Dan Friedkin the man behind NHL to Houston

[LT]

Fertita won't be thrilled, but I think Houston can support two arenas.

I think Fertitta would work out a deal with another ownership group if the alternative is a new arena elsewhere in the city. He's not that stupid, he just doesn't want to pay the expansion fee.

 

[TheLegend]

Also because Sarver didn't want to go from 50% control/revenue of Footprint down to 50/50 with the NHL team on a new arena.
From what I have seen of Toyota Center, they have the square footage (though the playing surface is like Seattle where it's like 20 feet or something below the ground as Alexander didn't want the fans to walk up stairs to the arena like most other places. But, as long as you have the square footage, you should be able to renovate to accommodate the latest revenue trends/sources. Another factor is also transit/parking of the current facility to wherever other option you may have in mind.

if this Friedkin person is looking to build another arena in the same area with private money, it's probably going to be a new Entertainment District, like LA Kings arena was or what the GS Warriors did with Chase and redevelop the blocks around the arena.

I think you meant the Suns have full control of the arena. Which they do.

 

[StreetHawk]

I think you meant the Suns have full control of the arena. Which they do.

Sorry, that is what I meant. They had 100% control. So better to maintain that in a renovated arena than drop to 50% on a new one.

 

[eojsmada]

Something tells me he'll be too busy to care a whole lot sometime in the near future.

That would make sense as to why a 2nd owner conveniently comes on the scene

 

[dj4aces]

That would make sense as to why a 2nd owner conveniently comes on the scene

Friedman mentioned a second owner during one of the 32 Thoughts podcasts last year, while discussing Atlanta and Anson Carter's press release. At the time, he didn't seem to know who that second group was, just that one existed.

I think many believed Fertitta would be the end-all be-all to own any NHL franchise in Houston because he controls the only building in town. But if Friedkin is willing to pay what the league wants and build a new barn, he pretty much ticks all the boxes the league is looking for in an owner. I don't see how Fertitta can compete with that, even if he hadn't been nominated to be the next US ambassador to Italy.

 

[KevFu]

So Harris County isn't allowed to fund another arena but there is nothing that says someone can't build their own. Nor does it prohibit a suburban arena. Now I haven't been to Houston in 20 years so I can't say if there is a suburb that could support an arena.

Fertitta could come to a lease agreement to let the NHL team share the arena and they would do a joint venture on a new arena in 2033...

Houstonian here. There are many, many suburb cities that could be potential sites: Woodlands/Montgomery Co, Katy, Sugarland/Fort Bend Co. Granted it would be ideal to be in Houston proper (at least for me), but here are many options here that I think would be feasible options.

Yeah, but given the sheer enormousness of Harris County, is picking a suburb a good idea?

Like, if you pick Katy or Sugar Land or Woodlands... how many people from THE OTHER are going to go 50 miles (in some cases across Houston) to attend a game.


Given that Feritta has kicked the tires on an NHL team, but seemingly doesn't think the expansion fee aligns with what he's willing to pay, there's probably not that many hurdles to an agreement between the two billionaires.

Each of them have like 3 to 5 times the wealth that Alexander did, so the whole "fighting over every sports dollar" is far less likely than what we saw with Alexander and Watson.

Alexander threatened to leave Houston. Feritta is just all about Houston sports in a way that isn't very "make as much money possible" compared to "I want to see Houston teams win." Dude is invested in almost every sport in Houston in some way; and massively in U of H.

In fact, what could make the most sense is Friedkin and Feritta co-own an Arena Management Company, build a the next Rockets arena at UH for both the Rockets AND the Cougars (who are SRO in the 7000 seat Feritta Center). That helps the Cougars recruiting; and Fertitta doesn't "Leave" downtown because he's making half the money off the concerts and hockey at the downtown arena (which is like 2 miles away).

 

[Takuto Maruki]

In fact, what could make the most sense is Friedkin and Feritta co-own an Arena Management Company, build a the next Rockets arena at UH for both the Rockets AND the Cougars (who are SRO in the 7000 seat Feritta Center). That helps the Cougars recruiting; and Fertitta doesn't "Leave" downtown because he's making half the money off the concerts and hockey at the downtown arena (which is like 2 miles away).

In a way, that does seem like a win win for everyone. I guess the issue is, does Fertitta eventually stop with his hang up about the price of NHL expansion if that is the way that serves him the best - and more importantly, does the NHL ultimately accept that long term plan knowing the last plan that was pre-requisite of a university creating a new arena?

 

[Kolzilla]

Yeah, but given the sheer enormousness of Harris County, is picking a suburb a good idea?

Like, if you pick Katy or Sugar Land or Woodlands... how many people from THE OTHER are going to go 50 miles (in some cases across Houston) to attend a game.


Given that Feritta has kicked the tires on an NHL team, but seemingly doesn't think the expansion fee aligns with what he's willing to pay, there's probably not that many hurdles to an agreement between the two billionaires.

Each of them have like 3 to 5 times the wealth that Alexander did, so the whole "fighting over every sports dollar" is far less likely than what we saw with Alexander and Watson.

Alexander threatened to leave Houston. Feritta is just all about Houston sports in a way that isn't very "make as much money possible" compared to "I want to see Houston teams win." Dude is invested in almost every sport in Houston in some way; and massively in U of H.

In fact, what could make the most sense is Friedkin and Feritta co-own an Arena Management Company, build a the next Rockets arena at UH for both the Rockets AND the Cougars (who are SRO in the 7000 seat Feritta Center). That helps the Cougars recruiting; and Fertitta doesn't "Leave" downtown because he's making half the money off the concerts and hockey at the downtown arena (which is like 2 miles away).

Totally agree that the ideal situation is to build/have the arena in Harris County so that it's pretty much equidistant for the majority of the metro area.

However, if Fertitta won't agree to host an NHL team in Toyota center/Harris county, we do have plenty of backup options. Probably the best option is a long I-10 just west of Harris County. I say this because that's where the population center of the Houston Metro area has shifted over the last 15 years. This is exactly why so many large Hospital systems have built large stand alone hospitals closer to Katy on this stretch of I-10 (I work in the Medical field and was privy to this strategic growth strategy for my employer). Now, this may not be an ideal spot for ppl that live in the woodlands or the NASA area, but we're still talking only about 50-60 min drive for most. For me, this would be a 25 min drive and I live 10 mins from Toyota Center

 

[Gil Gunderson]

Selfishly I hope they wait until a new arena is completed. I don’t want the Sens to lose another quality goalie in the expansion draft.

 

[aqib]

Something tells me he'll be too busy to care a whole lot sometime in the near future.

I am sure he'll be enjoying his time in Italy but i don't think that means he'll forget about all his business interests in the States.

Yeah, but given the sheer enormousness of Harris County, is picking a suburb a good idea?

Like, if you(wh pick Katy or Sugar Land or Woodlands... how many people from THE OTHER are going to go 50 miles (in some cases across Houston) to attend a game.


Given that Feritta has kicked the tires on an NHL team, but seemingly doesn't think the expansion fee aligns with what he's willing to pay, there's probably not that many hurdles to an agreement between the two billionaires.

Each of them have like 3 to 5 times the wealth that Alexander did, so the whole "fighting over every sports dollar" is far less likely than what we saw with Alexander and Watson.

Alexander threatened to leave Houston. Feritta is just all about Houston sports in a way that isn't very "make as much money possible" compared to "I want to see Houston teams win." Dude is invested in almost every sport in Houston in some way; and massively in U of H.

In fact, what could make the most sense is Friedkin and Feritta co-own an Arena Management Company, build a the next Rockets arena at UH for both the Rockets AND the Cougars (who are SRO in the 7000 seat Feritta Center). That helps the Cougars recruiting; and Fertitta doesn't "Leave" downtown because he's making half the money off the concerts and hockey at the downtown arena (which is like 2 miles away).

Did Alexander even live in Houston?

Houston has grown a lot since 1998 so I am sure the city is probably able to support a second arena. Dallas and Houston are the largest metro areas with only one arena (I count AllState Arena in Chicago) and the Mavs will probably build their own arena in 2031. So its just a matter of what, if anything, Harris County can do to facilitate a second arena within the county if they can't do anything financial (even infrastructure) then maybe he agrees to bink with the Rockets for a couple of years and then makes a deal for a successor arena. With the current lease ending in 2033, if the NHL likes sticks with the idea of staggering the teams out they could have Atlanta come in in 2028 or 2029 (depending on when they formally award a team) and then Houston come in 2 years later. So we're talking 2-3 years of being in Toyota Center. OR they could tell Fertitta "either you work something out with Freidkin or all we're going to be able to do for you is a renovation of your current arena and you're going to have a competitor arena"

Now of course I don't know Houston well enough to say if downtown is even the best place for a hockey arena. I'll let the locals weigh in on that.

 

[KevFu]

In a way, that does seem like a win win for everyone. I guess the issue is, does Fertitta eventually stop with his hang up about the price of NHL expansion if that is the way that serves him the best - and more importantly, does the NHL ultimately accept that long term plan knowing the last plan that was pre-requisite of a university creating a new arena?

I don't see why the NHL would "need to accept" the future possibility for the NBA team. (And that concept was me spit-balling, who knows what the intentions of the actual parties are).

But it's not like the NHL team having an arena in downtown Houston, that the NBA team doesn't play in, is somehow a "bad thing" for the NHL franchise. It's BETTER to own control of your arena, or be 50/50 with the NBA team. What you don't want is a TENENT situation.

And that's kinda what playing in the Toyota Center would be, with Fetitta holding the lease and allowing the team to play there (for a cut). Now, the NHL could be fine with that sharing scenario, because the NHL covets the TV market and the financials of the lease are really a "Houston problem" and not an "NHL problem." AND it's really short-term. The lease is up after like 2033, and the earliest NHL Houston would be playing would be like 2029-2030.

However, if Fertitta won't agree to host an NHL team in Toyota center/Harris county

I'm pretty sure he's contractually obligated to, but it's not a detriment to Fertitta financially. The worry would be more that the NHL team isn't getting enough of the revenue. But again, it would be short-term.

And the fact that Fertitta has talked with the NHL about a team, renovated the Toyota Center to ensure it can host hockey, is Houston Sports through and through... this seems more like you have three parties ALL wanting an NHL team in Houston, and are finding a way to "get it done," rather than a battle between two billionaires over control of indoor sports in Houston (As Alexander vs Watson was).

 

[KevFu]

Dallas and Houston are the largest metro areas with only one arena (I count AllState Arena in Chicago) and the Mavs will probably build their own arena in 2031. So its just a matter of what, if anything, Harris County can do to facilitate a second arena within the county if they can't do anything financial (even infrastructure) then maybe he agrees to bink with the Rockets for a couple of years and then makes a deal for a successor arena. With the current lease ending in 2033, if the NHL likes sticks with the idea of staggering the teams out they could have Atlanta come in in 2028 or 2029 (depending on when they formally award a team) and then Houston come in 2 years later. So we're talking 2-3 years of being in Toyota Center. OR they could tell Fertitta "either you work something out with Freidkin or all we're going to be able to do for you is a renovation of your current arena and you're going to have a competitor arena"

Now of course I don't know Houston well enough to say if downtown is even the best place for a hockey arena. I'll let the locals weigh in on that.

Great post. Downtown probably is the best place for an arena, because of how massive geographically the metro area is. Unlike other places we've discussed, downtown Houston is the center of the clock.

Dallas is probably best example of how it can work. The Mavs had no problem letting the Stars join them in Reunion Arena, because in their old lease the Mavs didn't control the facility, and they worked out a deal for the Mavs/Stars to co-own a management company that controlled Reunion, and now controls AAC. So sharing wasn't giving up anything.

We used to say that "NHL Houston has to go through Alexander" because the Rockets' owner's stake in NHL revenues from the arena was are already in the lease. Any non-Alexander owner would have to accept those terms in order to get an NHL team there, because a second publicly funded arena just wasn't an option.

But the lease is so close to the finish line that it's not a road block anymore. You're "losing" revenue by not having full control of the arena for only a few years, but those are the most lucrative years of any franchise because you're brand new, no one cares if you're good or not, and you're selling merch to fan base that doesn't already own any.

And it takes 3 years to build a new arena anyway, so you could get the team, spend a few years building towards your on-ice debut and then switch your focus to a new arena and have it time out with the end of the Toyota Center lease.


The other aspects, and why I really think this is a Fertitta "Teamwork" thing for Houston: Any new pro sports franchise needs a TV deal. Well Fertitta already co-owns the Space City regional network with the Astros. And he wants to bring a WNBA team to Houston as well. So now you'd have NBA, NHL, MLB and WNBA on Space City. Two summer, two winter. So you need a "Space City overflow channel" which is doubling TV ads to sell. So you're not losing money cutting Friedkin into Space City; you need a second arena for NBA, NHL, WNBA and all the outside events you want to host, and UH being involved makes perfect sense as the Cougs could sell NBA arena tickets, and the UH programs would benefit greatly from NBA/WNBA facilities.

The synergy is there for these guys to be partners because you're not "losing business" with the NHL owner joining you, you're fully doubling the business if you use the amount of money you're willing to spend on an NHL team (that is lower than the asking price) and use it on a WNBA expansion fee, and a new "Houston Basketball Pro/College/Men/Women" arena for four teams.

 

[dj4aces]

And it takes 3 years to build a new arena anyway, so you could get the team, spend a few years building towards your on-ice debut and then switch your focus to a new arena and have it time out with the end of the Toyota Center lease.

I think it depends on what the NHL actually wants. If the league values the market over a new barn, then I could see them coming out this summer and saying "Houston to begin play in 2026-2027", which would give Friedkin time to acquire the Aeros name from the Wild (current trademark holder), negotiate a lease to play in the Toyota Center for a few years, and get the ball rolling on all the political stuff involved in building a new arena. In this scenario, they could also announce Atlanta to begin play in 2028-2029 at the same time, which would give Krause (arguably, the prospective owner of an Atlanta franchise that is farthest along in the process) time to build his arena under that three year timeline.

If the league values a building owned by the franchise owner (for the sake of revenue), do they announce Atlanta first to begin play in 2028-2029, giving Friedkin time to follow similar steps Krause did here (tour a building or two, acquire land and zoning, etc) and award him with a franchise when those steps are complete a little later down the line?

Or does the league do something else?

 

[Major4Boarding]

Found this just a few minutes ago. It's got the actual letter embedded too.

Fertitta, who has owned the NBA's Houston Rockets since 2017, said he does not plan to divest from the professional basketball team, adding he “will not participate personally and substantially in any particular matter that to my knowledge has a direct and predictable effect on the financial interests of the NBA.”

"I have been advised that during my service as ambassador, the embassy may address particular matters affecting the financial interests of the [NBA]," he wrote. "The agency has determined that it is not necessary at this time for me to divest my interests in the Houston Rockets because my recusal from particular matters ... will not substantially limit my ability to perform the essential duties of ambassador."

Also...

Houston billionaire Tilman Fertitta, in a letter this month to the U.S. State Department, said he intends to resign from hospitality company Landry’s and several other business ventures if he is confirmed as the U.S. Ambassador to Italy and San Marino.

"Upon confirmation, I will resign from my position with the entities listed in Appendix A," Fertitta wrote in the March 16 letter, filed with the U.S. Office of Government Ethics. "I am eligible to receive a severance payment from Fertitta Entertainment, LLC, but I have elected to forfeit it. I will receive a lump sum payment of my deferred compensation plan following my resignation."

See article for further details and Appendix A

 

[TheLegend]

Found this just a few minutes ago. It's got the actual letter embedded too.


Also...


See article for further details and Appendix A

I remember him being up for an ambassadorship. Interesting he would divest himself from his positions (other than he's not going to have the time to administer them) but I don't think it affects whatever percentages of holdings he has.

 

[aqib]

I remember him being up for an ambassadorship. Interesting he would divest himself from his positions (other than he's not going to have the time to administer them) but I don't think it affects whatever percentages of holdings he has.

When Woody Johnson became ambassador to the UK he just had his brother run things while he was gone. So it was his brother who hired Saleh as head coach. Dan Rooney had his son running things when he was ambassador to Ireland. Neither one had to divest anything.

I am sure whoever is put in charge of the Rockets wouldn't be making a decision on sharing the arena without Fertita's consent.

 

[StreetHawk]

When Woody Johnson became ambassador to the UK he just had his brother run things while he was gone. So it was his brother who hired Saleh as head coach. Dan Rooney had his son running things when he was ambassador to Ireland. Neither one had to divest anything.

I am sure whoever is put in charge of the Rockets wouldn't be making a decision on sharing the arena without Fertita's consent.

most important job for the owner is hiring the President/GM who will run things for the team. if the Rockets are stable, it won't be an issue over the time TF is serving as an Ambassador. But, once he takes the position, I don't see him having the time to help setup the organization structure of an NHL team.

I'm sure as we approach the final 2 years or so of the lease, that's when talks really need to heat up. IMO, so long as the space is there in the Toyota Center to accommodate any new features that help generate revenue, a renovation seems to be a more logical option than building a new arena. Unless, there is a real estate play in building up an entertainment district around a new arena.

 

[aqib]

most important job for the owner is hiring the President/GM who will run things for the team. if the Rockets are stable, it won't be an issue over the time TF is serving as an Ambassador. But, once he takes the position, I don't see him having the time to help setup the organization structure of an NHL team.

I'm sure as we approach the final 2 years or so of the lease, that's when talks really need to heat up. IMO, so long as the space is there in the Toyota Center to accommodate any new features that help generate revenue, a renovation seems to be a more logical option than building a new arena. Unless, there is a real estate play in building up an entertainment district around a new arena.

The business side can be handled by the Rockets business people. As far the GM/hockey side that would be done when you're 2 years from the start date. Fertitta will only be in this job for 3-3.5 years. So if you're talking 2030 or later he'll already be done with the job by the time he has to decide on that.

 

[Voight]

Fertitta controls the Toyota Center. Logically, no benefit for him to having an NHL team there without any skin in that team. So, what kind of revenue can an NHL get out of being a Tenant? Just game day revenue, I would guess. Is that enough for an NHL team to survive? Nash is a tenant at Bridgestone, but they are the primary tenant so get a pretty favorable deal.

The other options are for Freidkin to privately fund another arena in the same vacinity as the Toyota Center or move further outside the region per the Harris county agreement in order to obtain government funding for a new arena. But, would need to make sure that location works for the NHL and other events as that is going to be competing with the Toyota Center for those non sporting events.

It depends on how much he wants to commit financially. His net worth is pegged at 7.5 billion. A new arena is going to cost at least $1bn, plus another billion for the expansion fee. So he'll be in the hole 2bn minimum before he even begins putting an actual team together.

 

[aqib]

It depends on how much he wants to commit financially. His net worth is pegged at 7.5 billion. A new arena is going to cost at least $1bn, plus another billion for the expansion fee. So he'll be in the hole 2bn minimum before he even begins putting an actual team together.

Well if Toyota Center can be renovated then you can avoid that.

However, if he balked at $500M (Vegas) and $650M (Seattle) and $1.2 billion (Utah) I doubt he will go to the higher price for an expansion fee.

So the options are either make some sort of arena sharing deal with Friedkin or let Friedkin build his own arena and compete with him.

 

[Voight]

Well if Toyota Center can be renovated then you can avoid that.

However, if he balked at $500M (Vegas) and $650M (Seattle) and $1.2 billion (Utah) I doubt he will go to the higher price for an expansion fee.

So the options are either make some sort of arena sharing deal with Friedkin or let Friedkin build his own arena and compete with him.

I was talking about Friedkin.

 

[covfefe]

It depends on how much he wants to commit financially. His net worth is pegged at 7.5 billion. A new arena is going to cost at least $1bn, plus another billion for the expansion fee. So he'll be in the hole 2bn minimum before he even begins putting an actual team together.

That's what PIK toggles are for

 

[rojac]

Well if Toyota Center can be renovated then you can avoid that.

However, if he balked at $500M (Vegas) and $650M (Seattle) and $1.2 billion (Utah) I doubt he will go to the higher price for an expansion fee.

So the options are either make some sort of arena sharing deal with Friedkin or let Friedkin build his own arena and compete with him.

There would be one more option wihich would be for Fertitta to sell the Rockets to Friedkin.

 

[StreetHawk]

It depends on how much he wants to commit financially. His net worth is pegged at 7.5 billion. A new arena is going to cost at least $1bn, plus another billion for the expansion fee. So he'll be in the hole 2bn minimum before he even begins putting an actual team together.

Expansion fee more likely to be at $1.5 Billion or higher. TB sold a chunk of their team at a $1.8 billion valuation in 2024. Relative market size of Hou and ATL, I would expect the NHL to use that as a comp for what they will ask.

Location of the arena will be a huge factor in the cost that Friedkin will have to pay. If its in Harris county, it's more out of his pocket or from other investors he can gether. If it's in another county, then government can get involved. If you're going to build an arena yourself in Harris county, going to have to look into the real estate aspects of it. One of the reasons Cuban gave for selling the Mavs is that he felt when their lease is due up in 2031 that they would be looking at building their own area, which also includes entertainment distinct/casinos and stuff, which isn't something he was keen on having to do. He doesn't want to be involved in big real estate transactions.

 

[Voight]

Expansion fee more likely to be at $1.5 Billion or higher. TB sold a chunk of their team at a $1.8 billion valuation in 2024. Relative market size of Hou and ATL, I would expect the NHL to use that as a comp for what they will ask.

Location of the arena will be a huge factor in the cost that Friedkin will have to pay. If its in Harris county, it's more out of his pocket or from other investors he can gether. If it's in another county, then government can get involved. If you're going to build an arena yourself in Harris county, going to have to look into the real estate aspects of it. One of the reasons Cuban gave for selling the Mavs is that he felt when their lease is due up in 2031 that they would be looking at building their own area, which also includes entertainment distinct/casinos and stuff, which isn't something he was keen on having to do. He doesn't want to be involved in big real estate transactions.

Building outside of Harris County seems really risky. Unless there's a massive cluster of hockey fans outside of the county, I dont see that being the smart move. You'd be putting an arena away from the majority of the population and depending on the area, far from any public transit hubs.