“Lightweight” might be a apt term to describe the braintrust forming around the SLS/Sahara project. So would “miscast.” Reporting to casino novice and owner Sam Nazarian, its president will be J.P. Morgan investment banker Sam Bakhshandehpour. His main qualification for the job? Well, according to Howard Stutz, “[he] worked with Nazarian earlier this year to secure $300 million in financing for renovation of the Sahara into the SLS Las Vegas.” Good enough for me! Put that man in charge of a new, un-branded Strip casino!
Actually, it sounds like they should send Mr. Bakhshandehpour down the street to Caesars Entertainment, which could really use help scaring up capital these days. They could call it a swap since …
Caesars was also the last port of call for ex-vice president of corporate marketing Veronica Smiley. She’ll be CMO at SLS, news that will not bring any smiley faces to my Total Rewards-using friends, who have few kind words for how they are treated nowadays. It’s also a strange fit of exec to property: Nazarian gave away his Sahara database for a mess of Circus Circus pottage, so Smiley’s got nothing even remotely resembling Total Rewards from which to work. She’s at Ground Zero, trying to re-start from scratch, in hot pursuit of twentysomething customers. (Methinks the “custom-crafted experience” concept is going to be snurched by Nazarian and used as his central selling point.) If Marriott was a suitable partner for hipster-haven Cosmopolitan of Las Vegas, then Nazarian ought to be thinking more along the lines of …
Tropicana Las Vegas, a struggling hotel-casino that managed to grab a branch of the Doubletree arbor, at least temporarily arresting its fall. While this makes the Trop a sort of sub-affiliate of Hilton Worldwide, it’s potentially a huge boon, since it ties the Strip dowager into Hilton’s online and telephonic reservation systems. It’s probably never anything that Alex Yemenidjian envisioned originally but it does position the old-but-rejuvenated gal as a bargain-tier alternative to other Hilton-branded properties on the Strip. That’s the real story, I think. While other companies floundered under debt, Hilton has quietly slipped in and snapped up the former Westgate condos at Planet Hollywood, as well as a big chunk of Trump International, and now has baptized the Trop with its brand. Having borne none of Onex Corp.’s $145 million (or more) investment in reinventing the Trop, Hilton is now in a position to share in the return. It’s also well shot of its affiliation with the LVH, the latter having gone to rack and ruin under Colony Capital, and Goldman Sachs seemingly clueless to turn it around.
U.S. companies fear to tread in the casino thickets of the Philippines — and, given the lynch-mob treatment recently accorded Steve Wynn, they are wise to do so. Melco Crown Entertainment, however, is not so circumspect. It has formed an “indirect subsidiary,” MCE Leisure, to lease and operate a $1.2 billion Manila casino. While gaming revenues will be siphoned off by a joint-venture partner, PLAI, Melco Crown gets to keep the non-gaming profits and is on the hook for any regulatory costs. That’s a lot to ask of Lawrence Ho (left) and James Packer in return for $600 million in Melco money. At least they have covered their backsides to the extent of having total operational control through mid-2033. The transaction doesn’t scream “accretive to earnings!”, not to my ears anyway, but I’ll give the Melco lads the benefit of the doubt and presume that they have a bigger Philippine endgame in mind.
