Mutombo buying Houston Rockets is a disaster waiting to happen

Zimran Jacob
Zimran Jacob
Zimran Jacob
Contributor

Dikembe Mutombo is an NBA icon. He would crush the dreams of many players trying to score in the lane and he has the Hall of Fame enshrinement to prove it. On top of all that, he’s now Geico famous. Despite all this, it seems a dubious move to make Deke a partial owner of a team when he’s not even cutting a check.

Does owner popularity play into a team valuation? Let’s take a look at a recent example with the Los Angeles Clippers. When Donald Sterling was forced by the league to sell his team, Steve Ballmer paid $2 billion. Over the next few years, a team with Chris Paul, Blake Griffin, DeAndre Jordan, and JJ Reddick grew to a whopping… $2 billion.

What goes into the valuation of an NBA team is a combination of factors, some of which are ticket sales, revenue, operating income, player salary, the size of the market and metro area, and the overall value of the team brand. Owner popularity in itself does not help the team.

Is a Hall-of-Fame career enough to ensure franchise success? Definitely not. Michael Jordan owns the Charlotte Hornets. Despite a load of talent, the team has not been able to achieve any level of success that would compare to Jordan’s playing career. Regardless, the franchise’s net worth has increased from $175 million in 2010 to $780 million in 2017.

It can be argued that Jordan’s playing career is a strong negotiating point, but that is one that Mt. Mutombo can’t emulate. It’s difficult to compare the Rockets to Charlotte, which was an expansion team when it started, but one can be certain that the allure of playing for a player considered the G.O.A.T. is much greater than playing for a Hall of Fame shot blocker.

The actual factors in maximizing the Rocket’s net worth will be luxury tax and ticket pricing strategy. When analyzing teams such as the Cavs and the Clippers, one can see that both are losing net worth due to their luxury tax expenses. The Clippers also lost out on a lot of money with their incredibly cheap tickets. Ticket prices factor into the operating revenue and the franchise definitely had the opportunity to raise the prices with such a star-studded roster as they had in the 2016-2017 season. A Clippers ticket could be had for $9 when the cheapest Lakers tickets were often $30. The Rockets should not miss a golden opportunity such as the addition of Chris Paul to raise prices in an effort to increase revenue. All this work is done without Mutombo.

The best dealmakers can sell ice to an eskimo. It seems as this is the strategy Dikembe is trying to employ. His pitch to money people is without substance, and business people are right to be skeptical.

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