{"id":138,"date":"2009-04-01T20:29:00","date_gmt":"2009-04-02T00:29:00","guid":{"rendered":"https:\/\/www.lasvegasadvisor.com\/blogs\/dmckee\/index.cfm\/2009\/4\/1\/The-Company-That-Ate-Itself"},"modified":"2009-04-01T20:29:00","modified_gmt":"2009-04-02T00:29:00","slug":"the-company-that-ate-itself","status":"publish","type":"post","link":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/the-company-that-ate-itself\/","title":{"rendered":"The Company That Ate Itself"},"content":{"rendered":"

Perhaps it was with dry irony that the Las Vegas Review-Journal<\/em>'s latest Station Casinos<\/strong> story's subhead read, "Company blames economy, poached customers." And by whom might those customers have been poached? By Station Casinos itself<\/a>! The company's imperial overreach has reduced it to gnawing on its own femur, as each new Station property cannibalizes business from somewhere else in the Fertitta empire.<\/p>\n

Bad as the 2008 financials were, 2009 is going to be that much worse once the encroachment of M Resort<\/strong> begins to be felt. Last year, Station's casino revenues fell by 11%<\/a> and ADRs were down comparably. A 14% slippage in cash flow from 2007 meant that a deal valued at a rose-colored 9.7X EBIDTA is now effectively over 11X cash flow. Even had the Fertitta Brothers<\/strong> not insisted upon carting home a half-billion dollars as part of the buyout, its valuation would still have been quite over-optimistic.<\/p>\n

(Even in a boom year, Station's proposal to dilute Aliante Station<\/strong>'s revenues with a nearby "Losee Station" would be inexplicable. Given the company's current financial performance, it's an idea quite a few fries short of a Happy Meal.)<\/p>\n

Elsewhere in the casinosphere<\/strong>, the closest thing to good news was Planet Hollywood<\/strong>'s disclosure that it shaved 40% off<\/a> of last year's losses, thanks to a nearly 8% revenue increase. More alarmingly, the Las Vegas Hilton<\/strong> — seemingly the one casino-hotel Colony Capital<\/strong> couldn't ruin — has swung from a profit to a loss.<\/p>\n

It's a business miracle!<\/strong> Losses at soon-to-be-cleft Herbst Gaming<\/strong> widened by 60%. Most of that was driven by a -33% downward spiral in slot-route revenues. By contrast, the ouster of sundry Herbsts in favor of CEO Ferenc Szony<\/strong> appears to have given the company's 15 casinos a boost because, as dowdy as some of those places are, their revenue actually grew 1% last year.<\/p>\n

For most companies that might be unremarkable; for Herbst it's a miracle. It also puts paid to the Herbsts' face-saving insinuation that, by keeping the slot routes and parting with the casinos, the family was hanging onto the real goodies. I can't even remember the last time I went into a Terrible's<\/strong> convenience store and saw somebody playing the slots.<\/p>\n

Humpty Dumpty had a great fall<\/strong>. The Nevada state budget is a two-legged stool, balanced upon gaming and sales taxes. That stool is getting wobblier by the day<\/a>. Unfortunately, if the Lege has any solutions, it's keeping them to itself.<\/p>\n","protected":false},"excerpt":{"rendered":"

Perhaps it was with dry irony that the Las Vegas Review-Journal's latest Station Casinos story's subhead read, "Company blames economy, poached customers." And by whom might those customers have been poached? By Station Casinos itself! The company's imperial overreach has … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[88,73,3,14,123,63,57,9],"tags":[],"_links":{"self":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts\/138"}],"collection":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/comments?post=138"}],"version-history":[{"count":0,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts\/138\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/media?parent=138"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/categories?post=138"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/tags?post=138"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}