year on revenue of $1.1 billion.
Two years ago, Fertitta made another highlight-reel
acquisition. When his hometown NBA Houston Rockets
became available, he directed Landry’s to write him a dividend check for $1.7 billion so he could fulfill a lifelong dream
and buy the team. He’d been a season-ticket holder for
40 years and at one point a minority owner. The price tag:
$2.2 billion. To clinch the deal, he made a down payment of
$100 million to then-Rockets owner Leslie Alexander. “I
told him, ‘If I can’t close, the money is yours,’;” Fertitta says.
He closed in 50 days, an NBA record for a franchise
transfer. The price was an NBA record too. Told that he
might have overspent by a couple hundred million,
Fertitta’s response was: “What’s $200 million in 10 or 20
years?” He meant that the value of a modern NBA franchise goes in one direction—up. (The Brooklyn Nets just
changed hands for $2.35 billion.)
Bold moves such as buying the Golden Nugget and then
the Rockets may give the impression that Fertitta, 62, is your
swashbuckling, bet-the-ranch Texas wildcatter. He certainly
has the toys: a pair of Gulfstream GVs, two helicopters, and
a 164-foot yacht called Boardwalk. (He’s ordered a bigger
one, too.) He built the Post Oak Hotel not because Houston
needed a five-star hotel, but because Tilman Fertitta
needed one. He spent $400 million to build it. He paid cash.
But the flash can be deceiving. Last October, he o;ered
to buy the recapitalized Caesars, an audacious proposal
given that his Golden Nugget casino hotels are still jacks
compared with Caesars’ kings. When Eldorado Resorts
o;ered $17.3 billion for the company, a deal he found too
rich, Fertitta quickly folded. “I would have been gambling
my whole company, and I have a pretty good program as it
is,” he tells Inc. “When I was smaller, I took huge risks, but
now that I’ve made it, I can’t do that.”
Following the Rockets acquisition, the company started
grinding out its $4 billion in debt like a homeowner dutifully
paying down a 30-year FHA mortgage, only in this case to
the tune of $200 million a year. Fertitta’s goal is to make sure
“the paddle doesn’t hit my ass”—the unforeseen risk that
can strike any entrepreneur. Avoiding the paddle, and taking
advantage of companies that don’t, has made the increas-
ingly conservative Fertitta increasingly wealthy.
With the restaurant industry saturated and economic
slowdown in the air, Fertitta is experimenting with new
ways to finance deals. “We don’t have the flexibility to do
some of the things my dad relied on in the past,” says
Fertitta’s son and aide-de-camp, Patrick, 25. “So it’s just
being a little bit more creative.” For instance, Fertitta and
Je;eries filed an IPO for a special purpose acquisition company, or SPAC, which is a vehicle that can be used for anything—like, say, merging with another restaurant company.
In other words, if the economy goes south, Fertitta wants
to be ready. “You gotta remember,” he says, “I’m worth
$5 billion today because I’m an opportunist.”
Fertitta believes he was put on earth to be an entrepreneur.
As a kid, he says, “I never watched cartoons. I carried a
briefcase.” His father, Vic, owned a restaurant called Pier 23
“If You Confuse,
He built his empire from the ground up—and along
the way, learned a thing or two about working the
numbers and grabbing the public’s attention.