Well, that was a waste of a good hour. Boyd Gaming teased its Thursday morning conference call with intimations that All (or at least Some) Would Be Revealed about its surprise bid for most of the assets of Station Casinos. Boyd execs made a few pro forma comments about the offer at the top of the show, for want of a better term. They then announced that they would be taking no questions about the Station bid, so don't you be asking any, sonny.
Later, they did relax to the extent of allowing that they assume that Station's management contract with the Thunder Valley tribal casino near Sacramento would be included (but implied that Station's management pact with a Michigan tribe would not). The reason that the general public is in some confusion about what Boyd would be paying $950 million for is: Boyd itself is uncertain. Company officials implied they weren't getting any cooperation from Station — or to the mythical entity that Boyd's president consistently refers to as "Stations [sic] Casinos." (You know … the archivals of Boyds Gamings and builders of Red's Rocks Resorts.) After he buys it, of course, he can call it whatever he wants.
One of the many questions begged by Boyd's non-presentation was what's going to happen to Echelon, now that the company proposes to cannibalize its remaining $2 billion in borrowing capacity (against $2.6 billion in debt) to finance the Station deal. That money had been earmarked for finishing Echelon. Seemingly intent on having his cake and eating it too, Boyd prexy Keith Smith said, "We have nothing to report on [Echelon]" but added that having a Strip presence remained a long-term goal. Translation: Don't hold your breath.
Smith also ducked some pointed Larry Klatzkin queries regarding performance expectations at Blue Chip, in Indiana. (He evaded a question about ADRs, too.) CFO COO Paul Chakmak, referring to the expanded riverboat complex as "the new Blue" (do I sense a marketing slogan there?), said that early results are promising if not definitive. He noted that a record 2008 and January '09 performance at Delta Downs in Louisiana "shows the value of our geographic diversity" and noted that Borgata was the only Atlantic City casino to post growing slot win in 2008. Boyd will be taking a variety of one-time charges, including on some of its North Las Vegas real estate, and will be drawing out the payment schedule on Dania Jai-alai, a would-be Florida casino venture that has gone into the freezer, due to a disappointing Sunshine State market.
"Our goal is not just to get by," Chakmak said, while allowing that the Las Vegas locals market "remains challenging." Downtown, he added, was a better scene, given that increased charter flights were offsetting any effect that might be felt from reduced commercial airline service to Hawaii. Why one would want to exponentially expand into a "challenging" Vegas market right now was yet another of those questions that didn't get to be asked.
Good news for bargain hunters in Atlantic City; Smith expects promotional allowances to "stay elevated" in 2009. He also said that, with only two weeks of service so far, it's much too early to prognosticate about the performance of the ACES train (a joint venture with Harrah's Entertainment). Boyd execs did talk up the savings achieved by infusing T.G.I. Fridays, Fuddruckers, Sbarro, etc. into their locals properties. If you were a Boyd restaurant employee whose eatery was displaced to make room for a fast-food franchise, you might not share that enthusiasm.
