Rumors about a sale of Fontainebleau are nothing new. It's been over a year since the last round of speculation about who could possibly buy the property and maybe open it someday. Back then a sale was expected by the end of summer 2016.
Needless to say that never happened and we've been in a holding pattern ever since.
The lack of news about Fontainebleau made today's MGM Resorts International earnings call that much more surprising. Seemingly out of the blue Carlo Santarelli, Wall Street analyst at Deutsche Bank asked CEO Jim Murren about the property and how long it would take for a company to get it up and running.
Murren joked about the "rumor" and indicated MGM was not interested in the property, but speculated it would take 2 or 3 years for the resort to be operational. He also commented about Fontainebleau possibly being in a good location once the expanded convention center is finished, and thus would be more focused on the lodging aspect of the resort (rather than say gaming).
It's probably true that MGM isn't buying Fontainebleau, although it might be an interesting project for their MGM Growth Properties REIT subsidiary. Either way, hearing this chatter in the middle of the earnings call definitely got my attention. It seems like somebody knows something about a transaction happening soon. Or maybe they don't. The waiting game continues.
Showing posts with label MGM Resorts International. Show all posts
Showing posts with label MGM Resorts International. Show all posts
Thursday, July 27, 2017
Tuesday, January 03, 2017
2016 Las Vegas Stock Recap
With the calendar now showing January 2017, let's take a look back and see how Las Vegas stocks did in 2016.
The big three Las Vegas stocks - MGM Resorts International, Wynn Resorts, and Las Vegas Sands all had good years increasing by more than 20% each. The companies rode the wave of a recovering Macau market combined with strong non-gaming Las Vegas metrics.
In Macau Wynn Palace opened on the Cotai Strip in August. Sands opened The Parisian a few weeks later in in September. Meanwhile in the United States MGM National Harbor near Washington DC was opened in December to capacity crowds.
Caesars Entertainment stock finished the year up just over 7%. Caesars is still involved in seemingly never-ending bankruptcy litigation, but the stock could have some speculation value if they are able to escape bankruptcy with most of the company still in-tact.
Regional operators Boyd Gaming and Penn National didn't fare as well as their international counterparts. Boyd was up a slight 1.5% as they integrated their new Aliante and Cannery acquisitions. Penn was down 13.9% perhaps negatively affected by the anticipated opening of MGM National Harbor stealing business from their Charles Town property.
2016 Las Vegas stock results: (not including dividends)
The big three Las Vegas stocks - MGM Resorts International, Wynn Resorts, and Las Vegas Sands all had good years increasing by more than 20% each. The companies rode the wave of a recovering Macau market combined with strong non-gaming Las Vegas metrics.
In Macau Wynn Palace opened on the Cotai Strip in August. Sands opened The Parisian a few weeks later in in September. Meanwhile in the United States MGM National Harbor near Washington DC was opened in December to capacity crowds.
Caesars Entertainment stock finished the year up just over 7%. Caesars is still involved in seemingly never-ending bankruptcy litigation, but the stock could have some speculation value if they are able to escape bankruptcy with most of the company still in-tact.
Regional operators Boyd Gaming and Penn National didn't fare as well as their international counterparts. Boyd was up a slight 1.5% as they integrated their new Aliante and Cannery acquisitions. Penn was down 13.9% perhaps negatively affected by the anticipated opening of MGM National Harbor stealing business from their Charles Town property.
2016 Las Vegas stock results: (not including dividends)
| Company | Symbol | Start | End | Change |
| MGM | MGM | 22.72 | 28.83 | +26.9% |
| Wynn | WYNN | 69.19 | 86.51 | +25% |
| Sands | LVS | 43.84 | 53.41 | +21.8% |
| Caesars | CZR | 7.89 | 8.50 | +7.7% |
| Boyd | BYD | 19.87 | 20.17 | +1.5% |
| Penn | PENN | 16.02 | 13.79 | -13.9% |
Friday, June 03, 2016
Park MGM is new Monte Carlo Name
Monte Carlo will be renamed Park MGM as part of a $450 million remodeling project. The new name was announced in an MGM Resorts International press release earlier today.
The property will also feature a "hotel within a hotel" concept with NoMad Hotel occupying a small portion of the rooms. NoMad will be operated by the New York City based Sydell Group.
It's unclear what will happen to Monte Carlo's current "hotel within a hotel" concept Hotel 32.
Re-naming Monte Carlo after the adjacent Park promenade was a fairly predictable move, but attaching the MGM brand to the property is kind of a head–scratcher.
While I understand "MGM" is a valuable brand name to the company, having two different properties on the same street with MGM in the name could become pretty confusing.
I could see a drunk tourist who cant remember the exact name of the hotel telling a cabbie to take him to MGM which would probably get him dropped off at MGM Grand.
The property will also feature a "hotel within a hotel" concept with NoMad Hotel occupying a small portion of the rooms. NoMad will be operated by the New York City based Sydell Group.
It's unclear what will happen to Monte Carlo's current "hotel within a hotel" concept Hotel 32.
Re-naming Monte Carlo after the adjacent Park promenade was a fairly predictable move, but attaching the MGM brand to the property is kind of a head–scratcher.
While I understand "MGM" is a valuable brand name to the company, having two different properties on the same street with MGM in the name could become pretty confusing.
I could see a drunk tourist who cant remember the exact name of the hotel telling a cabbie to take him to MGM which would probably get him dropped off at MGM Grand.
Tuesday, May 31, 2016
MGM buys Borgata - Monte Carlo Rename Next?
Boyd Gaming has agreed to sell its 50% ownership stake of The Borgata in Atlantic City to MGM Resorts International for a purchase price of $900 million. MGM was already the owner of the other 50% stake, however Boyd was the operator of the hotel and casino.
The announcement was made via separate MGM Resorts and Boyd Gaming press releases.
After the sale is complete MGM Resorts will transfer ownership of The Borgata to their real estate subsidiary MGM Growth Properties. The MGP REIT will then lease the property back to MGM, who will operate the hotel and casino. Borgata will become an M Life Rewards property.
This transaction doesn't have a direct impact on Las Vegas, but there's an interesting wrinkle. Now that MGM owns 100% of The Borgata I assume they are free to use "Borgata" as a brand name in Las Vegas.
Last year it was announced that Monte Carlo would be getting a name change. I had speculated that Borgata Las Vegas would be a great name for Monte Carlo. MGM's purchase of The Borgata today takes that unlikely scenario one step closer to reality.
Update - June 3, 2016: I guess it wasn't meant to be. The new name of Monte Carlo is Park MGM.
The announcement was made via separate MGM Resorts and Boyd Gaming press releases.
After the sale is complete MGM Resorts will transfer ownership of The Borgata to their real estate subsidiary MGM Growth Properties. The MGP REIT will then lease the property back to MGM, who will operate the hotel and casino. Borgata will become an M Life Rewards property.
This transaction doesn't have a direct impact on Las Vegas, but there's an interesting wrinkle. Now that MGM owns 100% of The Borgata I assume they are free to use "Borgata" as a brand name in Las Vegas.
Last year it was announced that Monte Carlo would be getting a name change. I had speculated that Borgata Las Vegas would be a great name for Monte Carlo. MGM's purchase of The Borgata today takes that unlikely scenario one step closer to reality.
Update - June 3, 2016: I guess it wasn't meant to be. The new name of Monte Carlo is Park MGM.
Thursday, May 05, 2016
MGM Wynn and Caesars Talk Results
It was a bonanza of Las Vegas casino company earnings results today. MGM, Wynn, and Caesars all reported their first quarter 2016 results and held earnings conference calls.
MGM Resorts International focused on the Profit Growth Plan (PGP) during their conference call. PGP is the company's plan to increase profits by correcting inefficiencies in the operation. Examples would be consolidating linens and toiletries across all of the company's properties instead of using 14 different types. PGP is also the program responsible for MGM's upcoming parking garage fees. There wasn't much Las Vegas development news this time, but CEO Jim Murren further hinted at the upcoming re-branding of the Monte Carlo. He mentioned that the new Monte Carlo theater would host "A+ residency acts."
Steve Wynn spent much of the Wynn Resorts earnings call talking about the proposed Wynn Paradise Park development. Wynn mentioned that the lagoon coastline was already being expanded by 600 feet, and that zip-lines would be an available attraction. Wynn Paradise Park will have a 1000 room hotel with balcony rooms facing the lagoon and fireworks show. Steve Wynn thinks these balcony rooms will be the most sought-after in all of Las Vegas.
Caesars Entertainment held their earnings conference call at the same time as Wynn's. I guess when you're going through a bankruptcy you want as little attention as possible - and it worked since only one analyst asked a question in the 30 minute call. Operationally, Caesars highlighted strong trends in occupancy and ADR due in part to room renovations. Caesars also talked about their new self service check-in kiosks. Entertainment and dining offerings were also seen as a positive, with In-N-Out Burger coming to the Linq Promenade being the most exciting.
MGM Resorts International focused on the Profit Growth Plan (PGP) during their conference call. PGP is the company's plan to increase profits by correcting inefficiencies in the operation. Examples would be consolidating linens and toiletries across all of the company's properties instead of using 14 different types. PGP is also the program responsible for MGM's upcoming parking garage fees. There wasn't much Las Vegas development news this time, but CEO Jim Murren further hinted at the upcoming re-branding of the Monte Carlo. He mentioned that the new Monte Carlo theater would host "A+ residency acts."
Steve Wynn spent much of the Wynn Resorts earnings call talking about the proposed Wynn Paradise Park development. Wynn mentioned that the lagoon coastline was already being expanded by 600 feet, and that zip-lines would be an available attraction. Wynn Paradise Park will have a 1000 room hotel with balcony rooms facing the lagoon and fireworks show. Steve Wynn thinks these balcony rooms will be the most sought-after in all of Las Vegas.
Caesars Entertainment held their earnings conference call at the same time as Wynn's. I guess when you're going through a bankruptcy you want as little attention as possible - and it worked since only one analyst asked a question in the 30 minute call. Operationally, Caesars highlighted strong trends in occupancy and ADR due in part to room renovations. Caesars also talked about their new self service check-in kiosks. Entertainment and dining offerings were also seen as a positive, with In-N-Out Burger coming to the Linq Promenade being the most exciting.
Thursday, February 18, 2016
MGM Talks About Upcoming Projects
MGM Resorts International reported earnings earlier today, along with hosting an earnings conference call.
Usually MGM reveals some breaking news during these conference calls, but not so much today. Instead the focus was on topics already known to the public, including:
- The upcoming opening of the new T-Mobile Arena and The Park.
- MGM Growth Properties, the company's upcoming REIT conversion.
- The progress of new properties at MGM Cotai and MGM National Harbor.
Also discussed was MGM's infamous Profit Growth Plan. This initiative designed to cut costs and raise prices resulted in MGM's decision to charge for parking. The Profit Growth Plan is hated by in-the-know Vegas customers, and judging by MGM's stock price (down 8.32% today) the plan isn't rewarding shareholders either (yet).
Usually MGM reveals some breaking news during these conference calls, but not so much today. Instead the focus was on topics already known to the public, including:
- The upcoming opening of the new T-Mobile Arena and The Park.
- MGM Growth Properties, the company's upcoming REIT conversion.
- The progress of new properties at MGM Cotai and MGM National Harbor.
Also discussed was MGM's infamous Profit Growth Plan. This initiative designed to cut costs and raise prices resulted in MGM's decision to charge for parking. The Profit Growth Plan is hated by in-the-know Vegas customers, and judging by MGM's stock price (down 8.32% today) the plan isn't rewarding shareholders either (yet).
Friday, January 15, 2016
MGM Parking Garage and Valet Fees Introduced
In a story first reported by Vegas Tripping back in October, MGM Resorts International today officially announced they will be charging "modest" parking fees at most of their Las Vegas properties.
The MGM Resorts press release announcing the fee is pretty vague, largely because the plans probably aren't finalized yet. It states "An overnight guest utilizing a self-park facility will pay $10 or less."
If I stay 5 nights does that mean I pay $10 or $50?
Free valet service will be going away as well, a move that pretty much had to happen to avoid abuse now that self parking isn't going to be free.
From what I can gather hotel guests will not be exempt from the parking fees, which is absolutely ludicrous considering they are already paying a resort fee that can top $35 a night.
As part of the new parking initiatives MGM will also be building an additional garage on the Excalibur property which will serve the new T-Mobile Arena. An arena parking garage has been called for by locals since day one, but I'm guessing they didn't know it would come with extra parking fees.
Las Vegas locals might actually be the biggest loser in all of this. According to the press release, "Las Vegas locals will be given a grace period for free parking after the program starts and can maintain their free-parking status by enrolling and earning privileges through M life."
Yep, pretty much a slap in the face to locals. Come sign up for our loyalty program and gamble and we might throw you a bone with free parking. Yuck.
The question now - will other hotels copy MGM's lead and start charging for parking, or will they see it as an opportunity to steal some of MGM's customer base by keeping parking free forever? I think it will be the latter.
The MGM Resorts press release announcing the fee is pretty vague, largely because the plans probably aren't finalized yet. It states "An overnight guest utilizing a self-park facility will pay $10 or less."
If I stay 5 nights does that mean I pay $10 or $50?
Free valet service will be going away as well, a move that pretty much had to happen to avoid abuse now that self parking isn't going to be free.
From what I can gather hotel guests will not be exempt from the parking fees, which is absolutely ludicrous considering they are already paying a resort fee that can top $35 a night.
As part of the new parking initiatives MGM will also be building an additional garage on the Excalibur property which will serve the new T-Mobile Arena. An arena parking garage has been called for by locals since day one, but I'm guessing they didn't know it would come with extra parking fees.
Las Vegas locals might actually be the biggest loser in all of this. According to the press release, "Las Vegas locals will be given a grace period for free parking after the program starts and can maintain their free-parking status by enrolling and earning privileges through M life."
Yep, pretty much a slap in the face to locals. Come sign up for our loyalty program and gamble and we might throw you a bone with free parking. Yuck.
The question now - will other hotels copy MGM's lead and start charging for parking, or will they see it as an opportunity to steal some of MGM's customer base by keeping parking free forever? I think it will be the latter.
Tuesday, December 01, 2015
November 2015 Las Vegas Stock Recap
With the calendar now showing December 2015, let's take a look back and see how Las Vegas stocks did in the month of November.
After a blazing hot October for Las Vegas stocks, they came back down to earth a little bit in November.
Caesars Entertainment was the only stock finishing up in November, inching up a little over 5% after soaring over 36% in October.
MGM Resorts International and Boyd Gaming were relatively flat in October, both declining slightly.
Wynn Resorts and Las Vegas Sands both were both down a little over 10% in November after both had a strong October. Some issues in Macau continue to weigh on these two operators.
Penn National was down almost 11% in November, after having the weakest performance of all the Las Vegas stocks in October. I'm guessing their master lease accounting issues could have hurt their stock price recently.
After a blazing hot October for Las Vegas stocks, they came back down to earth a little bit in November.
Caesars Entertainment was the only stock finishing up in November, inching up a little over 5% after soaring over 36% in October.
MGM Resorts International and Boyd Gaming were relatively flat in October, both declining slightly.
Wynn Resorts and Las Vegas Sands both were both down a little over 10% in November after both had a strong October. Some issues in Macau continue to weigh on these two operators.
Penn National was down almost 11% in November, after having the weakest performance of all the Las Vegas stocks in October. I'm guessing their master lease accounting issues could have hurt their stock price recently.
| Company | Symbol | Start | End | Change |
| Caesars | CZR | 8.05 | 8.47 | +5.22% |
| MGM | MGM | 23.19 | 22.74 | -1.94% |
| Boyd | BYD | 19.99 | 19.59 | -2% |
| Wynn | WYNN | 69.95 | 62.77 | -10.26% |
| Penn | PENN | 17.86 | 15.95 | -10.69% |
| Sands | LVS | 49.51 | 44.06 | -11% |
Wednesday, November 18, 2015
Jim Murren on Ralston Live November 2015
MGM Resorts International CEO Jim Murren was on Ralston Live on Monday. He talked about the company's REIT conversion, how he had offers to sell the Mirage, Macau, and more.
Murren wasn't asked about the controversial rumor that MGM Resorts will soon be charging for garage parking in Las Vegas.
Murren wasn't asked about the controversial rumor that MGM Resorts will soon be charging for garage parking in Las Vegas.
Wednesday, November 11, 2015
Fontainebleau For Sale - Who Will Buy?
The Wall Street Journal reported today that Carl Icahn is looking to sell the Fontainebleau. The property will be listed by CBRE for $650 million.
I immediately starting thinking about who might be a candidate to buy and finish the stalled Fontainebleau project. I'm going to spend the rest of this blog post speculating about which companies might be in the mix.
MGM Resorts International and Caesars Entertainment are the two largest Las Vegas hotel/casino companies but neither of them are really looking to expand in Vegas at the moment. Plus MGM will be completing a REIT conversion soon, and Caesars is going through a partial bankruptcy. I don't see either of these giants buying Fontainebleau.
Wynn Resorts boss Steve Wynn has long said he doesn't want to build in Las Vegas again. His frustration with the Macau government and endless headaches getting his Boston project off the ground might have him singing a different tune though. The rub: Wynn likes to build from scratch and the Fontainebleau structure might not be a blank enough slate for architect DeRuyter Butler and designer Roger Thomas to work their magic.
Like Wynn, Las Vegas Sands and Sheldon Adelson have shown a lack of interest in building anything new in Vegas. I actually think the Fontainebleau would be a great fit though. LVS has deep pockets so finishing the resort wouldn't be a problem, and the location near the planned convention center expansion would fit right in with their convention heavy business model. The best part: They could call the property Sands Hotel and Casino resurrecting an iconic Las Vegas brand.
Speaking of iconic properties: Boyd Gaming has been looking to get back on the Strip ever since they demolished The Stardust and failed to replace it with Echelon Place, later selling the property. While I would be in favor of Boyd buying Fontainebleau and renaming it The Stardust (or Borgata Las Vegas perhaps?) it seems unlikely they would undertake such a large project so shortly after abandoning Echelon.
Penn National was seriously considering purchasing Fontainebleau before ultimately losing out to Carl Icahn. Since then they have entered the Las Vegas market with purchases of M Resort and later Tropicana. If Penn was unwilling to spend $150 million to buy Fontainebleau in 2010 I'm guessing they don't want to spend $650 million in 2015.
Treasure Island owner Phil Ruffin was in the news earlier this week as it was reported he made a recent $1.3 billion failed bid to buy The Mirage. If Ruffin has that much cash to spend could he possibly want to buy the Fontainebleau? It seems like a real possibility to me.
Other regional operators like Eldorado Resorts, Golden Entertainment, Full House Resorts, and Pinnacle Entertainment are likely eager to get into the Las Vegas market but probably don't have the money to make a deal like Fontainebleau happen. Could one of these companies partner up with a rich benefactor like Ruffin to get it done?
Lastly and perhaps most likely to buy Fontainebleau are private equity real estate companies. Cosmopolitan parent company Blackstone might be a possibility if they are looking to expand their casino holdings. Once rumored Mirage buyer Starwood Capital might also be looking to buy.
I immediately starting thinking about who might be a candidate to buy and finish the stalled Fontainebleau project. I'm going to spend the rest of this blog post speculating about which companies might be in the mix.
MGM Resorts International and Caesars Entertainment are the two largest Las Vegas hotel/casino companies but neither of them are really looking to expand in Vegas at the moment. Plus MGM will be completing a REIT conversion soon, and Caesars is going through a partial bankruptcy. I don't see either of these giants buying Fontainebleau.
Wynn Resorts boss Steve Wynn has long said he doesn't want to build in Las Vegas again. His frustration with the Macau government and endless headaches getting his Boston project off the ground might have him singing a different tune though. The rub: Wynn likes to build from scratch and the Fontainebleau structure might not be a blank enough slate for architect DeRuyter Butler and designer Roger Thomas to work their magic.
Like Wynn, Las Vegas Sands and Sheldon Adelson have shown a lack of interest in building anything new in Vegas. I actually think the Fontainebleau would be a great fit though. LVS has deep pockets so finishing the resort wouldn't be a problem, and the location near the planned convention center expansion would fit right in with their convention heavy business model. The best part: They could call the property Sands Hotel and Casino resurrecting an iconic Las Vegas brand.
Speaking of iconic properties: Boyd Gaming has been looking to get back on the Strip ever since they demolished The Stardust and failed to replace it with Echelon Place, later selling the property. While I would be in favor of Boyd buying Fontainebleau and renaming it The Stardust (or Borgata Las Vegas perhaps?) it seems unlikely they would undertake such a large project so shortly after abandoning Echelon.
Penn National was seriously considering purchasing Fontainebleau before ultimately losing out to Carl Icahn. Since then they have entered the Las Vegas market with purchases of M Resort and later Tropicana. If Penn was unwilling to spend $150 million to buy Fontainebleau in 2010 I'm guessing they don't want to spend $650 million in 2015.
Treasure Island owner Phil Ruffin was in the news earlier this week as it was reported he made a recent $1.3 billion failed bid to buy The Mirage. If Ruffin has that much cash to spend could he possibly want to buy the Fontainebleau? It seems like a real possibility to me.
Other regional operators like Eldorado Resorts, Golden Entertainment, Full House Resorts, and Pinnacle Entertainment are likely eager to get into the Las Vegas market but probably don't have the money to make a deal like Fontainebleau happen. Could one of these companies partner up with a rich benefactor like Ruffin to get it done?
Lastly and perhaps most likely to buy Fontainebleau are private equity real estate companies. Cosmopolitan parent company Blackstone might be a possibility if they are looking to expand their casino holdings. Once rumored Mirage buyer Starwood Capital might also be looking to buy.
Sunday, November 01, 2015
October 2015 Las Vegas Stock Recap
With the calendar now showing November 2015, let's take a look back and see how Las Vegas stocks did in the month of October.
October turned out to be an amazing month for Las Vegas stock returns with every stock I track finishing green, and 5 out of the 6 finishing up by more than 20%.
Caesars Entertainment has been on a wild bankruptcy fueled roller coaster ride. After soaring an incredible 83.3% in August they came crashing back down to earth in September falling 38.32% only to turn it around again in October jumping up 36.67%.
Wynn Resorts and Las Vegas Sands both were up big in October after declining significantly in September. While Steve Wynn was angry at the Macau government during Wynn's earnings call, Sheldon Aldelson was nothing but respectful.
MGM Resorts International had a 25% gain in October highlighted by the news that they are creating a REIT called MGM Growth Properties.
Boyd Gaming rode the downtown Las Vegas success wave with their stock increasing almost 22% in October.
Penn National was "only" up 6.4% in October. I'm guessing their limited exposure to Las Vegas compared to the other stocks kept them form having the same explosive October results.
October turned out to be an amazing month for Las Vegas stock returns with every stock I track finishing green, and 5 out of the 6 finishing up by more than 20%.
Caesars Entertainment has been on a wild bankruptcy fueled roller coaster ride. After soaring an incredible 83.3% in August they came crashing back down to earth in September falling 38.32% only to turn it around again in October jumping up 36.67%.
Wynn Resorts and Las Vegas Sands both were up big in October after declining significantly in September. While Steve Wynn was angry at the Macau government during Wynn's earnings call, Sheldon Aldelson was nothing but respectful.
MGM Resorts International had a 25% gain in October highlighted by the news that they are creating a REIT called MGM Growth Properties.
Boyd Gaming rode the downtown Las Vegas success wave with their stock increasing almost 22% in October.
Penn National was "only" up 6.4% in October. I'm guessing their limited exposure to Las Vegas compared to the other stocks kept them form having the same explosive October results.
| Company | Symbol | Start | End | Change |
| Caesars | CZR | 5.89 | 8.05 | +36.67% |
| Wynn | WYNN | 53.12 | 69.95 | +31.68% |
| Sands | LVS | 37.95 | 49.51 | +30.46% |
| MGM | MGM | 18.45 | 23.19 | +25.69% |
| Boyd | BYD | 16.30 | 19.99 | +21.96% |
| Penn | PENN | 16.78 | 17.86 | +6.44% |
Thursday, October 29, 2015
MGM Growth Properties REIT Announced
MGM Resorts International reported third quarter 2015 results earlier today. While the numbers were good, especially in Las Vegas, the big news was MGM's announcement that they are creating a REIT.
MGM Growth Properties (MGP) will consist of seven Las Vegas properties (Mandalay Bay, The Mirage, Monte Carlo, New York-New York, Luxor, Excalibur, and The Park) along with three regional properties (MGM Grand Detroit, Beau Rivage in Biloxi, and Gold Strike Tunica).
Notably excluded from the REIT are Bellagio, MGM Grand, and Circus Circus along with MGM's joint ventures including CityCenter, MGM China, Borgata, and the new Las Vegas Arena.
The parent company MGM Resorts International will own approximately 70% of the REIT. This is a big difference from the Penn National / Gaming and Leisure Properties REIT conversion from a few years ago which resulted in a complete and total split of those two companies.
Keeping 70% of the REIT will give MGM more control, but will also limit the potential sale price of the planned MGP IPO which will supposedly take place early in 2016 (that timetable seems ambitious).
Further tampering the REIT's potential is the $4 billion of debt which will be piled on to MGP's books. There are definitely questions about whether the ten properties included in the transaction can generate enough income to support that kind of debt.
MGM Growth Properties (MGP) will consist of seven Las Vegas properties (Mandalay Bay, The Mirage, Monte Carlo, New York-New York, Luxor, Excalibur, and The Park) along with three regional properties (MGM Grand Detroit, Beau Rivage in Biloxi, and Gold Strike Tunica).
Notably excluded from the REIT are Bellagio, MGM Grand, and Circus Circus along with MGM's joint ventures including CityCenter, MGM China, Borgata, and the new Las Vegas Arena.
The parent company MGM Resorts International will own approximately 70% of the REIT. This is a big difference from the Penn National / Gaming and Leisure Properties REIT conversion from a few years ago which resulted in a complete and total split of those two companies.
Keeping 70% of the REIT will give MGM more control, but will also limit the potential sale price of the planned MGP IPO which will supposedly take place early in 2016 (that timetable seems ambitious).
Further tampering the REIT's potential is the $4 billion of debt which will be piled on to MGP's books. There are definitely questions about whether the ten properties included in the transaction can generate enough income to support that kind of debt.
Thursday, October 22, 2015
MGM set to Charge Parking Garage Fees?
MGM Resorts International will soon charge for parking at their Las Vegas self park garages, according to a report from Vegas Tripping.
Casino companies are willing to nickel and dime their customers endlessly in a quest for higher revenues. Over the years gaming odds on the Strip have declined consistently, and more recently resort fees have become commonplace at almost every Las Vegas hotel.
It's no surprise the bean counters would eventually try to get their hands on one of the remaining free perks left in Vegas.
Gamblers will be upset, but MGM Resorts CEO Jim Murren has recently talked about focusing more on non-gaming clientele saying, "Many of them have no interest in gambling and that's perfectly fine with me."
There might be hope though. The Nevada Gaming Control Board has strict rules regarding access to gaming and according to their guidelines:
"...all gaming establishments in Nevada must remain open to the general public and the access of the general public to gaming activities must not be restricted in any manner..."
I'm not sure if charging for parking would count as restricting access, but hey it's something. Could Gaming Control block MGM from charging for parking?
Casino companies are willing to nickel and dime their customers endlessly in a quest for higher revenues. Over the years gaming odds on the Strip have declined consistently, and more recently resort fees have become commonplace at almost every Las Vegas hotel.
It's no surprise the bean counters would eventually try to get their hands on one of the remaining free perks left in Vegas.
Gamblers will be upset, but MGM Resorts CEO Jim Murren has recently talked about focusing more on non-gaming clientele saying, "Many of them have no interest in gambling and that's perfectly fine with me."
There might be hope though. The Nevada Gaming Control Board has strict rules regarding access to gaming and according to their guidelines:
"...all gaming establishments in Nevada must remain open to the general public and the access of the general public to gaming activities must not be restricted in any manner..."
I'm not sure if charging for parking would count as restricting access, but hey it's something. Could Gaming Control block MGM from charging for parking?
Thursday, October 01, 2015
September 2015 Las Vegas Stock Recap
With the calendar now showing October 2015, let's take a look back and see how Las Vegas stocks did in the month of September.
Boyd Gaming was the only stock I track that was up in September. It's performance was likely buoyed by strong trends in downtown and the Las Vegas locals market.
Penn National was brought down by the rest of the sector, but since they don't have any international exposure they weren't down as much as the others.
MGM Resorts International was down almost ten percent. Their exciting upcoming projects including the Las Vegas Arena and The Park were overshadowed by their exposure to Macau, which was weak.
Las Vegas Sands and Wynn Resorts both declined significantly again in September. Along with general softness in Macau, reports of troubles in the high end junket market has sent these two stocks into a tailspin.
Caesars Entertainment was the big winner in August soaring an incredible 83.3%. They came crashing back down to earth in September though falling 38.32%. The Caesars bankruptcy proceedings are very uncertain at this point, and it looks like investors are becoming less certain of a turnaround.
Boyd Gaming was the only stock I track that was up in September. It's performance was likely buoyed by strong trends in downtown and the Las Vegas locals market.
Penn National was brought down by the rest of the sector, but since they don't have any international exposure they weren't down as much as the others.
MGM Resorts International was down almost ten percent. Their exciting upcoming projects including the Las Vegas Arena and The Park were overshadowed by their exposure to Macau, which was weak.
Las Vegas Sands and Wynn Resorts both declined significantly again in September. Along with general softness in Macau, reports of troubles in the high end junket market has sent these two stocks into a tailspin.
Caesars Entertainment was the big winner in August soaring an incredible 83.3%. They came crashing back down to earth in September though falling 38.32%. The Caesars bankruptcy proceedings are very uncertain at this point, and it looks like investors are becoming less certain of a turnaround.
| Company | Symbol | Start | End | Change |
| Boyd | BYD | 16.10 | 16.30 | +1.24% |
| Penn | PENN | 18.16 | 16.78 | -7.60% |
| MGM | MGM | 20.43 | 18.45 | -9.69% |
| Sands | LVS | 46.23 | 37.95 | -17.91% |
| Wynn | WYNN | 75.05 | 53.12 | -29.22% |
| Caesars | CZR | 9.55 | 5.89 | -38.32% |
Thursday, September 03, 2015
Crystals Expansion likely at Harmon Site
Jim Murren - speaking on the most recent MGM Resorts International earnings conference call gave some thoughts about what the never-opened Harmon Hotel land could become:
"For those of you who are out here, or are going visit soon you'll note, which is happy news for us - that Bobby Baldwin has finished deconstructing the nightmare that was The Harmon.
That allows us to spend really constructive time to develop ideas of what would maximize that two-plus acres parcel right on the corner of the Strip. And clearly, though we're not ready to explain all of the ideas we have, you'd have to believe that an expansion of Crystals is the overarching use of that property, and there could be others.
Crystals itself is an extraordinarily valuable asset, we've discussed it on prior calls, and don't think that we've lost sight of that. We believe it not only is more valuable today than it was even last quarter, but we believe with a growth plan it would be more valuable still going forward."
"For those of you who are out here, or are going visit soon you'll note, which is happy news for us - that Bobby Baldwin has finished deconstructing the nightmare that was The Harmon.
That allows us to spend really constructive time to develop ideas of what would maximize that two-plus acres parcel right on the corner of the Strip. And clearly, though we're not ready to explain all of the ideas we have, you'd have to believe that an expansion of Crystals is the overarching use of that property, and there could be others.
Crystals itself is an extraordinarily valuable asset, we've discussed it on prior calls, and don't think that we've lost sight of that. We believe it not only is more valuable today than it was even last quarter, but we believe with a growth plan it would be more valuable still going forward."
Tuesday, September 01, 2015
August 2015 Las Vegas Stock Recap
With the calendar now showing September 2015, let's take a look back and see how Las Vegas stocks did in the month of August.
Caesars Entertainment was the big winner in August soaring an incredible 83.3%. They had a strong earnings report combined with some positive bankruptcy news. Caesars stock is highly speculative given their possible bankruptcy, but those willing to gamble reaped the rewards in August.
MGM Resorts International also reported solid earnings, and their stock was up on the news that they are strongly considering a REIT conversion.
Penn National officially became the owners of the Tropicana, but their stock was down slightly in August. Fellow regional player Boyd Gaming was also down.
Las Vegas Sands and Wynn Resorts both declined significantly in August as they were affected by the Chinese stock market.
Caesars Entertainment was the big winner in August soaring an incredible 83.3%. They had a strong earnings report combined with some positive bankruptcy news. Caesars stock is highly speculative given their possible bankruptcy, but those willing to gamble reaped the rewards in August.
MGM Resorts International also reported solid earnings, and their stock was up on the news that they are strongly considering a REIT conversion.
Penn National officially became the owners of the Tropicana, but their stock was down slightly in August. Fellow regional player Boyd Gaming was also down.
Las Vegas Sands and Wynn Resorts both declined significantly in August as they were affected by the Chinese stock market.
| Company | Symbol | Start | End | Change |
| Caesars | CZR | 5.21 | 9.55 | +83.30% |
| MGM | MGM | 19.62 | 20.43 | +4.13% |
| Penn | PENN | 19.08 | 18.16 | -4.82% |
| Boyd | BYD | 17.09 | 16.10 | -5.79% |
| Sands | LVS | 56.04 | 46.23 | -17.51% |
| Wynn | WYNN | 103.23 | 75.05 | -27.30% |
Thursday, August 27, 2015
Jim Murren News3LV Interview Highlights
MGM Resorts International chief executive officer Jim Murren did a TV interview with Jeff Gillan of KSNV News3LV the other day.
Some highlights:
Despite lowered revenues over the past year that he called growing pains, Murren is still bullish on Macau citing infrastructure improvements: a bridge from Hong Kong, development of the neighboring Hengqin island, a high speed rail network, expansion of the airport and light rail. Macau makes up about 20% of the company's revenue.
Talking about Las Vegas Murren highlighted a growing convention business and increased flight activity at McCarran International Airport. He talked about shifting demographics noting that the average age of the Las Vegas tourist is lowering. People are coming to Las Vegas for shows, entertainment, conventions, music festivals, sporting events - "Many of them have no interest in gambling and that's perfectly fine with me."
Murren still thinks Las Vegas will get a hockey team and he wants to attract locals with the new arena and park. Speaking about complaints that there will be a lack of parking at the arena, Murren said, "What's wrong with walking? Get off your butt and walk a little bit. We have garages up and down the Strip, which by the way are free."
And casinos, restaurants and bars attached to those garages!
Murren confirmed that he's not selling The Mirage.
Talking about a new name for Monte Carlo Murren said there will be an announcement by the end of the year. They're close to selecting a name that will attract millennials, people who are sports and entertainment oriented, and people who are spontaneous.
Related: Jim Murren Nevada Public Radio interview highlights from back in June.
Some highlights:
Despite lowered revenues over the past year that he called growing pains, Murren is still bullish on Macau citing infrastructure improvements: a bridge from Hong Kong, development of the neighboring Hengqin island, a high speed rail network, expansion of the airport and light rail. Macau makes up about 20% of the company's revenue.
Talking about Las Vegas Murren highlighted a growing convention business and increased flight activity at McCarran International Airport. He talked about shifting demographics noting that the average age of the Las Vegas tourist is lowering. People are coming to Las Vegas for shows, entertainment, conventions, music festivals, sporting events - "Many of them have no interest in gambling and that's perfectly fine with me."
Murren still thinks Las Vegas will get a hockey team and he wants to attract locals with the new arena and park. Speaking about complaints that there will be a lack of parking at the arena, Murren said, "What's wrong with walking? Get off your butt and walk a little bit. We have garages up and down the Strip, which by the way are free."
And casinos, restaurants and bars attached to those garages!
Murren confirmed that he's not selling The Mirage.
Talking about a new name for Monte Carlo Murren said there will be an announcement by the end of the year. They're close to selecting a name that will attract millennials, people who are sports and entertainment oriented, and people who are spontaneous.
Related: Jim Murren Nevada Public Radio interview highlights from back in June.
Monday, August 24, 2015
Las Vegas Stocks Fall in Global Selloff
In what has been dubbed on Twitter as Black Monday - stocks were down in a big way today as China fears caused a global selloff. The Dow, NASDAQ, and S&P 500 all fell by more than 3.5% on the day.
The big Las Vegas stocks were hard hit as they rely on the China economy in their Macau operations. Wynn Resorts fell almost 6.5%, MGM Resorts International was down 5% and Las Vegas Sands was off by 4%.
Even the regional gaming companies without China operations were affected by the selloff. Boyd Gaming was down by 3.3% and Penn National fell by just over 2.5%.
Caesars Entertainment bucked the trend however as they were up almost 12% on favorable bankruptcy news and good Atlantic City numbers. The fact that Caesars doesn't have any Macau operations also probably helped on this particular day.
The big Las Vegas stocks were hard hit as they rely on the China economy in their Macau operations. Wynn Resorts fell almost 6.5%, MGM Resorts International was down 5% and Las Vegas Sands was off by 4%.
Even the regional gaming companies without China operations were affected by the selloff. Boyd Gaming was down by 3.3% and Penn National fell by just over 2.5%.
Caesars Entertainment bucked the trend however as they were up almost 12% on favorable bankruptcy news and good Atlantic City numbers. The fact that Caesars doesn't have any Macau operations also probably helped on this particular day.
| Company | Symbol | Open | Close | Change |
| Caesars | CZR | 8.02 | 8.98 | +11.97% |
| Penn | PENN | 17.69 | 17.20 | -2.55% |
| Boyd | BYD | 16.03 | 15.50 | -3.31% |
| Sands | LVS | 47.99 | 46.05 | -4.04% |
| MGM | MGM | 20.59 | 19.54 | -5.10% |
| Wynn | WYNN | 81.77 | 76.48 | -6.47%% |
Monday, August 10, 2015
Monte Carlo Name Change
Monte Carlo is getting a new name. This has been hinted at and speculated for a few months now, but MGM Resorts International CEO Jim Murren has all but confirmed it. The name change will likely take place in 2016 around the same time the new Monte Carlo theater is finished.
Murren was quoted today in a Vegas Inc article saying, "a name change is almost a certainty." Apparently in focus group testing the Monte Carlo brand name did not resonate with customers as well as other MGM properties did. This isn't really surprising, as Monte Carlo is often overlooked despite its prime Strip location.
Here's the part of the blog post where I wildly guess some possible new names for Monte Carlo:
The Park - Naming the hotel and casino after the attached promenade would be taking a page directly out of the Caesars Entertainment playbook when they ultimately renamed Imperial Palace as The Linq. While this would make logical sense - it isn't the most exciting option.
Central Park - This name would incorporate a few different things. "Central" would highlight the hotel's relative location on the Strip and close proximity to City Center. "Park" is the name of the outdoor promenade. "Central Park" is obviously a New York reference which would essentially turn New York New York, The Park development, and the Central Park hotel into one distinct area.
Park Avenue - Another name with a New York twist. I think the road going through The Park development will be named Park Avenue, so the hotel having that same name might be a possibility. The strong New York tie-in would make this a de facto sister property to New York New York, which would make perfect sense since they will be sharing The Park development.
Borgata Las Vegas - This one is total speculation and is the longest of the long-shots, but in my mind it would be a good move. If you're not familiar Borgata is the nicest hotel casino in Atlantic City. It is owned as a 50/50 joint venture between MGM Resorts and Boyd Gaming. MGM could trade their stake in the AC property to Boyd in exchange for exclusive Borgata Las Vegas naming rights. Again, this is extremely unlikely but if MGM wanted to make a big splash with the re-name I can't think of another brand that would bring more excitement or credibility than Borgata.
Update - June 3, 2016: Park MGM is the new Monte Carlo name.
Murren was quoted today in a Vegas Inc article saying, "a name change is almost a certainty." Apparently in focus group testing the Monte Carlo brand name did not resonate with customers as well as other MGM properties did. This isn't really surprising, as Monte Carlo is often overlooked despite its prime Strip location.
Here's the part of the blog post where I wildly guess some possible new names for Monte Carlo:
The Park - Naming the hotel and casino after the attached promenade would be taking a page directly out of the Caesars Entertainment playbook when they ultimately renamed Imperial Palace as The Linq. While this would make logical sense - it isn't the most exciting option.
Central Park - This name would incorporate a few different things. "Central" would highlight the hotel's relative location on the Strip and close proximity to City Center. "Park" is the name of the outdoor promenade. "Central Park" is obviously a New York reference which would essentially turn New York New York, The Park development, and the Central Park hotel into one distinct area.
Park Avenue - Another name with a New York twist. I think the road going through The Park development will be named Park Avenue, so the hotel having that same name might be a possibility. The strong New York tie-in would make this a de facto sister property to New York New York, which would make perfect sense since they will be sharing The Park development.
Borgata Las Vegas - This one is total speculation and is the longest of the long-shots, but in my mind it would be a good move. If you're not familiar Borgata is the nicest hotel casino in Atlantic City. It is owned as a 50/50 joint venture between MGM Resorts and Boyd Gaming. MGM could trade their stake in the AC property to Boyd in exchange for exclusive Borgata Las Vegas naming rights. Again, this is extremely unlikely but if MGM wanted to make a big splash with the re-name I can't think of another brand that would bring more excitement or credibility than Borgata.
Update - June 3, 2016: Park MGM is the new Monte Carlo name.
Tuesday, August 04, 2015
MGM Weighs Real Estate Options
MGM Resorts International reported second quarter 2015 earnings results earlier today. The theme this earnings season has been stronger Las Vegas trends offset by a softer Macau. Revenue at MGM's wholly owned domestic resorts was 1.7 billion, an increase of 4% compared to the prior year quarter. Average daily room rate and revenue per available room both increased more than 6%. MGM China revenue decreased by 33%.
During the company's earnings conference all Jim Murren hinted at the possibility of a REIT conversion. He said the company has been weighing all options when it comes to real estate and a definitive decision would be announced by the end of the year.
As for the rumors that The Mirage was being sold - Murren said "The Mirage is not on the market." Some people are seeing this as a sign that The Mirage is definitely not being sold. Others think that Murren chose his words carefully, and the property isn't on the market because it has already been sold. With MGM looking at all real estate possibilities I wouldn't be surprised at either outcome.
Murren also talked about how The Harmon is almost completely dismantled now, and MGM is trying to decide what to do with that two acre property. The leading candidate seems to be an expansion of The Shops at Crystals. I wouldn't be a huge fan of that plan, but Crystals seems to be doing quite well so it probably makes sense financially.
During the company's earnings conference all Jim Murren hinted at the possibility of a REIT conversion. He said the company has been weighing all options when it comes to real estate and a definitive decision would be announced by the end of the year.
As for the rumors that The Mirage was being sold - Murren said "The Mirage is not on the market." Some people are seeing this as a sign that The Mirage is definitely not being sold. Others think that Murren chose his words carefully, and the property isn't on the market because it has already been sold. With MGM looking at all real estate possibilities I wouldn't be surprised at either outcome.
Murren also talked about how The Harmon is almost completely dismantled now, and MGM is trying to decide what to do with that two acre property. The leading candidate seems to be an expansion of The Shops at Crystals. I wouldn't be a huge fan of that plan, but Crystals seems to be doing quite well so it probably makes sense financially.
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