Lenders could argue economic downturn fulfills interpretation of termination clause in loan agreement
Wednesday, April 29, 2009
Legal experts say the banks attempting to back out of their commitment to finance the Fontainebleau Las Vegas might defend their decision by arguing the economic downturn that has created doubts about the project’s future is an act of God. Fontainebleau has sued the banks, accusing them of breaking the terms of the $800 million loan agreement.
Rare convergence is needed for big casino to change hands
Monday, April 27, 2009
Nevada’s largest casino company wants to know if you are in the market for a casino and have several hundred million dollars to spare. Some Wall Street analysts believe every casino in the MGM Mirage empire is for sale with the likely exception of its original namesake, MGM Grand.
Phil Ruffin sold a series of other businesses to get the cash to buy big
Sunday, April 26, 2009
Phil Ruffin prefers numbers to grand statements. The man who went against the grain, made big money, became a hero and got the girl isn’t much for self-aggrandizement.
Fontainebleau Las Vegas today filed a $3 billion lawsuit against a group of bank lenders, saying the banks reneged on their commitments to provide funding for the resort in a "baseless attempt to walk away from the project."
Deals that once made sense led to borrowing that hangs over gaming giants
Saturday, April 18, 2009
Through two mergers proposed five years ago, the Las Vegas Strip largely became the domain of two corporate titans. In 2004, MGM Mirage proposed an $8 billion acquisition of Mandalay Resort Group. Months later, Harrah’s Entertainment announced a $9 billion offer for Caesars Entertainment — a “me too” deal made possible by Wall Street’s heightened interest in the casino business.
CityCenter partners MGM Mirage and Dubai World are hammering out a plan that aims to guarantee funding for the financially troubled project due to open this year, according to sources who declined to be named.
Gaming analysts Bill Lerner, Rich Moriarty and Grant Govertsen have left Deutsche Bank to form Union Gaming Group, an independent gaming industry research firm based in Las Vegas.
By law, developers can’t build casinos near churches unless in a zone close to the Strip. Their solution: Expand that area.
Wednesday, April 15, 2009
The Guardian Angel Cathedral has for decades symbolized Las Vegas’ belief that community institutions can flourish alongside its gaming ambitions. Even so, the church now stands in the way of Steve Wynn’s plans to build a casino on the company’s golf course. It’s an unanticipated consequence of a 1997 law that established an unrestricted gaming corridor along Las Vegas Boulevard, while adopting tougher restrictions on casino construction beyond the Strip.
30-day extension gives bond holders until May 15 to consider plan
Tuesday, April 14, 2009
Station Casinos and its lenders have agreed to extend by 30 days a voting deadline on a proposed bankruptcy reorganization plan that would leave the current owners, including the Fertitta family and investment partner Colony Capital, at the company's helm, a company spokeswoman said today. The May 15 deadline gives holders of $2.3 billion in bonds more time to consider Station Casinos' offer to buy back investors' bonds and exchange them with new, discounted notes with extended maturity dates.
Casino executives take sober tone as new reality sets in
Monday, April 13, 2009
MGM Mirage CEO Jim Murren said last month he harbors no ill will toward people who think the company will fail. “I have no illusions that this is going to be easy,” he said during a conference call with analysts last month. “We will take every question, we’ll take every criticism, and we’ll own it all." He added: “This is not without risk.”
Under a new employment contract effective Dec. 1, MGM Mirage Chief Executive Jim Murren will receive a salary increase of $500,000 and will be eligible for additional performance-based cash awards of up to $4.25 million.
Dubai World, which owns half of the financially troubled CityCenter project on the Strip, is pressing CityCenter partner MGM Mirage and CityCenter's bank lenders for a commitment that would allow the project to be completed without fear that the project would be thrown into bankruptcy, according to a source familiar with the plan.
Banks didn’t think they needed collateral in MGM Mirage’s resorts on Strip
Tuesday, April 7, 2009
When MGM Mirage negotiated a $7 billion financing package with its banks in 2004, the company was worth more than $10 billion. The company was in such a powerhouse position that banks didn’t ask for collateral. That’s one reason why these bankers have been so accommodating with MGM Mirage in recent weeks.
Without big bonuses, some executives are out the door
Monday, April 6, 2009
When times were good, casino executives were richly rewarded with performance-based compensation packages worth, on paper, up to tens of millions of dollars a year.
Australian billionaire and casino magnate James Packer is considering an investment in CityCenter, the Wall Street Journal reported Friday. Packer's casino company, Crown Ltd. Of Australia, owns a 19.6 percent stake in the Fontainebleau resort under construction in Las Vegas.
The drama surrounding the financially troubled CityCenter project has thickened, with a major investor interested in the $8.7 billion project and MGM Mirage disclosing a contingency plan should CityCenter seek bankruptcy protection.
Losses widened for Station Casinos in the fourth quarter of last year as the company reported net losses at its major Las Vegas casinos. Station today reported a net loss of $3.2 billion in the fourth quarter compared with a loss of $437.4 million for the same period a year ago.
Buffet, self-serve drink stations, payback rates all part of the success
Tuesday, March 31, 2009
To enter M Resort is to step back in time, to 2006, before the recession slashed discretionary spending. Lines for the buffet and coffee shop snake around banks of slot machines, where most seats are taken. Well-dressed locals pack bars and lounges, some waiting for a seat in busy restaurants. While some suburban casinos struggle to attract more business, the M’s restaurants are serving more than 8,000 covers per night. Weeknights look much like weekends, with long lines for the players club and the buffet.
MGM Mirage’s cash payment keeps construction going, but can’t guarantee future stability
Saturday, March 28, 2009
MGM Mirage’s $200 million injection in CityCenter Friday answered questions about the project’s immediate fate. But the long-term future of the joint venture — and of MGM Mirage itself — remains in doubt as the company struggles with massive debt and a suddenly uncooperative partner, Dubai World. MGM Mirage’s payment allows construction to continue on the project billed as an unprecedented urban metropolis on the Las Vegas Strip — at least until the remaining $800 million in construction funding is due.
Experts say Dubai World’s lawsuit not an attempt to exit, but to exert greater control
Wednesday, March 25, 2009
Dubai World argues in the lawsuit it filed this week that MGM Mirage has defaulted on its CityCenter agreement, giving the foreign conglomerate the legal right to sever the relationship. But gaming industry analysts and other observers say the real purpose of the lawsuit is not to break the partnership.
Developers are planning to sell 22 acres near Chinatown – the site of a proposed Asian-themed casino – at a bankruptcy auction May 16. The land took seven years to assemble and is zoned for a 28-story, 2,200-room hotel.
Dubai World files suit against partner, MGM Mirage over $8.7 billion project
Monday, March 23, 2009
CityCenter's joint venture partner Dubai World is suing MGM Mirage, claiming MGM Mirage breached terms of the joint venture agreement to develop the $8.7 billion project, forcing Dubai World to fork over more money than expected for CityCenter while MGM Mirage's financial future is in doubt.
Prolonged price cuts, experts say, can harm brands such as MGM Mirage
Monday, March 23, 2009
A business model gaming companies have followed for decades has turned into a precarious balancing act, as casinos slash room rates to levels not seen in more than a decade. Cheap rooms have been a fail-safe way for gaming chiefs to fill their casinos with gamblers and keep profits up in down economic times.
Ruffin working toward $20 million discount for paying in cash
Thursday, March 19, 2009
Treasure Island came under new ownership Friday morning. After months of a pending sale, Kansas billionaire Phil Ruffin was to take over the newly purchased property. The Nevada Gaming Commission approved Ruffin’s purchase of Treasure Island Thursday.
Their divorce is expected to be amicable, businesslike
Wednesday, March 18, 2009
Steve and Elaine Wynn are ending their marriage, but the business partnership that built Wynn Resorts into a Strip powerhouse is not breaking up. She wants to continue to play a prominent role in the company, and Steve Wynn wants her to remain active in Wynn Resorts, a source said.
MGM Mirage today reached an agreement with bank lenders that will give the company more time to figure out a solution to the company's cash crunch. Instead of granting bank lenders collateral in the company's assets MGM Mirage has agreed to repay some of the money it owes and pay a higher interest rate.
Strict regulation of industry, high earnings potential, make Chapter 11 a desirable option
Tuesday, March 17, 2009
Finally, a bit of good news for Las Vegas: Our casino behemoths might seek Chapter 11 bankruptcy protection. Taking a dire step like that conjures up images of companies failing in dying industries. Profits are down by more than 20 percent, but that’s hardly enough to kill off the world’s biggest gaming companies.
But other factors helped set big companies up for the fall
Monday, March 16, 2009
Harrah’s Entertainment Chief Executive Gary Loveman once described CityCenter, built by competitor MGM Mirage, as “the sort of casino God would build if he had the money.”
Australian casino giant Crown Ltd. has terminated its $1.8 billion purchase agreement for Cannery Casino Resorts to allow for more time to consummate a deal.
Denizen Hotels will also come to other tourist destinations
Wednesday, March 11, 2009
Hilton Hotels Corp. said Tuesday it's creating an eclectic brand called Denizen Hotels and is working to bring that brand to Las Vegas and other major destinations worldwide. The Denizen brand is expected to take the place of the Cosmopolitan, an under-construction resort at Harmon Avenue and Las Vegas Boulevard, as Hilton Hotels executives have been working at the Cosmopolitan site for months.
The messy departure of Las Vegas Sands’ Chief Operating Officer Bill Weidner, the culmination of a long-running fight between Weidner and Chief Executive Sheldon Adelson over the direction of the company, is just one of the many troubles facing the embattled casino giant in this recession. Like most casino companies, Las Vegas Sands is generating enough cash to make its debt payments. Analysts say the company will need to sell assets in Macau to offset debts in Las Vegas.
Plan calls for bank lenders to take equity in casinos
Tuesday, March 10, 2009
Herbst Gaming said today it has reached an agreement with lenders to file for Chapter 11 bankruptcy protection and split the company in two, with bank lenders becoming equity owners of Herbst's casinos and the Herbst family receiving 90 percent of equity in a separate slot route company.
After years of limited opportunities to buy and sell casinos, the topsy-turvy economy has opened the door for entrepreneurs to make unprecedented offers for choice properties in Las Vegas.
CityCenter, Cosmopolitan contractor looks to workers to cut projects’ costs
Saturday, March 7, 2009
CityCenter and Cosmopolitan general contractor Perini Building Co. has asked building trades unions to take pay cuts and make other concessions as they work to complete the financially troubled projects, according to several sources familiar with the negotiations. In meetings Thursday, Perini Chief Executive Craig Shaw and top executives of the CityCenter and Cosmopolitan projects asked for $2-an-hour wage decreases from about 11,000 trades members on those jobs, say sources involved in the discussion who did not want to be identified because the meetings were confidential.
Harrah's Entertainment on Wednesday announced a plan to exchange $2.8 billion in bonds for new notes with an extended due date – the latest in a series of efforts to lower the company's mounting debt burden.<
MGM Mirage today said the company needs more time to file its 10-K, or annual report, so that it can assess the company's cash needs in light of the worsening economy and "instability in the capital markets."
In 2000, a year after his father sold his Rio casino and began planning Steve Wynn’s Wynn Las Vegas and Encore casinos, Anthony Marnell III founded a company that makes planning software for contractors, architects and engineers.
Strip building boom, buyouts were ill-timed, and many see more pain in ’09
Sunday, March 1, 2009
Last year, Las Vegas gaming revenue fell to 2005 levels. No industry wants to go backward. But considering the stock market has plunged to 1997 levels and homes may take decades to return to their peak values of a couple of years ago, three years of gaming growth seems like a small hit in this economy.
Casino creator hopes to carve out a niche in recession by getting right what struggling giants got wrong
Wednesday, Feb. 25, 2009
Built on a hill with a dramatic view of the Las Vegas Valley, the M Resort features a television studio for live cooking shows, an on-site pharmacy, a rooftop restaurant, the world’s largest mother of pearl ceiling and a modern design of inlaid wood and cantilevered glass. But eye candy won’t sustain the $1 billion M Resort, which started construction two years ago when Las Vegas was booming and opens Sunday on the southeast corner of St. Rose Parkway and Las Vegas Boulevard South amid a recession with no end in sight.
Boyd Gaming has long sought to keep pace with Station Casinos — its more aggressive and, until recently, more profitable competitor in the suburban Las Vegas casino business — with mixed results. With Station facing imminent bankruptcy court filing, Boyd, the No. 2 locals casino company, has found an opening. On Monday, Boyd pounced with a $950 million offer for most of Station’s casinos, including its Texas, Aliante, Santa Fe and Green Valley Ranch Station casinos and its two Fiesta properties.
More than a decade after the seminal blackjack strategy book “Beat the Dealer” brought the shadowy art of card counting to the masses, opportunistic blackjack players in the 1970s and 1980s began wearing miniature computers that tracked the value of cards through slight movements of fingers and toes.
The company that owns the Oasis, CasaBlanca and Virgin River casinos in Mesquite moved one step closer to bankruptcy this week when it failed to make a $5.6 million interest payment before a 30-day grace period expired Feb. 15.
The Fontainebleau Las Vegas resort is expected to have trouble making interest payments once it opens for business this year because of the worsening economy and dim prospects for condo sales, bond rating agency Standard & Poor's said today.
Station Casinos issued a prompt response to a shareholder lawsuit filed last week. The company said the lawsuit is without merit because all bondholders are entitled to participate in its exchange offer.
Regulators, not invisible hand, guide supply to match demand
Monday, Feb. 16, 2009
For as long as anyone can remember, the Nevada Taxicab Authority has accommodated tourism growth in Las Vegas by annually letting more cabs onto the streets and allowing “special medallion” cabs to serve gatherings of at least 90,000 people.
Company ending employer contributions to 401(k) plans, trimming manager salaries
Thursday, Feb. 12, 2009
Following similar cost-cutting moves by other casino giants, Harrah's Entertainment has ended company contributions to employee 401(k) plans and is trimming managers' salaries by 5 percent.