{"id":4998,"date":"2010-11-02T11:10:06","date_gmt":"2010-11-02T19:10:06","guid":{"rendered":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/?p=4998"},"modified":"2021-01-05T07:02:19","modified_gmt":"2021-01-05T15:02:19","slug":"twilight-of-the-gods","status":"publish","type":"post","link":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/twilight-of-the-gods\/","title":{"rendered":"Twilight of the gods?"},"content":{"rendered":"

\"\"It’s been obvious since jump street that MGM Resorts International<\/strong> bit off more than it could chew when it upsized its ambitions for the old Boardwalk<\/strong> site into a civic citadel, a Valhalla on the Strip. Behind CEO Jim Murren<\/strong>‘s sanguine rhetoric about the advantages of refinancing $1.8 billion in CityCenter<\/strong> debt lies quite a different story<\/a>, according to documents obtained by the Wall Street Journal<\/em>. Nobody knows their way around CityCenter quite like Pulitzer Prize<\/strong>-winning reporter Alexandra Berzon<\/strong>, who has uncovered internal deliberations in which MGM and partner Dubai World<\/strong> mulled closing a pair of the metaresort’s hotels and shutting down Cirque du Soleil’<\/strong>s excruciating<\/a> Viva Elvis<\/em><\/a>. (Whoever thought that Criss Angel<\/strong>‘s notorious Believe<\/em><\/a> might outlive an Elvis Presley<\/strong>-themed Cirque show?) Interestingly, the Las Vegas Review-Journal<\/em>‘s Mike Weatherford<\/strong> has reported that MGM did not, in fact, “extend” The Lion King<\/em> but bought it out of the final 12 months of its Mandalay Bay<\/strong> contract.<\/p>\n

If the $1.8 billion in debt can’t be restructured, CityCenter “could be in default on the loan as early as mid-2011,” Berzon writes. For his part, Murren casts the drastic moves considered — and discarded — as spitballing, a part of the cost-cutting process. The fact that such dire measures were seriously considered, however, would tend to indicate a problem of unusual severity. In the case of MGM, another worry for Wall Street<\/strong> has been a lack of cash on hand — a sagging rampart that Murren has been busily shoring up through a spate of recent moves, including the early retirement of a debt owed by MGM Grand Paradise<\/strong> to its corporate parent.<\/p>\n

For an exercise of “new urbanism,”<\/strong> CityCenter has always come up short on the trappings of urban life. By mid-August, action was belatedly being taken to add\u00a0such rudimentary amenities as a grocery store. However, $1 million in cost savings in coming in ways that customers may not appreciate: less money spent on the Aria<\/strong> buffet and a huge reduction in dealers. For a casino as exceptionally dependent on table play as Aria, the last measure appears quixotic in the extreme. Unsold condos continue to be a cast-iron albatross around CityCenter’s neck and Mandarin Oriental<\/strong> has been very slow out of the gate. Murren tells Berzon that performance is improving and, hey, new resorts take time to gain traction. That’s a much different tune than he was singing one year ago, when CityCenter was going to be the “quantum leap” that ginned up Vegas visitation by 5% or more.<\/p>\n

(Incidentally, the WSJ<\/em> timeline following CityCenter’s November 2004 inception to its current struggles could also serve just about perfectly to trace the trajectory of the rise and fall of the Vegas bubble.)<\/p>\n


\n“Uncomfortable” silence<\/strong>. That’s what Las Vegas Sands<\/strong> CEO Sheldon Adelson<\/strong> is said to have maintained during his most recent investor call<\/a> when the subject of Macao was discussed. (Other accounts differ.) Allegations of wrongdoing flung at Adelson by sacked Sands China<\/strong> CEO Steve Jacobs<\/strong> may have something to do with Adelson’s alleged reticence. The difficulty of moving $4.1 billion Venetian Oriental<\/strong> forward amid contradictory Macanese government mandates might also be clouding Sheldon’s mood. He needn’t worry too much: Wall Street is forecasting a 19.5% ROI from Venetian Oriental in its first year.<\/p>\n

Wynncore Encore?<\/strong> Ever-resourceful Steve Wynn<\/strong> has designed his Cotai Strip™<\/strong> casino in such a way as to have 12 acres left over. Since the land is leased from the Macao government, he can’t flip it to sub-concessionaire Melco Crown Entertainment<\/strong> — so does he give it back or build Casino #4. I’d guess the latter, wouldn’t you?<\/p>\n

After all, casino revenue leapt 48-50% last month<\/a>, reaching $2.4 billion and sparking a rally in gaming stocks on the Hong Kong<\/strong> bourse. The record level of business was particularly good for MGM and partner Pansy Ho<\/strong>, who moved into fifth place, a few tenths of a percentage point ahead of Galaxy Entertainment<\/strong> (which has far more casino product). Melco Crown (14%) also edged past Wynncore Macau<\/strong>, while Sands China (19%) ran second only to our old chum Stanley Ho<\/strong>, who retains fully a third of the Macanese gambling market.<\/p>\n","protected":false},"excerpt":{"rendered":"

It’s been obvious since jump street that MGM Resorts International bit off more than it could chew when it upsized its ambitions for the old Boardwalk site into a civic citadel, a Valhalla on the Strip. Behind CEO Jim Murren‘s … 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":[65,80,56,28,18,134,4,96,94,62,93,11,110,12,61,32,9,19],"tags":[],"_links":{"self":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts\/4998"}],"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=4998"}],"version-history":[{"count":12,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts\/4998\/revisions"}],"predecessor-version":[{"id":29053,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts\/4998\/revisions\/29053"}],"wp:attachment":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/media?parent=4998"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/categories?post=4998"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/tags?post=4998"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}