He also made profits from operations too since he almost never went over the luxury tax line. I remember when when they traded away picks to dump glen rice since they were trying to save money. The stadium was paid for by the public.
Would have been nice to have cashed in on Les's return, but I don't know that I would want to buy in going forward. This is probably the one ~20 year period in the history of the NBA in which you could have achieved a return like that.
Yeah, there were still yearly expenses that he paid during the last 25 years. I'm sure the guy is doing fine financially but it's not all profit by a long shot.
Ballmer paid 2B for the Clippers - I don't see Houston going for that much. In terms of Market size Houston is a little smaller but I think a large part of Ballmer's price tag was the opportunity cost knowing that the league was entering a more profitable media deal. In the short term purely as an investment, the league is probably not going to grow quite as explosively as they have in the last 10 years so as an investment there will be less suitors. It's a long term play if you want to invest in the Rockets franchise(or any NBA franchise) at this point.
clippers dont really compare to houston. clippers and lakers are essentially sharing a market. hou easily sells for over $2b imo. well respected organization with an mvp caliber player locked in his prime. addition of a hall of famer. potentially adding another all star caliber player. a top GM in the league. not mention the huge market overseas, with china obviously being the main one. League revenues are also going up compared to when the clippers were sold
Les has made 1 - 2 billion through his Far East contacts that came as a result of the Chinese Connection+ ...
I was thinking the same thing yesterday that, if allowed, it would be great if Houston could purchase the Rockets as a municipality. However if that is not an option, is there anything preventing co-op ownership?
Overall, I have loved Les Alexander. I am, however, a little bit annoyed that he ran the team so strictly to turn a profit in all his years as owner when he's about to receive a huge payday just from the investment. Corporate season ticket sales that always caused the lower bowl to look half empty, never paying the luxury tax etc. He could have lost money every year and everything was still going to turn out ok for him. He was the owner for 2 championships and the Rockets have been mostly good during his tenure so I can't complain. I just hope the next owner isn't afraid to sacrifice year over year profit to win.
Owners of NBA teams, or any enterprise business owners typically have exit strategies years before they happen - typically. This is what worries me about this announcement to sell now out of the blue. Yes, you want to sell profitably, but another reason to sell is if you foresee a drastic decline in value. If Mr. Alexander had an idea to sell the team within 5 to 10 years, and has moved up the timetable at a point when this organization is that the cusp of great success - it begs the question… Why sell, when you are in a position to potentially win a championship? What does he know, that we don't?
Have the Rockets posted a net loss that wasn't covered by cash in the bank? If not, isn't he making 2 billion minus 85 million? [Edit] I did see someone else mention there were expenses paid by Les, is that confirmed? And if so, has he taken those back out in years where there is profit or just left in the Rockets accounts? Seems like you would need to know that to answer the question.
We don't really know any of this because the Rockets don't have to make their finances public IIRC. There's also the 50 million Les paid for toyota center. There are expenses, but there are also sponsorships, naming rights, gate receipts, media deals, etc. Not as simple as 2 billion minus 85 million, could easily be more or less than that, though not significantly by my rough reading through articles here and there.
I don't think a lot of folks understand the Packers "shareholder" set up. None of the fans who are "shareholders" are really "shareholders". They pay $250 (plus a $25 "handling fee") for a piece of paper, which is common stock. They literally get nothing from it. They can never sell it. They can never profit from a sale of the team or profits from a season. The "share" is utterly worthless, other than the fact you can frame a piece of paper. It is essentially a fan club membership.
There is essentially no doubt the Rockets were run to be profitable and did just that over the last 24 years. So, yes, it is $2B-$85M, but there has also been yearly profits (maybe a couple of VERY small loss years) he has added. Just an unbelievably fantastic investment. Probably generated, at least, $10-50M in profits yearly (essentially a dividend), and grew at 10-15% compounded yearly interest over the last 24 years. I'd ballpark that Les has generated (even less the $50M into the Toyota Center) at least $250M (maybe as much as $400M) in operating profits, on top of the value increase. That is incredible. You essentially couldn't find a better investment. Consequently, we are probably pretty close to a bubble, so it is a pretty darn good time to get out.
