We can't know for sure why Tim Poster and Tom Breitling sold the Golden Nugget a mere year after they bought the place. Their personal feelings and ambitions are their own and haven't been made public; even if they were, they'd probably be subject to so much spin that the truth would remain obscured.
However, it's been rumored, on the one hand, that Tim and Tom found themselves over their heads in the rough-and-tumble downtown Las Vegas casino business, especially since they went after high rollers, whose swings of fortune can whipsaw a casino to the max -- and, by some accounts, did. Reports we saw at the time suggested that the casino's most recent earnings were "mixed" and the property suffered from poor cash flow. In fact, after the sale was announced, the respected Las Vegas Review-Journal columnist Jane Ann Morrison reported that Tim and Tom lost $5.5 million in the first nine months of operation, "partly because by going after the higher rollers they were exposing themselves to more risk."
Jane Ann also quoted an observer as saying, "'In general, Tim shouldn't be in a regulated industry.’ Poster and Breitling both found it frustrating that they couldn't just do as they liked without worrying about rules and regulations. Their license was good for only four years, so they had to keep their noses clean. Gaming regulations blocked them from entering certain business deals."
On the other hand, Tim and Tom were certainly the glamour boys of the Las Vegas casino business for a while. They were A-list celebrities at the hippest parties. Their mugs were splashed all over advertisements as being synonymous with the ultimate cool in Las Vegas. And as the questioner points out, they were the stars of the reality TV show "The Casino," produced by Mark Burnett (of the "Survivor" series) and aired on the Fox Network. "The Casino's" huge production crew, including 18 cameras, followed Tim and Tom around for six weeks, starting on Jan. 23, 2004, the day they took over the Nugget. Nearly 300 hours of action were taped for 13 hour-long episodes.
Meanwhile, a contact of ours, who worked closely with Tim and Tom in the Golden Nugget marketing department, told us that selling the casino was a no-brainer for them. They bought both the Vegas and Laughlin Nuggets from MGM Mirage for $215 million, then sold them, a little more than a year later to the Landry Group, for $295 million ($140 million in cash and the assumption of $155 million in debt). Analysts initially estimated that Tim and Tom would cash out a $110 million to $150 million profit from the sale.
However, after the sale closed, Liz Benston of the Las Vegas Sun reported that the final cost to Landry's was "was closer to $345 million ... according to a recent quarterly financial statement that Landry's filed with the Securities and Exchange Commission. "The final price tag is about $130 million more than the $215 million, including debt, that Poster Financial Group paid to acquire the properties in January 2004. Tim Poster, Tom Breitling and three business partners received $163 million in cash in the deal. Their initial cash contribution was $50 million -- meaning they received a return of 226 percent on their less than two-year investment."
We believe that the brevity of their ownership of the Nugget probably points to a combination of the above factors. Tim and Tom didn't, ultimately, enjoy controlling casinos, they had a rip-roaring year-long run, and they sold at a nice profit when the right offer came along.
