Like everyone, Fertitta remembers when the reality of the coronavirus first became tangible. A few days before shutdowns swept the country, he was on a private flight to Los Angeles to watch the Lakers square off against the Houston Rockets (Fertitta purchased the team in 2017) when the plane was turned around. The game had been suspended as a spate of positive COVID-19 cases popped up within the NBA.
From the get-go, Fertitta knew the virus wasn’t going to be a two-weeks-and-done affair. It’s perhaps one of the reasons why he was an early proponent for re-opening businesses, at least at a limited capacity. He warned of an extended economic crisis if shutdowns persisted. Other leaders rallied behind this stance, but he also faced immediate backlash. Critics accused him of prioritizing the company’s bottom line over public safety.
A year later, he’s still nettled by some COVID-era policies that vary widely by state. The company, which is based in Houston, was able to reopen its Texas locations at the beginning of May 2020. By contrast, its Los Angeles restaurants didn’t reopen until nearly a year later.
Although Fertitta has disagreed with certain regulations, they didn’t stop him from taking swift action. In March 2020, Landry’s furloughed 40,000 employees (about 70 percent of staff) but also took steps to support workers and keep the restaurants afloat. The company expanded its partnership with on-demand food ordering and delivery provider Waitr, which in turn offered jobs to furloughed Landry’s employees.
By April, a more aggressive plan was in place. Under the shutdowns, Landry’s was losing $1 million per day in revenue and had drawn $300 million of its existing credit line. So the company invited investors to participate in a $250 million loan with an enticing 15 percent interest rate that would mature by October 2023. Fertitta also funneled $50 million of his own money into the loan.
The whole episode illustrated the dual nature of running a large, private venture. On one hand, the company didn’t have the same on-demand capital of public companies. On the other, it was able to act fast.
“People come to us from big corporations and they go, ‘Wow, we can’t believe how quickly decisions get made and how much red tape is cut out.’ We’re a very streamlined company, and I think that comes again from Tilman and how he’s able to make a decision and move on,” says Gerry Del Prete, senior vice president of gaming at Fertitta Entertainment.
But that decisive nature is not tied to the business’s status as a private company so much as it is to the founder. In 1993, Landry’s made its initial public offering and subsequently operated as a public company before going private again in 2000. Before COVID-19 hit, Fertitta was already exploring the possibility of another IPO. Based on a typical market cycle, he’d been expecting a period of contraction—though not something as drastic as a pandemic—followed by an economic boom. Landry’s was also being outbid by public entities on a number of acquisitions, and Fertitta knew going public would give it more bargaining power.
The pandemic may have delayed the timeline, but the company is now slated to go public by the end of the first quarter. That said, it’s an entirely different process from nearly two decades ago when Landry’s entered the stock market with a mere 10 restaurants—something that Fertitta says would never happen today.
This time around, the company—valued at $6.6 billion—is merging with a special purpose acquisition company, FAST Acquisition Corp., to expedite the process. Fertitta will maintain a 60 percent controlling interest and continue to serve as CEO and president, as well as chairman of the board.