Forty years ago, San Diego native and sporting legend Robert Breitbard bid to buy a team in the NBA. The league was fast gaining popularity on the wings of great players such as Bill Russell, Jerry West, Wilt Chamberlain and Oscar Robertson. Breitbard, whose family owned a linen business at the time, could afford to cough up the princely sum of $1.75 million as a fee to own a team in the NBA.
Little did he know how far the team would go.
Since Breitbard’s purchase, the Rockets have changed cities once and owners seven times. The present owner, Leslie Alexander, who bought the team in 1993 for $85 million, has decided to put up the team for sale. Alexander is one of just 12 remaining owners who has owned an NBA team since the 90s and earlier. Reasons for the sale remain unknown, and there is no timetable for sale.
This isn’t going to be cheap for an incoming owner. Forbes values the Rockets at an estimated $1.65 billion. That is chump change for the privilege to own one of just 30 NBA teams. More so, when you are on the sidelines of what promises to become of the most electric displays of offensive prowess in NBA history
With the trajectory the Rockets are on, it’s easy to see why that value is about right, maybe even a few hundred million low. They are one of the, if not the best-managed team in the league. General Manager Daryl Morey, a wizard with numbers was brought on in just about a decade ago to shape things up. At the time of his hiring, everyone wondered if Morey, a numbers and technology guy, would be suited for the job of GM, one that requires a vast array of people management skills as well. Alexander nevertheless turned over the operations of the team to him, and there has been no looking back since.
The James Harden story
Morey’s biggest win, of course, was the trade for James Harden; a trade that went down as one of the greatest and most lopsided trades in NBA history. At the time, Harden was coming off his first Finals appearance with the Oklahoma City Thunder, where he was the third option behind along with Kevin Durant and Russell Westbrook. But Morey, ever the analyst, saw in Harden the potential to be a superstar. He was right.
Harden has become a superstar, and will most likely finish his career as one of five greatest offensive players in NBA history. No one saw that coming. No one, except Morey, that is.
With Harden at the helm, the Rockets are now are a perennial playoff contender and with the right pieces and a couple of lucky breaks, could even dethrone the mighty Golden State Warriors. Last season was the first step towards that plan. Although the Rockets crumbled against underdogs San Antonio Spurs in the playoffs, the plan worked, propelling the Rockets to set some of the NBA’s greatest offensive records.
Morey is not done. Last season was just the “beginning”.
This season, Morey has bolstered that offence by bringing in one of the greatest point guards in NBA history: Chris Paul. The 32-year-old is a magician who doesn’t need padded offensive numbers to feel worthy. He is perfectly happy playing second fiddle to Harden, who is the star of the Rockets. In Paul, Harden has found a second star to take over on his off nights.
In addition to bringing in Paul, Morey responded to Steph Curry’s record $201-million contract, with a $228-million deal for Harden, locking him up for the next four seasons. An incredible investment when you consider that Harden, who is just 27, nearly averaged a triple-double (29 points, 11 assists and eight rebounds) last season.
In return for all this foresight and bringing back Houston’s glory days in the NBA, Morey was himself rewarded with a four-year contract extension.
Why is all this important in the grand sale of things?
Unprecedented growth
Because the NBA is bigger than ever and is aggressively looking to expand its influence globally. Durant visited India amidst much fanfare, NBA Africa hosted a professional game between international and native African players, and the NBA commissioner is frustrated with the lack of Chinese players in the NBA while also looking to invest heavily in an e-sports league in China.
The last three Finals between the Golden State Warriors and the Cleveland Cavaliers saw a huge spike in viewership numbers. This kind of interest has not been evoked by the NBA since the late-90s Jordan era.
The massive nine-year TV deal, estimated to be about $24 billion, has virtually guaranteed profitability for teams without lifting a finger. Add to that local TV deals, ticket sales (the Rockets boasted a 94% attendance rate), and the newly introduced jersey patch (valued at about $8 million a year), and suddenly a figure of $1.5 billion seems reasonable.
With such unprecedented growth, to have a team, led by one of the league’s most exciting superstars, that is a title contender for at least the next five seasons, is a gold mine.
The global perspective
Whatever number the Rockets finally go under the hammer for, the figure will most likely not top some of the most expensive teams in the world, who are estimated at more than $3 billion. In fact, to crack the top-10, the Rockets would have to fetch more than the $2.7 billion price tag that Forbes gave the Lakers.
The Forbes top teams mostly consist of football (soccer), American football and baseball teams, with only two NBA teams, the New York Knicks ($3 billion) and the Los Angeles Lakers rounding off the top ten. While the football and baseball teams boast of a larger fan following and bigger squads, the Knicks and Lakers play in the two biggest TV markets in the US. But that yardstick, the $1.5 billion price tag for the Rockets, who rank 11th in market size among the 30 NBA teams, seems about right.
As with every potential franchise sale, there are various celebrity names thrown into the mix. Once a Houston native, singer and performer Beyonce’s name is in the mix, as in the former president of the USA, Barack Obama’s. There is also interest from more than a few billionaires that include Larry Ellison of Oracle fame. Even Yao Ming, the NBA legend and former Rockets player, who owns a team in the Chinese league, has denied that he is interested in the purchase.
The most serious proposal comes from Tilman Fertitta, a billionaire and Houston native. By virtue of his standing in the Houston business community, Fertitta has close ties with the Rockets organisation and is friends with current owner Alexander.
Interestingly he was one of the suitors for the franchise in 1993 when he offered $81 million to buy out the team. In 24 years, that asking price now stands at least $1.5 billion, nearly twenty times higher than the price he offered more than twenty years ago. That is a huge number, no matter what standard you want to measure it against. Yet, as we have seen over the course of the last few paragraphs, that number is fair as can be.