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To the surprise of many within the Houston Rockets organization, owner Leslie Alexander listed the team for sale earlier this week. The NBA is expecting the highest bidder to spend well over $1 billion to acquire the Houston Rockets in what could be the largest transaction in NBA history. But how could a team not named the Los Angeles Lakers or New York Knicks command so much money?
The Houston Rockets are hot right now having made the NBA playoffs the last five seasons. They have already acquired NBA All-Star Chris Paul this off-season, are hoping to also acquire Carmelo Anthony from the New York Knicks and have given James Harden a six-year contract extension. Additionally, the NBA’s seemingly infinite revenue stream is driven by it’s $24 billion dollar broadcast agreement with Turner Sports (TNT) and ESPN. That also doesn’t include the revenue generated from each team’s local television deals with networks like Fox Sports.
According to Forbes, the Houston Rockets are worth an estimated $1.65 billion. Forbes listed owner Leslie Alexander as the league’s best owner back in 2008. Alexander, a former bond trader and attorney, purchased the Houston Rockets in 1993 for $85 million and his influence began almost immediately. The Houston Rockets won back to back NBA championships in 1994 and 1995. Alexander also spent time as the owner of the WNBA’s Houston Comets and attempted to purchase the NHL’s Edmonton Oilers.
Historically, the purchase of NBA franchises has been a safe investment. The recent sales of less popular teams like Sacramento Kings, Milwaukee Bucks and Atlanta Hawks exceeded more than $500 million each. Major League Baseball’s Los Angeles Dodgers and the NBA’s Los Angeles Clippers were both sold for more than $2 billion. Rumors that Amazon founder Jeff Bezos is interested in purchasing the Rockets have begun to swirl. No one is quiet sure who the next owner will be. We just know it’s going to require a big spend.
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