadline moves were made to decrease the luxury tax burdens on the team. We now have an owner that needs a profitable asset, and not a trophy asset. The problem is the amount that he paid, and his debt service due. This is the complete opposite scenario of how the Astros were purchased at an incredible valuation by a private equity group and how salary was shed for a rebuild to increase the value of the team by over 300%.
10, 11 multiples have been the norm the last couple of years for most PE take outs, everything is overvalued everywhere. I know you want a 7x, 8, but you aren’t going to get a profitable business for that anymore. Only nitpick, good comment.
I don't think the Rockets are bringing in $220MM of EBITDA though. I think it is around half of that. I think there was a massive premium he paid to have his hometown team.
Les or his estate will buy this team from the banks for 50 cents on the dollar. We will hear his laugh from the grave.
you guys are so stupid, think about things before mindlessly bi***ing about it like kids. He is obviously willing to go over the cap into luxury tax, As we saw with him trying his hardest to get Jimmy B. But why go over the tax for a marginal improvement?? have to be smart about when to strike and who to strike for. IF/when an opportunity arises, Fertitta will be 100% down to spend whatever
Or Les just assumed any AHole willing to pay 2 bil for a basketball team must really care about basketball and wouldn’t run the team into the ground.
