Few teams have had as busy and successful an offseason as the Houston Rockets this summer, landing Chris Paul in a trade with the Los Angeles Clippers and inking James Harden to a massive, record-breaking contract extension. Those moves indicate that the Rockets are ready to make a run at the Warriors and try to compete for championships now.
With those moves, few teams in the NBA are as attractive as Houston, and owner Les Alexander is hoping that he can cash out while on top, as CEO Tad Brown held a press conference on Monday to say that the team is for sale in a stunning announcement.
The move seemingly comes out of nowhere, and not only was the rest of the NBA surprised, but even the Rockets organization was stunned by the announcement.
While it’s a surprising move, it makes sense from a business standpoint. NBA team valuations have never been higher, and few teams are as intriguing to a prospective buyers as the Rockets are right now. The current NBA TV deal is firmly in place and has caused revenues to be the highest they’ve ever been, but as that has risen, so have player contracts — as evidenced by the Harden extension. As TV networks like ESPN are forced to cut back due to fewer cable subscribers, the next rights deal likely won’t be as high, so Alexander is probably wise to make this move now if he were planning on getting out in the relatively near future. He will also reportedly handle the sale of the team himself.
NBA teams are in high demand, and with the Clippers selling for $2 billion to Steve Ballmer and the Hawks selling for $850 million, the Rockets, valued by Forbes at $1.65 billion earlier this year, can expect to fetch a hefty price on the market. Whoever buys the Rockets will get a cash cow in the short term, but as we get further into this TV rights deal, don’t be surprised if we see a few more long-time owners cash out on their investments when the price is at its highest.