Tilman Fertitta, the owner of the NBA’s Houston Rockets, has confirmed his next position. The billionaire businessman is all set to become the USA’s next ambassador to Italy and San Marino. But that will come at a (modest) cost. While Fertitta will retain his role as the Houston Rockets owner, he will have to forgo a few perks enjoyed as the owner of Fertitta Entertainment LLC and other ventures. What does it mean for the Texas tycoon? What will be the impact on his current fortune? Past instances reveal a surprising trend.

Inside Fertitta’s Empire: Casinos, Real Estate, and Rockets

Fertitta Entertainment LLC is valued at $6B. He is also the owner of restaurant giant Landry’s Inc. and Golden Nugget Casino, the erstwhile Trump Marina Hotel Casino, which he purchased in 2011 and pumped $150M into for renovation. As the CEO of Fertitta Entertainment LLC, the 67-year-old Houston businessman earns $1.8M per year as a salary. 

But the actual earnings are much more. 

For instance, the Ethics filings revealed that Tilman Fertitta receives $5 million in annual dividends as the CEO of Fertitta Entertainment. Moreover, Fertitta also has bought Chevrolet and Lotus car dealerships. Something he was looking to expand on as well. Houston Rockets, too, have a profitable venture for Fertitta. He purchased it for $2.2B in 2017. The franchise is now valued at $5.7B. 

In addition to his $1.8M salary as CEO of Fertitta Entertainment LLC:

• He earns $5M annually in dividends,
• Has investments in Tegna Inc at $25M and in Draftkings and Wynn Resorts at $50M.
• Holds significant stakes in companies like Coca-Cola, Warner Bros., and Walt Disney Co worth $6M.
• Owns car dealerships (Chevrolet, Lotus) and over 600 properties across 36 states and 15 countries.
• Has invested $450M in Houston’s River Oaks District, which he planned to expand.
• Has disclosed liabilities include $250M in real estate loans, $80M in aircraft loans, and $100M in yacht loans.

Furthermore, Tilman Fertitta pocketed at least $430,006 in interest from his holdings and realized capital gains of at least $100,202, according to the Houston Chronicle. Overall, Tilman Fertitta’s net worth stands at $10.9B, per Forbes. Currently, the billionaire businessman has spread his wealth across 600 properties in 36 states and 15 counties, employing over 600,000 workers, according to Business Day.

Notably, Fertitta planned to scale back operations in the fast-food sector, citing the rising cost of construction, labor, and leases as the reason for an impending slowdown. Notably, the Houstonian furloughed 45,000 employees in 2020. On the other hand, Fertitta recently shared his interest in floating a reservation a la Corner Store in SoHo, New York. Additionally, he was doubling down on casinos.  But he has to forego a chunk of these responsibilities and the perks associated with them. But to what extent? 

How much will Fertitta earn as an ambassador? 

While the business tycoon will leave the CEO’s chair of Fertitta Entertainment LLC, it’s not clear if he has to forgo his other business interests as well. In the letter to the Office of the Legal Adviser of the U.S. Department of State, Tilman Fertitta wrote, “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.”

He also shared that he would retain a ‘passive interest in these entities’, but that will only involve ‘passive investment income’. The 67-year-old will enter into a contract with Fertitta Entertainment LLC, where he will retain a stake for either a fixed annual income or their out-of-pocket expenses. 

As the US Ambassador, Tilman Fertitta will be entitled to an annual salary of around $195,656. In most cases, ambassadors have a fixed tenure of three to four years, but that’s liable to extension depending on the executive’s decision. Fertitta, of course, can come back to retake his position at the helm of his business empire. That’s what his predecessors did as well. 

The Playbook: When Sports Owners Go Diplomatic

Before Tilman Fertitta, Woody Johnson of the New York Jets served as the ambassador to the United Kingdom. Before assuming that position, his yearly income from dividends on Johnson & Johnson was around $5M. His net worth at that time was $4.2B, per Bloomberg. The ethical filings revealed: 

1. 1100+ stocks, bonds, and securities that pushed his assets to $1.7B sans the New York Jets.
2. Over $50 million in shares of New Brunswick, New Jersey-based J&J. His holding was valued at $205M.
3. Interest from New York Jets and the stadium was listed at over $50M. Another $50M in cash was staked in a BankUnited Inc. account.

His salary as the US ambassador was modest compared to this. After spending four years on the other side of the Pond, Johnson returned to take charge of the New York Jets and assume his previous positions. 

In 2022, a year after his return from the United Kingdom, Johnson’s net worth was pegged at $3.4B by Forbes. Now, his estimated net worth stands at $3.3B. Bloomberg, however, reports his assets have grown by $50M in the last 12 months. 

Similarly, before Woody Johnson, Pittsburgh Steelers owner Dan Rooney was appointed as the ambassador to Ireland in 2009. Rooney’s income also took a subtle hit. Before his overseas trip, he was one the richest sports team owners in the country.

• Rooney’s financial disclosure revealed he earned $2.8M as a Steelers owner over an 18-month period. 
• He earned $1.2M from Rooney Enterprises.
• $900,000 came from his investment in West Palm Beach Racetrack.

The Pittsburgh Steelers were valued at approximately $1.02B in 2009. Eight years later, at the time of Rooney’s passing, the team was valued at $2.25B, per Forbes. Currently, it’s valued at $5.3B.

Tilman Fertitta will follow in the footsteps of Rooney and Johnson. The Texas billionaire is now part of the rare group of sports team owners who had the honor of representing the Stars and Stripes overseas. The cross-section of sports and executive roles has been an interesting phenomenon in recent years. 

However, it should be noted that the ambassadorial role is not the established route for team owners yet. But appointing business leaders as ambassadors is not unprecedented. In that light, can we expect more sports team owners in this position in the coming years? The answer might just be a yes.