DeathWatch V : VegasTripping Interview With Nick Christenson 2009

Turn Your Head and Cough Las Vegas, The Doctor Is In (again)

Posted by Chuckmonster

Las Vegas Casino Death Watch

VT: So, Phil Ruffin is back. Shall we rejoice or scratch TI off our recommendation list?

Nick: At the Death Watch we gave Ruffin a lot of crap for making grandiose plans for the New Frontier that never came to fruition. For about a decade we heard every crazy rumor about what great new plans he was working on and nothing ever happened. However, he never made the place worse, and he did settle one of the longest labor actions in U.S. history, so even if he did deserve some ribbing for his plans, he deserves some slack for the actual operation of his place. He says he plans to make no changes to the place, so either we can take him at his word, after all, he had nine years of practice making no changes to the New Frontier, or we can presume he'll do just the opposite.

Here's a sign of the times. Phil Ruffin has a real boat load of money by just about anyone's standards. He received 1.2 billion for his sale of the New Frontier. He also owns an island. He put $600 million dollars cash down for the TI and was having problems financing the remaining $175 million! Are you kidding me?! That's how rough it is to finance stuff in this climate.

VT: What is your gut feeling about ARIA/City Center?

Nick: This is pure guesswork on my part. It depends on what the bond holders say, it depends on what Dubai World really wants, and it depends on how bad business remains and for how long. My guess is part of it isn't finished for a while, other parts are completed and opened, and the place limps along until things get better. That's pretty much what I think is going to happen everywhere. If things get a lot worse or stay bad for a long time, though, all bets are off.

VT: Does Cosmopolitan/Denizen have any chance at all of being successful?

Nick: I think it has a chance of being moderately successful in the long run, but it has very little chance of being successful in the short and medium term. The place isn't finished, there are big questions about their design, and I know folks are just lining up to stay at any place managed by Deutsche Bank.

VT: Lots of people really want to see Steve Wynn buy back some of his older properties. If you were a honcho at Wynn Resorts and had the power to green light any purchase - property or parcel - what would you target and how much would you be willing to spend?

Nick: Wynn just opened Encore at a bad time, and we're still seeing how things are shaking out in Macau. I'm not sure he's got a cash position to be buying right now. However, if I were him and I could make it work, I'd really love to buy back the Bellagio, if for no other reason than to just stick it to Kirk. What would be a good price? I don't know. Maybe $2.5 billion in this market? I think the Mirage could be had for just over a billion, and Circus Circus might be on the market for a finely aged free hot dog from the old Westward Ho.

VT: Harrah's is also in dire straits. What's the prognosis?

Nick: It's harder to tell because their books are mostly private at this point, but I'm expecting they're in a world of hurt. I think it's 4 to 1 in favor of them either doing a major debt rework or filing Chapter 11. I think their run rate will keep their places open and afloat, but they and Stations went private at the worst possible time for the folks who bought that debt.

VT: People have been predicting that Harrah's will unload the Rio for as long as they have owned it. What other potential property sales do you see Harrah's making to save them from their crushing debt load?

Nick: In Las Vegas, the Rio is the sale that makes the most sense. If they sell other assets, I'm guessing those would be in other markets. I'm also guessing that those are places, most due to cost and other factors, that are more appealing to potential buyers. Properties in Iowa, Indiana, Louisiana, et. al. are probably the most likely to be sold. Also, if anyone wants a casino in South Lake Tahoe, I suspect Gary Loveman would be willing to take your call.

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Comments & Discussion

So, like..when is Bellagio going to get rid of the old tube TVs?

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