Rockets owner hasn’t given up on dream of Houston NHL team (mod: Houston thread)

gstommylee

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Good for the league that there is owners which are willing to spend money and see markets like Seattle which is great spot for hockey. Also Seattle is great location for NHL upcoming new TV-deal. Top-15 USA city for TV-market.


As I mentioned Houston will get a team near future. 4th Largest city in USA without NHL. Question I asked my shelf is why they have not got the team? Also there is hockey history with Aeroes.


back in 2015 expansion process only 2 turn in a bid when the fee was 500m the other 11 (excluding seattle simce they solved the $$$ issue since then) grouos did not turn in a bid. i really doubt there are any more groups out there willing to pay a even higher fee.

as long as the fee is 650m or more houston isnt getting a nhl team.
 

CHRDANHUTCH

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add to that, as the Wild ownership showed you, you need a committed ownership group because no other league has touched Houston since the decision by Alexander to end the lease agreement with the Aeros.
 
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Centrum Hockey

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Hockey Heading to Houston?

One article, but i am sure that one day this will happen
Tilman Fertitta Has Monthly Discussions About Bringing An NHL Team To Houston | Houston Public Media
“The studies we have done, it’s a little harder below the Mason-Dixon Line. It’s a little harder to put butts in the seats,” Fertitta said
download.jpg

Tilman Fertitta is completely clueless
 
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Pandemonia

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I mean... I haven't given up on the dream of owning an NHL team either, but it's also more of a matter of not being able to afford it as well.

He wants a discount and he's not going to get an NHL team in his price range in all likelihood. The days of cheapo NHL teams like the Trashers being up for sale are gone the days of the dodo since the NHL started charging a half billion+ for an expansion team.

Regular reminder that True North bought in low. Very opportune timing there.

Some people buy things at a fire distressed sale.

David Thompson bought while it was still on fire.
 

Barclay Donaldson

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Tilman Fertitta is worth almost five billion dollars. Yep, totally clueless.

In terms of trying to buy a hockey team, yes. He is clueless to the extent that it is no longer funny.

And he is only worth $4.2 billion. That is not "almost five billion dollars." Break it down to where he gets it. About half of it is his ownership of the Rockets and operation rights for their arena, which is almost entirely leveraged on credit he is paying back at an above average interest rate. The rest of it comes from Landry's, which he is entirely based on his ownership of shares and he expansion has been almost entirely on credit. He has no liquidity. He would have to sell off lots of what he owns in order to afford a NHL team. The NHL won't allow him to get one cheap or extend another long line of credit to add on to the two to three others he has that we can clearly count.

Fertitta is absolutely clueless. As is anyone who thinks he isn't clueless.
 

Centrum Hockey

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In terms of trying to buy a hockey team, yes. He is clueless to the extent that it is no longer funny.

And he is only worth $4.2 billion. That is not "almost five billion dollars." Break it down to where he gets it. About half of it is his ownership of the Rockets and operation rights for their arena, which is almost entirely leveraged on credit he is paying back at an above average interest rate. The rest of it comes from Landry's, which he is entirely based on his ownership of shares and he expansion has been almost entirely on credit. He has no liquidity. He would have to sell off lots of what he owns in order to afford a NHL team. The NHL won't allow him to get one cheap or extend another long line of credit to add on to the two to three others he has that we can clearly count.

Fertitta is absolutely clueless. As is anyone who thinks he isn't clueless.
The Miami Marlins Sale and dismantling from 2017-present is good example of how Fertitta would buy and operate a NHL team if he got his way.
 

GindyDraws

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Ahhh, Les Alexander. The equivalent of a four-letter word for Houston hockey fans. (Not that things will be any better
with Tillman Fertitta.)

Tillman gave Houstonians hope... and immediately took it all away.

Hockey will never return to Houston.


And, this is the reason why hockey will never return to Houston; when you have owners in charge of your one hockey arena that are either miserly (Les) or stupid (Fertitta).
 

sh724

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In terms of trying to buy a hockey team, yes. He is clueless to the extent that it is no longer funny.

And he is only worth $4.2 billion. That is not "almost five billion dollars." Break it down to where he gets it. About half of it is his ownership of the Rockets and operation rights for their arena, which is almost entirely leveraged on credit he is paying back at an above average interest rate. The rest of it comes from Landry's, which he is entirely based on his ownership of shares and he expansion has been almost entirely on credit. He has no liquidity. He would have to sell off lots of what he owns in order to afford a NHL team. The NHL won't allow him to get one cheap or extend another long line of credit to add on to the two to three others he has that we can clearly count.

Fertitta is absolutely clueless. As is anyone who thinks he isn't clueless.


That $4.2B figure you are referencing is net worth so assets minus liabilities. You seem to be discounting his net worth by his liabilities when the liabilities were already subtracted out. Worth can also vary depending on who is calculating the value of an asset especially a business. The true value of something is only known when/if it sells. Then there are intangible values.

Landry's is a private company there is very little public information on its financials and most of that is estimates/assumptions.

To discount his wealth because he has debt is disingenuous as very few wealthy people actually buy things with cash. Wealthy people do not look at debt the same way the average person does. Their primary concern is ROI not interest rates or payment amounts. The Rockets debt is in bonds which do not work the same way as loans. He does have little (little is subjective) cash available, but that isnt the same thing as liquidity. Liquidity includes investments that can easily be sold, we have no idea what investments he owns. He could own a billion dollars worth of stocks, bonds, insurance policies, etc that could be easily converted to cash as soon as the markets open tomorrow if he needed cash quickly. The LLCs he owns could also be sitting on significant cash that could be distributed to him personally

As far as buying an NHL team, he may have to sell assets but maybe not. Being able to 'afford' something has little to do with liquidity. The NHL may or may not allow him to highly leverage a team to buy it, we cannot say with any certainty what the BoG would allow. He could sell bonds just like with the Rockets or have minority partners, or many other options.

A line of credit is not the same thing as loans or bonds. Nor is personal debt the same as business debt. I am sure the vast majority of the assets, and their associated liabilities, making of his net worth are held in LLCs, or other similar structures, not him personally. You seem to be interchangeably using different types of liabilities as if they were all the same thing.
 

Barclay Donaldson

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"Here is my opinion. Anyone who disagrees with my opinion must be a moron."

It's 2020 and you guys are still using that argument? Cmon, even testosterone has its limits.

You sort of ignored the entire paragraph where I clearly described how he is clueless beyond belief. But please, just ignore that entirely and go on about how you are offended :dunno:
 

Barclay Donaldson

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That $4.2B figure you are referencing is net worth so assets minus liabilities. You seem to be discounting his net worth by his liabilities when the liabilities were already subtracted out. Worth can also vary depending on who is calculating the value of an asset especially a business. The true value of something is only known when/if it sells. Then there are intangible values.

Landry's is a private company there is very little public information on its financials and most of that is estimates/assumptions.

To discount his wealth because he has debt is disingenuous as very few wealthy people actually buy things with cash. Wealthy people do not look at debt the same way the average person does. Their primary concern is ROI not interest rates or payment amounts. The Rockets debt is in bonds which do not work the same way as loans. He does have little (little is subjective) cash available, but that isnt the same thing as liquidity. Liquidity includes investments that can easily be sold, we have no idea what investments he owns. He could own a billion dollars worth of stocks, bonds, insurance policies, etc that could be easily converted to cash as soon as the markets open tomorrow if he needed cash quickly. The LLCs he owns could also be sitting on significant cash that could be distributed to him personally

As far as buying an NHL team, he may have to sell assets but maybe not. Being able to 'afford' something has little to do with liquidity. The NHL may or may not allow him to highly leverage a team to buy it, we cannot say with any certainty what the BoG would allow. He could sell bonds just like with the Rockets or have minority partners, or many other options.

A line of credit is not the same thing as loans or bonds. Nor is personal debt the same as business debt. I am sure the vast majority of the assets, and their associated liabilities, making of his net worth are held in LLCs, or other similar structures, not him personally. You seem to be interchangeably using different types of liabilities as if they were all the same thing.

Considering the team without a doubt would be part of his Clutch City S&E group, they would essentially be the same thing. They are different liabilities, but they would be acting similarly enough for the point that was being made.

As far as buying the team, it is extremely likely, to the point of near certainty, he can't afford a NHL team if it required such astronomical leverage in order to afford the rockets. Fertitta had to sell $1.5 billion worth of bonds at the last moment to finalize a deal.

As for his net worth, his $2.5 billion basketball team, which has increased $300 million in value, is leveraged on about $2 billion worth of debt. His similar manner of buying restaurants is also another artificial inflation of his net worth and how it isn't as clear cut as assets-liabilities.
 
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JMCx4

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I recommend the title of this thread be changed to: "Dreamers haven’t given up on a Houston NHL team someday in the near, medium or distant future". It clearly has the legs to live up to the name ... over however many (Part X) continuations are allowed by HFB admin.
 

sh724

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Considering the team without a doubt would be part of his Clutch City S&E group, they would essentially be the same thing. They are different liabilities, but they would be acting similarly enough for the point that was being made.

As far as buying the team, it is extremely likely, to the point of near certainty, he can't afford a NHL team if it required such astronomical leverage in order to afford the rockets. Fertitta had to sell $1.5 billion worth of bonds at the last moment to finalize a deal.

As for his net worth, his $2.5 billion basketball team, which has increased $300 million in value, is leveraged on about $2 billion worth of debt. His similar manner of buying restaurants is also another artificial inflation of his net worth and how it isn't as clear cut as assets-liabilities.

You are making assumptions and labeling them as "without a doubt". A line of credit, a bond, and a loan all operate very differently in terms of repayment, how they are accounted for on a balance sheet, and how they factor into a leverage calculation. These terms should not be used interchangeable at all. A line of credit is not a liability at all until it is used, yet the entire exposure is included for high leverage transaction consideration, these typically have interest only payments with principal due at maturity, unless it is renewed in which case the principal is not due. LOCs are not included in balance sheet leverage of senior cash flow leverage except for any portion that is used. Pretty much all commercial loans are for a term much shorter than the actual amortization, therefore the interest rates and payments can vary throughout the amortization. They also usually include a penalty for early pay off, or a higher interest rate to waive the penalty. Bonds are fully amortizing and can be openly traded and paid off at any time.

The bond sale wasn't "at the last minute" it was part of the proposal. The NBA would not have considered the offer if $1.5B of the purchase price was a complete unknown. Bonds tend to be much more beneficial than traditional loans for some of the reasons addressed above among others. Again "afford" is not as simple as you are making it and what leverage the NHL would or would not allow is completely unknown. I am not saying he could "afford" the team just that you are making a lot of assumptions based on no factual information on his personal finances.

Have you seen his personal financial statement? Or the balance sheets for any of his LLCs? Or are you just making more assumptions? Using the numbers you are providing, if the team is worth $2.5B and has $2B in debt that is $500MM of his net worth. So you are saying without the Rockets he would be worth $3.7B instead of $4.2B. You do not artificially inflate your net worth by buying assets, any purchase would be offset by a change in cash or liabilities. If you buy a business for $1MM that is worth $1MM and take out $1MM in debt to do it, the change in your net worth is $0. If you buy a business for $1MM, that is worth $1MM, and take out $800M in debt and used $200M in cash the change in net worth is $0. You grow net worth by increasing profitability, thus increasing value, and by improving leverage.

The only way to legally "artificially" inflate the value of a company is to use intangibles (ie trademarks, patents, payables/receivables to/from related parties, loans to owners as opposed to distributions, etc.), and even then there are accounting standards for how to calculate these, though there is some leeway. Artificially inflating the value of net worth, or any line item on the BS/PFS, without being able to provide a reasonable sound justification, and presenting it to a financial institution, the SEC, or other agencies, is very much illegal.
 
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Stumbledore

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You sort of ignored the entire paragraph where I clearly described how he is clueless beyond belief. But please, just ignore that entirely and go on about how you are offended :dunno:

The lady wrote "It's 2020 and you guys are still using that argument? Cmon, even testosterone has its limits."

I don't think that sounds offended at all. I think she was ridiculing your "anyone who disagrees with MY opinion is a moron" argument.
 

Barclay Donaldson

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The lady wrote "It's 2020 and you guys are still using that argument? Cmon, even testosterone has its limits."

I don't think that sounds offended at all. I think she was ridiculing your "anyone who disagrees with MY opinion is a moron" argument.

Then go after how I showed anyone who would hold the opinion that <<Fertitta is clueless>> is in fact a moron. A better description would be "It's 2020 and my opinion matters" and the opinion <<Fertitta entirely knows what he's doing with this whole NHL thing>> needs to be treated like <<the Earth is flat>> or something else entirely ridiculous.
 

Barclay Donaldson

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You are making assumptions and labeling them as "without a doubt". A line of credit, a bond, and a loan all operate very differently in terms of repayment, how they are accounted for on a balance sheet, and how they factor into a leverage calculation. These terms should not be used interchangeable at all. A line of credit is not a liability at all until it is used, yet the entire exposure is included for high leverage transaction consideration, these typically have interest only payments with principal due at maturity, unless it is renewed in which case the principal is not due. LOCs are not included in balance sheet leverage of senior cash flow leverage except for any portion that is used. Pretty much all commercial loans are for a term much shorter than the actual amortization, therefore the interest rates and payments can vary throughout the amortization. They also usually include a penalty for early pay off, or a higher interest rate to waive the penalty. Bonds are fully amortizing and can be openly traded and paid off at any time.

The bond sale wasn't "at the last minute" it was part of the proposal. The NBA would not have considered the offer if $1.5B of the purchase price was a complete unknown. Bonds tend to be much more beneficial than traditional loans for some of the reasons addressed above among others. Again "afford" is not as simple as you are making it and what leverage the NHL would or would not allow is completely unknown. I am not saying he could "afford" the team just that you are making a lot of assumptions based on no factual information on his personal finances.

Have you seen his personal financial statement? Or the balance sheets for any of his LLCs? Or are you just making more assumptions? Using the numbers you are providing, if the team is worth $2.5B and has $2B in debt that is $500MM of his net worth. So you are saying without the Rockets he would be worth $3.7B instead of $4.2B. You do not artificially inflate your net worth by buying assets, any purchase would be offset by a change in cash or liabilities. If you buy a business for $1MM that is worth $1MM and take out $1MM in debt to do it, the change in your net worth is $0. If you buy a business for $1MM, that is worth $1MM, and take out $800M in debt and used $200M in cash the change in net worth is $0. You grow net worth by increasing profitability, thus increasing value, and by improving leverage.

The only way to legally "artificially" inflate the value of a company is to use intangibles (ie trademarks, patents, payables/receivables to/from related parties, loans to owners as opposed to distributions, etc.), and even then there are accounting standards for how to calculate these, though there is some leeway. Artificially inflating the value of net worth, or any line item on the BS/PFS, without being able to provide a reasonable sound justification, and presenting it to a financial institution, the SEC, or other agencies, is very much illegal.

The NHL franchise value is artificially inflated, and is very much legal. By going just on the assets-liabilities, not every team is worth $650 million at the very least. Instead, the BOG and Bettman have decided to rightfully protect the franchise values by deciding through both the <<Seattle is starting with nothing besides the right to play in the NHL, so my franchise at the very least is worth that>> and <<scarcity principle in action>> so now every team is worth $650 million on the market. Arizona's sale to Meruelo finished for something around that when debt was taken into account. Carolina's sale to Dundas for majority ownership for the team was proportional to the $650 million mark as well.

Houston Rockets were bought at $2.2 billion. It is now valued at $2.5. No new TV deal was signed. The amount of debt has gone down slightly, but something he bought is now worth more despite there not being any significant change in assets besides long-term plans to renovate the Toyota Center and definitely not $300 million worth of liabilities paid off.
 

Stumbledore

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Then go after how I showed anyone who would hold the opinion that <<Fertitta is clueless>> is in fact a moron. A better description would be "It's 2020 and my opinion matters" and the opinion <<Fertitta entirely knows what he's doing with this whole NHL thing>> needs to be treated like <<the Earth is flat>> or something else entirely ridiculous.

No thanks, no need to "go after" you down the hole. Keep on digging, friend.
 

GindyDraws

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Let's be realistic; the only viable venue that I see that could have hockey in Houston is controlled by a man who thinks he can get an NHL team on a discount or through some Section 8-like voucher just because he owns both the arena and an NBA franchise. As much as I would want there to be an ECHL team in the NRG Arena, that will never happen, since that's only for rodeos, not to mention how the hell would they install an ice plant in that building? And anyone who wants to build a similarly sized arena like Dickies Arena in Fort Worth for those kinds of events, even with Houston's infamous nonexistent zoning legislation, isn't going to come along and build said arena anytime soon as the Toyota Center exists for major venues, and NRG Arena is for whatever random stuff you want to do that involves livestock. That "middle of the road" niche stuff likely is just going to go to Corpus Christi or Beaumont or anywhere else, anyway.
 

CHRDANHUTCH

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Let's be realistic; the only viable venue that I see that could have hockey in Houston is controlled by a man who thinks he can get an NHL team on a discount or through some Section 8-like voucher just because he owns both the arena and an NBA franchise. As much as I would want there to be an ECHL team in the NRG Arena, that will never happen, since that's only for rodeos, not to mention how the hell would they install an ice plant in that building? And anyone who wants to build a similarly sized arena like Dickies Arena in Fort Worth for those kinds of events, even with Houston's infamous nonexistent zoning legislation, isn't going to come along and build said arena anytime soon as the Toyota Center exists for major venues, and NRG Arena is for whatever random stuff you want to do that involves livestock. That "middle of the road" niche stuff likely is just going to go to Corpus Christi or Beaumont or anywhere else, anyway.
agreed, then you need an NHL partnership to operate it, just as the Wild owned the majority of the Aeros.
 

Stumbledore

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agreed, then you need an NHL partnership to operate it, just as the Wild owned the majority of the Aeros.

I'd forgotten about that. The whole Borg thing with the North Stars assimilating the Cleveland Barons and the Aeros getting sucked into the Hartford mess because of Jacobs.

Yeah, good times ...
 

CHRDANHUTCH

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I'd forgotten about that. The whole Borg thing with the North Stars assimilating the Cleveland Barons and the Aeros getting sucked into the Hartford mess because of Jacobs.

Yeah, good times ...
no, the Aeros were an 80/20 partnership.... 20% locally owned, otherwise the team was owned and operated by MSE aka the Wild's corporate entity, SM.... that's why the Iowa Wild exist today as MSE now owns it outright.....

the only thing Chuck Watson got to do was name the franchise, that's why the name Aeros survived through three franchises and three leagues
 

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