Here’s what I can’t find: How much will Chris Paul make if he signs a non-supermax as a free agent with another team? I’m guessing $150-$165/4 years but I can’t find any article talking about it. But let’s just say it’s $160/4.
It’s now been leaked that Chris isn’t taking less than the supermax from the Rockets at $209/5 — remember he planned this a long time ago when he basically created the new CBA so that he’d get in one last max before he turned 38.
The way CP3 worked it, he’d get to keep his last year of the Clippers deal ($25-30m if I remember right) rather than opting out and then sign a super max this year with a different team, maximizing his money and getting his desired destination.
The problem is now the wink-wink deal he had with Daryl Morey is looking horrendous from the Rocket’s side and Houston wants no part of giving a chubby, oft-injured and past his prime point guard a fully loaded max deal that has him receiving $40m a year past his mid 30s.
Were he dealing with a dumb money owner, it might happen. But something black swanish happened: the Rockets changed owners.
The new owner is Tilman Fertitta and first of all, if you’ve ever seen his Billion Dollar Buyer show on CNBC, he doesn’t just hand out cash. He rakes entrepreneurs over the coals to get the best deal possible out of them, many times forcing them into Costco “volume” type deals where their margins are diminished.
Second of all, Tilman is broke. No, for real. You might see him as a Forbes estimated $3.1 – $4.4 billion networth but he’s very much cash poor. Check out these numbers from the Rockets owner:
From Law360: “Casino and hotel operator Golden Nugget Inc. announced Wednesday that it had priced a $1.415 billion notes offering and that it will combine its casino operations with those of restaurant chain operator Landry’s Inc., joining the two companies, which are both owned by a Texas billionaire.”
From PRNewswire: “The Senior Notes will be issued under the indenture, pursuant to which Landry’s initially issued $600 million in aggregate principal amount of its 6.750% senior notes due 2024 on October 4, 2016.”
Along with the selling of bonds, Fertitta PERSONALLY borrowed $275 from previous owner Les Alexander. On top of that, I read Tilman has $175m of assumed debt.
Here are the full financial details of the bulk of the cash raising: http://www.ifre.com/billionaire-seeks-slam-dunk-money-for-rockets-buy/21307331.fullarticle
In other words, this guy is cash poor. He might have a lot of assets but you can’t buy stuff with assets.
Also, take notice of the 6.75% rate on those bonds! That’s very high! The higher the rate on the bond, the riskier they are deemed to be which means the less money people have :/ which means the Rockets aren’t going into the luxury tax, at least not very far.
Dear Chris Paul,
You might have weaseled your way into crafting the perfect financial fairy tale scenario under the new CBA but you’re about to get crushed to the tune of hmmmm about $50m.
PS You have no leverage because no other team will come close to paying you the supermax (nor can they if you become a free agent) so you can say you won’t take less but you absolutely will.
Also, let’s not forget that CP3 took a knee on what was for all practical purposes, the NBA Finals. For the last 2 games of the WCF (the Finals), Paul sat out with a hamstring pull. Seeing as how the Rockets didn’t need you in the next round and the championship was on the line, probably should have at least hobbled out their for at least morale.
This contract situation is probably karma for all the BS fouls Chris Paul has drawn over the years.