Rockets owner Tilman Fertitta 'is hellbent on reducing payroll'

tilmen is here to stay. He will gut the roster to dleaguers if he has to.

 

Screw you, Le$ Alexander, for selling this team to some ******* that has no business owning an NBA team.

 

I am not sure what source lead you to make the statement they are "money printing enterprises", but I may not have access to the same reports since these are private enterprises and not public, I would be interested in reading them if you have them.

From everything I have read, NBA teams are mostly trophy assets for the wealthy, not intended to provide market relevant ROI. Most teams come close to break even, lose a little, make a little, or best case scenario make $150mm a year in net income (Lakers, one of the only teams with info and said to be the most profitable). For a team like the Lakers, that I believe were last sold for $20mm decades ago, making $150mm is great because there is no debt. However, if you were to buy the Rockets at $2.2B like Tilman did, you have a significant debt service. I highly doubt Tilman is that liquid to pay cash. His net worth is tied up in real estate assets (hotels), usually people who do this are constantly leveraged and roll any cash into the equity portion of their next deal, so max you may have $100mm-200mm cash if you have a $4b net worth. I would not be surprised if he has less than $50mm in cash, wealthy people use debt as a tool (Especially people in hospitality, they think they are brilliant for how they are able to use debt), and the way he seems to think he knows all, I highly doubt he was prepared for something like Covid (TBH, no one I know in the industry was).

He likely has some sort of revolving credit facility to be even able to make payroll on the Rockets. Especially when he has contracts that require lump sum payments twice a year. I can't imagine what his debt service is, but I think that is what he is trying to meet, I don't think he is in a position to be profitable right now, and I don't think you want to be profitable because you would need to pay taxes. It is better to borrow, use cash flow from operations to pay down your debt and use the interest expense to take advantage of a debt tax shield. My guess is prior to China/Morey & COVID the team probably had net income of around $50mm-$75mm. I really think he is losing money at this point. I think he used equity in his hotels as collateral for loans on the Rockets, and that is where I think things are going to get very interesting. If the value of his hotels have diminished, I am wondering what covenants are triggered, and if he is at risk of default if he misses an interest payment.

The money on sports teams is usually made on the sale, but he's really bought at the peak of the market. If you look at teams that are sold in downturns, or not in a booming economy, those are the guys that make money (i.e Jordan buying the Bobcats/Hornets or whatever during the financial crisis). The way the Astros were bought, they were bought with smart money and they made some moves to immediately return cash to investors or decrease their purchase price (cash incentive to switch to AL, etc) and the purchase price and timing made sense. Tilman is not smart and he is not Steve Ballmer.

 

You still wonder why Morey and Dantoni left and Harden wants out?

 

Tillman needed to take out loans to purchase the Rockets, he is highly levered. Not a true billionaire.

 

Love how the owner is being blamed for everything.

If the players do what they're supposed to do and the GM had done a good job, this mess wouldn't even be here.

Morey in his desperation traded for Westbrook and here we are.

The myriad of Rocketss problem has been here long before Fertita even got here.

Piss poor player development and a love for analytics and stubbornness towards number crunching was Morey's philosophy and we are seeing the deadly ramifications of that.

You tell me, if this is how you perceive players as assets rather than men to nurture, what possible success can be attained? NONE

 

Love this media and you guys hanging on to every word they say, especially the negative as it is gospel.......

Let's see in the past 24 hours:

Article 1: Harden rejects $103 Million dollar two year extension, which would make him the first player to make over $50 Million in one season..........

Article 2: Tillman is "Hellbent" on reducing payroll and stay under the luxury tax...........

Well which one is it???????????????? It can't be both........ I guess as a poster you can use the one that fits your narrative.............

 

Those two aren’t mutually exclusive, the best scenario is keeping harden for him. If he can’t then reducing pay roll is priority

 

even if morey does everything right as he did in 2018. the nba would just send scott foster to corrupt the series and send us home, you have to stack the deck to overcome corrupt refs

 

Lol I mean, that's like selling your car to someone who then causes a massive pile up , and then you getting blamed for it. Let us focus the hate on the man who deserves it.

 

WTF, should i start playing on the trade machine looking for expiring contracts.

 

At this point, the only way things improve for this team is if Tillman has a Donald Sterling moment or he becomes the NBA version of Frank McCourt and cannot make payroll. Tillman strikes me as someone who will rather see it all burn to the ground doing it his way than to listen to those who know more than he does. Classic Sidney Deane aka look good and lose than to look bad and win.

 

And people wonder why Harden wants to leave?

 

No wonder Westbrook been linked to Charlotte. Tilman wants that Batum expiring contract...

 

You joke, but there are China $$$ attached to that contract.

 

Get him Less!

 

It is known Westbrook was not a Morey move, it was a Patrick Ferttita move, and Harden also pushed for CP3 to be gone. The thing is as an owner there is a TON of things that could have been done differently, even if you are trying to cater to Harden and suddenly handcuffed to Westbrook. Trading CC was a money decision, not communicating with your head coach and causing him to quit before getting on the plane home, the rumor is both Harden and Westbrook didn't like the idea of Tilman's political affiliations, these are all on the owner. He should have discussed his political affiliations with them and maybe tried to show he supported some of the causes that the players have been pushing for through some sort of dialogue. The issue is that Tilman obviously is a poor communicator, he thinks that being the owner things get done on his time, and that is the sign of poor leadership. If he was pro active in making sure everyone is on the same page, he wouldn't have his best player asking to be traded to a team that just acquired his ex coach that just suddenly quit.

We didn't get a ring with Morey, but you will soon see that his tenure was extremely successful relative to what we are in for. Many people forget we had the longest running playoff streak in the NBA. Do you really think Harden would be asking to be traded to the very team Morey just signed with if he felt he was treated like an asset? Nets/Philly are at the top of his list. Both have top personnel that escaped Tilman, you should be able to draw a conclusion from that. If your coach, GM, and top players all leave and try to assemble elsewhere, ownership is the issue.

 

Cannot agree more. Straight from the depths of hell

 

Hoping Tilman took some high interest loans from the mob on the side to keep his businesses afloat.

Then Houston boycotts his team and he can’t meet the payments

 

You Tilman lovers are in the minority here.