Colony Capital appears anxious to become the new owner of the Hard Rock Hotel and Casino, assuming boss Peter Morton follows through on his decision to market the edgy bad boy of Las Vegas resorts.
Oh, yes, there is one other condition — that Morton not get a better offer from one of the other companies taking a look at all that Colony is contemplating.
Official sources were not available to confirm any of this, but industry insiders with good ties to the capital markets believe this is the scenario that appears to be shaping up. Credit Suisse First Boston will help with financing, assuming the deal continues developing in this direction.
Why would Morton sell now, a time when more expansion and an over-subscribed residence are in the works, a time when it would appear business has never been better?
"Why not," shrugged a savvy industry veteran who noted that Tony Marnell used similar strategy when he sold the Rio to Harrah’s in the late 1990s.
The same veteran added, "I’ve heard that Peter has some restaurant interests he wants to pay more attention to for a while."
Colony was seen as a company more interested in real estate deals, until it bought the Las Vegas Hilton and Resorts and the Atlantic City Hilton properties, as well as properties in Mississippi at a time when Caesars and Harrah’s (prior to their merger) were forced to sell some resorts.
Steve hasn’t lost
Steve Wynn says there is no chance he will abandon efforts to make his "Le Reve" production the big hit that was expected before its opening.
"I’m taking a stand on this one," he said. "This is a to-the-death effort. I want to have the best show in town."
Wynn says an additional eight- to ten-million dollars worth of improvement will be added during April and May as the tinkering of Le Reve (which means "the dream" in French) continues.
And there are definitive signs that the changes have been making a difference.
A show employee confides with a smile, "We’ve always been able to get free tickets but they recently cut us off."
Wynn set to crash
Wynn says the expected Sept. 5, opening of his Macau casino is going to bring a cure for the "huge sameness" that has characterized most of the casinos there for years.
Yes, he says, times are changing in Macau, as his team as well as those of MGM, Sheldon Adelson and Galaxy craft resort products that offer a new look.
For years most of the Macau casino win was posted in the private rooms, areas that had the most comfort and service. Wynn said about 70 percent came from these private casino areas and only about 30 percent was produced in the "general" or "common" casinos.
Wynn was told recently that this ratio is shifting and is now about 60-40 as the look of "common" gambling areas improves.
"The Wynn property is a change for Macau," he stressed, "because our general casino is going to be prettier than most of the VIP rooms."
Wynn expects to take possession of the completed building on July 27, and open about Sept. 5, but insists he will not hesitate to delay the opening by a matter of weeks if that is necessary guarantee the level of service he expects to offer.
As in Las Vegas, Wynn’s Macau property had more than enough applicants to fill every job. There were 54,000 applicants for about 4,400 jobs.
Added Wynn, "We are going to be making our entry to Asia with a very high level of service that is not there now."
Gulf business rising
MGM Mirage officials liked what they saw on the Gulf Coast during January, as only three casinos posted 69 percent of the revenue generated during the same pre-Katrina period a year ago.
And so the company has more than a thousand workers on the job, rebuilding its Beau Rivage and aiming for an Aug. 29 re-opening.
"We are confident of the future strength of Biloxi," said Mirage Division President Bobby Baldwin, who explained that the top 70-80 ZIP codes providing business have been surveyed to determine how those areas were affected by last summer’s hurricanes.
"What we know now," Baldwin said, "is that the business is there."
Not everyone greeted the recent Harrah’s New Orleans re-opening with big smiles and nods of approval. That is, if you accept news reports at face value.
That ubiquitous casino "expert," UNLV professor Bill Thompson, was quoted by the New Orleans Times-Picayune as saying the re-opening at that time was a bad idea that detracted from the efforts of other small businesses to get their staffing levels up to normal.
You really have to hope that Thompson was misquoted or the context of his statement to the paper was warped.
"It would be so much better if they waited six months so you’d once again have a tourist base." That’s what Thompson was quoted as saying in the newspaper. He appeared to suggest it would be a good idea to let the local McDonald’s outlets get back to pre-storm staffing levels, then re-open.
Once the crucial fast food sector of the local economy was up and running again, Harrah’s could then step up to the plate and do its thing.
The first thing I did was reach for the phone and call for the reporter whose byline was on this story. But the reporter could not be reached.
Was the quote correct, I wanted to know.
The thing is, the business of New Orleans is tourism and without entertainment there is no tourism. That was a statement attributed to some clear-thinking local official in a previous story.
Large numbers of people with jobs and money in their pockets are more inclined to spend freely than are the displaced poor who wonder where their next Big Mac is coming from.
his Vegas Nugget
Landry’s Restaurants Chairman Tilman Fertitta on the subject of the on-going renovation and expansion of the company’s Golden Nugget in Las Vegas: "We expect the Golden Nugget renovation is going to produce a huge payoff for us in ’07 and ’08. It will be completely redone by late 2006."
Fertitta said his approach to marketing the casino means he does not share the interest of previous owners in attracting big money gamblers.
"I’m not saying we don’t want people to like to gamble. We’ve had players come in and win or lose a hundred thousand dollars or so. What we don’t want are the professional gamblers who can come in and whack us for a million or more."
Has this approach helped the bottom line?
"October produced the best EBITA (earnings before interest, taxes and amortization) month in five years, and November and December were also very solid," Fertitta said.
"Pennsylvania has clearly been a bit of a disappoint," said Penn National Chairman Peter Carlino, as he assessed the lack of progress in awarding the pending licenses for racinos and slot casinos.
The numerous Las Vegas companies and personalities bidding for licenses must be nodding in unhappy agreement.