Culture / Sporting Life

Tilman Fertitta’s $2.2 Billion Steal — Crazy Money Rockets Buy Lauded as Shrewd Deal

How Houston’s Most Famous Billionaire Made His Sports Dream Come True

BY // 09.05.17

The scene at Tilman Fertitta’s Post Oak headquarters building is more chaotic than usual. There are always major, bold-faced transactions getting worked on at Tilman HQ — the art of the deal is in this Houston billionaire’s DNA. But there are deals, and then there’s buying an NBA team for $2.2 billion.

Even for Fertitta, this is a white whale of a purchase — the one he long lusted after, but didn’t know if he’d truly ever be able to land.

“I would say that’s one thing I’d like to do: Own a sports team,” Fertitta told me when I spent several days with him for a PaperCity profile. “If somebody said, ‘What did you not do that you wanted to do? Own a sports team. But the problem is I’m so loyal to Houston, it’d be kind of hard to own something somewhere else.”

When Leslie Alexander decided it was time to sell the Houston Rockets, Fertitta’s opportunity opened up. In Houston. And he pounced — agreeing to a record $2.2 billion purchase price, that tops the then-unfathomable $2 billion Microsoft billionaire Steve Ballmer paid for the Los Angeles Clippers in 2014.

Tilman Fertitta went big for this one — yet several prominent NBA observers still think he pulled off a shrewd deal.

Bill Simmons — arguably, the most famous sports writer in America and the man behind The Book of Basketball  — says that Fertitta paid about $300 million less than he expected. In fact, Simmons goes as far as calling this $2.2 billion buy “a steal.”

It’s hard not to make money with a professional sports franchise with the way these rare assets increase in value. It’s even harder to imagine the 60-year-old Fertitta, who built a Fortune 500 restaurant and casino empire right out of Houston, not making money in the long run on an NBA team.

Of course, Houston basketball fans do not care about Fertitta’s bottom line. Or the fact that the 72-year-old Alexander, already a billionaire himself, will walk away with a huge windfall from an $85 million initial purchase made in 1993. No, they only want to know what kind of owner Fertitta will be.

It’s hard not to see this sale as a win for Houston on that front as well. For instead of a Chinese billionaire with little ties or feel for H-Town, or a Google titan who’d rather be in Silicon Valley, the Rockets go to a Houston guy who clearly cares immensely about the city. And being perceived as a winner.

The University of Houston landed Tom Herman (and put big money behind trying to keep him) in large part because of Fertitta’s work as chairman of the college’s board of regents. It is easy to imagine Fertitta being as involved an NBA owner as the Dallas Mavericks Mark Cuban (without the screaming at the refs).

The New Mark Cuban?

On this day, Feritta cannot say much on the record about his plans. He needs to show that he honors the NBA’s approval process (though the days of casino ownership being a league no-no are long gone) and bide his time.

“I am truly honored to have been chosen as the next owner of the Houston Rockets,” Fertitta says in a statement. “This is a life-long dream come true. Leslie Alexander has been one of the best owners in all of sports, and I thank him immensely for this opportunity. He has the heart of a champion.  Lastly, out of respect for the NBA’s approval process, I can say no more other than I am overwhelmed with emotion to have this opportunity in my beloved city of Houston.”

Fertitta started getting more into the national public eye with his Billion Dollar Buyer  CNBC reality TV business show, but being the face of a major professional sports franchise is another step up entirely. The view from Fertitta’s top floor office at 1510 West Loop South hasn’t changed.

But his reality sure has.

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