NORTH END GOES SOUTH: Riviera posts first-quarter loss

Quote: Wizard

I'd be happy to offer the same wager to you, but I decline the "or sold" counter-offer. Just because a property is sold doesn't necessarily mean it was financially troubled.

That is a good point about the Riviera conventions. I've been to casino chip collector shows there. However, it wouldn't surprise me if better located properties start undercutting Riviera convention space fees, even at a loss, to poach that business.

Understood. I revoke the 'or sold' clause.

I've got the Riviera staying open for business longer than Circus Circus.

And we're leaving Slots-O-Fun out of this, right? If Circus closes, but Slots stays open, the bet is still satisfied, right?

Quote: DJTeddyBear

Understood. I revoke the 'or sold' clause.

I've got the Riviera staying open for business longer than Circus Circus.

And we're leaving Slots-O-Fun out of this, right? If Circus closes, but Slots stays open, the bet is still satisfied, right?

Agreed! The bet will be resolved when either Circus Circus or Riviera permanently close their doors, including after an ownership change. The physical doors are the crux of the bet. We'll have to be gentlemen if it results in a Lady Luck kind of situation, which I think is equivalent to permanently closing. Agreed, Slots-O-Fun has nothing to do with it. The dinner shall be at a location of the choice of the winner. Are the added terms agreeable?

Do we put in a time limit for resolution? How about price limit on the dinner?

Lady Luck situation? You mean that the temporary closure turned permanent, or that despite being closed, it's still open for the timeshares?

(IS it still open for the timeshares? Wikipedia thinks so...)



(This is starting to sound like some lawyers got involved. LOL.)

May I humbly suggest that you resolve it when the doors close. They are still arguing that Castaways at the corner of Boulder Hwy and Fremont was not permanent, and they intend to rebuild and re-open at some time in the future and that's been over six years.

I don't think it matters to your bet, but MGM MIRAGE changed the licenses since last summer so that SLOTS-A-FUN no longer has a separate license (it's now just part of Circus Circus). I suppose they could close the main building, and the license just applies to the smaller building.

IS there a convention or something going on at the convention center this weekend? The north end hotels were considerably cheaper than the south end back in March.

I see no way that CC is closing. I think you are misreading their financials. You need to look at the EBITDA numbers, not the operating income/loss. CC has a positive EBITDA of $1.7 Million in the Q1 2010. This is the only number that matters from an operational decision making standpoint of whether to remain open or close.

This means CC is contributing about $6.8M (annualized) to MGM to cover MGM's debt and taxes. Operating loss includes non-cash expenses of depreciation and ammoritization. Non-cash expenses are irrelevant to management, in fact they are good things in that they reduce the firm's taxable income.

Quote: ruascott

IS there a convention or something going on at the convention center this weekend? The north end hotels were considerably cheaper than the south end back in March.

# May 14-May 22 - US Open 10-Ball Championship - Riviera Hotel & Casino - 6,000 people

Probably not the best time to take a review on Riviera room rates.

Quote: pacomartin

# May 14-May 22 - US Open 10-Ball Championship - Riviera Hotel & Casino - 6,000 people

Probably not the best time to take a review on Riviera room rates.

Ah, that makes sense then. The Riv was like $39/night back in March during the week, and something like $79 on the weekend.

I went back and looked, it appears that MGM has only been releasing the individual property results for the last two quarters. Before that it was just Strip and Non-Strip properties. But anyway, CC had a postive EBITDA for both of the last 2 quarters.

Since I had my nerdy accounting hat on, I clicked over to RHC's site to see the Riv's SEC filings. They also had a positive $2.8M in EBITDA for 1Q10.

None of this of course means that these properties are doing well by any stretch. But they are never going to close them as long as they generating some postive cash flow to cover their interest. BTW, the Riv is still not generating enough cash to cover their interest payments, and they have huge debt that appears to be coming due...hence the BK restructuring.

But alas, the good news is that as bad as things are, they are still generating operating profit. Of course if the revenue numbers continue on their downward trend, who knows.

They reported $55 for last quarter, Strat reported $46, and Circus Circus reported $44 for the year 2009 (they didn't report for the quarter).

Sahara doesn't report, but they haven't re-opened their buffet, and they are running the $1 room specials.

Hilton reported a 9% decline in room rates, but they didn't include average daily room rates and occupancy numbers in the filing.

But 2,956 rooms at $20.8 million is $78 REVPAR, but that is not counting the 300 suites. I don't think it is that much higher than the other properties.