As Covid-19 continues to spread to the United States, Tilman Fertitta, owner of the Houston Rockets and CEO of Landry’s, Inc., a company that owns more than 600 restaurants, hotels, casinos and entertainment venues, has temporarily laid off 40,000 of its employees, he told Bloomberg. The layoffs mainly come from restaurant and hotel chains.
“I want to hire all the employees back,” Fertitta, who Forbes the estimates have a net worth of $ 4.6 billion, Bloomberg said. “This is very difficult for many working families, but we have to survive or there is no company.”
Fertitta, the 140th richest person in Forbes in America in 2019, stumbled at every stage of the Covid-19 pandemic and only the ridiculous public corrected his mistakes. Now, he told Bloomberg, he wants the authorities to allow businesses to reopen limited capacity in a matter of weeks to slow down their economic burden.
Here’s how Fertitta has run its business since the pandemic began to significantly affect America.
Fertitta has downplayed the seriousness of Covid-19
Until March 6, Fertitta said in an interview with CNBC: “Everyone must remember. This will not kill you unless you are most likely already a sick person … Other people will find out every day that they have it, but we must continue our lives. You won’t die from it. “
As of Thursday afternoon, the United States has over 78,000 Covid-19 cases and more than 1,100 people have died, including a teenager in California. On March 11, the NBA suspended its season and any other major American sport followed shortly thereafter. Now, non-essential companies have closed worldwide to slow the spread of the virus.
During his interview with CNBC, Fertitta went on to explain the financial implications of Covid-19, claiming to have lost $ 1 million in revenue from a $ 12 million base in restaurant sales. “But remember, the last million sales are your most profitable,” said Fertitta. “That’s where your big profit is, so if you don’t cut your expenses, what can you cut? We won’t cut the quality of the product. So you can only reduce labor.”
Fertitta tried to take away employee benefits
On March 17, following the closure of the restaurants and the transition to take away only, employees of the Post Oak Hotel in Fertitta in Houston were informed that their benefits would be reduced, due to Houston Chronicle. Paid holidays and paid leave were suspended and employees were told how to apply for unemployment.
But the public backlash forced Fertitta to reverse this decision less than 24 hours later, when Post Oak said it would retain the benefits for employees enrolled in its health plan until normal hours resumed, or June 30, 2020.
Fertitta dismissed 40,000 employees and supported the reopening of the companies
On March 25, the billionaire said he temporarily fired 40,000 employees and Bloomberg reported that, in total, his companies laid off 70 percent of their staff. Its restaurants are bringing in only four to five percent of their usual business.
He also supported the partial reopening of restaurants to mitigate the economic blow.
“I think what we’re doing with the arrest is good, but in a few weeks people will have to be with people,” Fertitta told Bloomberg. “Otherwise, you will enter an economic crisis that will take years to dig out.” He wants to reopen restaurants with a capacity of 30 to 40 percent.
Experts find it difficult to determine when the virus peak could reach the United States, but it could be months.
Everything that Fertitta has done with the Rockets has shown that she has above all profit
Fertitta purchased the Rockets for a record $ 2.2 billion in 2017, and fans have already tried it out. He cut corners by building his team’s register to avoid paying a luxury tax. In the low season 2018, months after Houston nearly eliminated Golden State in the playoffs, he let Trevor Ariza walk for what would likely have been $ 39 million. He also granted Luc Mbah a Moute to make a reasonable offer from the Clippers.
In particular, he also denounced the tweet from Daryl Morey, director general of the Rockets, in support of pro-democracy demonstrators in Hong Kong. The move was seen as an attempt to repair the tension between the NBA and its main international market, China.
In response to Morey’s tweet – which says “Fight for freedom, stay with Hong Kong” – Fertitta replied that Morey doesn’t speak for rockets. “Our presence in Tokyo focuses on promoting the NBA internationally and we are NOT a political organization.” He also considered firing Morey, known for being one of the best basketball GMs.
In the end, China suspended cooperation with the rockets, causing the franchise and the NBA to lose what Commissioner Adam Silver believed was hundreds of millions of dollars. A projection of the 2020-21 wage limit from January estimated that the limit would drop just $ 1 million per team from what was predicted before the accident in China, suggesting that its impact was less than initially expected.
On March 13, ESPN’s Ramona Shelburne reported on conversations within the NBA on how to end the season before Rudy Gobert’s positive test for Covid-19. For Shelburne, Warriors owner Joe Lacob pushed for a referral, and Thunder owner Clay Bennett noted that the players and employees of the league probably already had Covid-19. Fertitta, however, “suggested a three or four week hiatus while expressing frustration at the financial blow he had already taken with empty restaurants and early season problems in China.”
Why is everything so important?
The worst is yet to come to the United States, where cases of Covid-19 infection have not peaked. As economic instability increases, corners will be cut by those who have power that disproportionately affects those who are not.
In Bloomberg’s story, Fertitta has admitted that she plans to buy back some of her commercial debt with her new cash flow when the market starts to rebound. Doing so won’t help ordinary people who employ whose jobs have been cut.
However, he is confident that his assets have access to enough liquidity to overcome current volatility and he is also considering buying back part of Golden Nugget’s debt when things start to rebound.
“As soon as we see each other go round and everything reopens, we will 100% buy back our debt,” he said. “I see it’s a great opportunity.”
While the rich will always have the upper hand over ordinary people during times of crisis, there is power in public pressure.
On March 24, the Sixers attempted to cut employee wages at will, earning more than $ 50,000. So Joel Embiid, one of the Sixers’ highest paid employees, donated $ 500.00 to Covid-19 for medical care and promised to help those employees at will. The public backlash following Embiid’s generous offering forced Josh Harris – the team owner, whose net worth is $ 3.7 billion – to reverse his decision.
According to Adrian Wojnarowksi of the ESPN, “Other owners are watching Sixers and weighing the public relations fallout … no owner wants to log into Twitter and see his network worth trending after announcing this type of news.”
The Rockets have so far promised to “take care of” the employees of the Toyota Center Arena. We hope that Fertitta can learn to take care of its low-wage workers even outside of the rocket organization.