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Rio Sold to Imperial Companies; CET to operate for 2 years

Discussion in 'Casino Industry & Development' started by Chuck2009x, Sep 23, 2019.

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  1. The Rumor

    The Rumor VIP Whale

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    I 100% expect the opposite...it's a built out lounge at a property that will still have Caesars Rewards. They'll leave it open and spend $0 in the place to keep it up.
     
  2. The Rumor

    The Rumor VIP Whale

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    Technically, the landlord would also be responsible for certain maintenance/upkeep. The split would depend upon the terms of the contract.
     
  3. BCguy

    BCguy Low-Roller

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    So, for now essentially nothing changes? Too bad really because a new buyer might have actually tried to improve the property. As it is I see Caesars doing nothing unless the buyer mandates it.
     
  4. shokhead

    shokhead No big spender unless eating drinking having fun!

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    :headbang::clap::headbang:

    So where will Penn and Teller end up?
     
  5. nostresshere

    nostresshere Mr. Anti Debit Card

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    gonna guess there will be a push-pull effect on things like the lounge.

    Finance guys will push hard to close the lounge down to save the cost of labor and booze and food and even minimal upkeep.
    Marketing will be pulling hard saying it brings in players and resulting casino revenue.

    Who will win? Need to add this to a bet in the sportsbook.
     
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  6. The Rumor

    The Rumor VIP Whale

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    Eh, it's a basic standard of a Caesars Rewards joint. It's going to be there. If this logic mattered, why not close it 3 years ago for more cost savings?

    They're going to run the place the way they did for the last 10 years.
     
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  7. The Rumor

    The Rumor VIP Whale

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    I would guess the Rio for now
     
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  8. shokhead

    shokhead No big spender unless eating drinking having fun!

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    They money for CET 550,000 square-foot conference center needs to come from somewhere.
     
  9. The Rumor

    The Rumor VIP Whale

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    Well, if you're buying something like the Rio now, some of what you're buying is an option to rebuild/change it. The 2 year lease deal gives them a stream of income back while buying time for them to decide if they want to change/replace the property.

    The option for the Buyer to buy them into a third year of gaming operations is fascinating...in essence, it guarantees that CET owes them $128 M back in the first 3 years. Of course they have operating costs/taxes/interest/etc. of their own to pay, but you can see how this works for everyone involved.
     
  10. shokhead

    shokhead No big spender unless eating drinking having fun!

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    Eric Rirnbaum, Co-Founder and Partner of imperial companies says on the website that he is currently developing hotels in Las Vegas and South Beach, Miami.
    http://www.imperialcos.com/
     
  11. hammie

    hammie VIP Whale

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    Here is a little nugget in the 8K filing: Caesars expects to record an impairment charge of certain tangible, intangible and other held for sale assets from $400 million to $440 million during the three months ended September 30, 2019 as the expected sales price is lower than the carrying value of the assets.
     
  12. nostresshere

    nostresshere Mr. Anti Debit Card

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    If you close something, you not only get ZERO income, but the value of the property drops fast. And the value of the FORMER business drops even faster.

    Surely you eliminate some expenses, but not all of them. Question is...would the lack of revenue balance with the reduced expenses? Or would the monthly loss be even larger (if there was a loss).

    Reminds me of a cartoon about GM back during one the auto crisis times. Some finance guy in the back of the room came up with the perfect plan to cut expenses. Close ALL the factories. At first glance it made sense... but....
     
    Last edited: Sep 23, 2019
  13. tex55

    tex55 High-Roller

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    I have some mixed feelings. I know that the Rio has become a dump, but I think that the dealers and most of the staff are friendly people. I still drive over there once in a while to eat at Fieri's place.
     
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  14. The Rumor

    The Rumor VIP Whale

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    CET is still going to be running a casino where they are trying to make a profit. They want Diamond players there, and they don't want to anger Diamonds who journey over to the Rio by not having a club.
     
  15. joespoolhall

    joespoolhall VIP Whale

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    Unless there is some stipulation in the lease back, I don't expect CET to make much in the way of improvements. On the other hand, I find it hard to believe you would allow the company that ran it into the ground, to keep doing so. I think at some point you would want to protect your investment. I guess we'll just have to see how it plays out.

    Good Luck!
    Ric at Joes
     
  16. shokhead

    shokhead No big spender unless eating drinking having fun!

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    Keep it as it is, fix thing as you normally would. I expect normal.
     
  17. Elizakess

    Elizakess Low-Roller

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    Actually David McKee of Stiffs and Georges a casino site just posted that Caesar’s intends to redirect customers from the Rio to existing properties on the strip so they may be right on that one. Makes it more likely it may close eventually.
     
  18. The Rumor

    The Rumor VIP Whale

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    Given Caesars can be free and clear in 3 years in the worst case., surely they will over time, yes. But they aren't going to do that by gutting the place over the next six months to piss off reliable customers.
     
  19. The Rumor

    The Rumor VIP Whale

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    it depends upon if the Buyer wants to keep operating it as the current hotel/casino after the CET operator period is up.
     
  20. downhiller2010

    downhiller2010 Tourist

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    My guess is they are taking the impairment charge to accelerate depreciation on some other property for tax purposes.
     
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