pacomartin
pacomartin
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November 18th, 2010 at 9:43:21 AM permalink
Aria had net revenue of $219.4 million in the 3rd quarter.
Aria is in 3rd place of the MGM Resorts behind Bellagio $269.4 million, and MGM Grand $231.6 million Both of these older casinos are are running an operating profit of well over a $ million per day which is barely putting a dent in the $4 million a day that City Center is losing, or the $30 million a day that corporate operations is losing (presumably because of interest).

The non-city center operations went up to $1.557 billion from last year's $1.533 billion but based mostly on management of non-gaming luxury hotels around the world.

It is hard to believe how this corporation can keep losing money at this rate.
Croupier
Croupier
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November 18th, 2010 at 10:37:56 AM permalink
When wandering around CityCentre on my last vacation I found it generic. There was nothing that would ever have me going back now that I have sated my curiosity. I dropped a grand total of $20 through the slots, and left up $5. I did not even bother looking for the tables.

I dont know how many people thought like me, but with CityCentre seemingly having little brand identity, either as a part of MGM or as a standalone property I dont know how you could market it to try and improve its business. There are many more high end places with stronger identities which may attract people (Caesars, Bellagio amongst them) and even more low end properties with strong branding which visiting or staying at may be seen as part of the Vegas Experience. I dont know how CityCentre could ever fit into that.

Plus the actual buildings are eyesores. If it was imploded tomorrow I wouldnt miss it, and I cannot say the same about such things as the Circus Circus tent and Sahara dome.
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Ayecarumba
Ayecarumba
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November 18th, 2010 at 10:47:05 AM permalink
Quote: pacomartin

Aria had net revenue of $219.4 million in the 3rd quarter.
Aria is in 3rd place of the MGM Resorts behind Bellagio $269.4 million, and MGM Grand $231.6 million Both of these older casinos are are running an operating profit of well over a $ million per day which is barely putting a dent in the $4 million a day that City Center is losing, or the $30 million a day that corporate operations is losing (presumably because of interest).

The non-city center operations went up to $1.557 billion from last year's $1.533 billion but based mostly on management of non-gaming luxury hotels around the world.

It is hard to believe how this corporation can keep losing money at this rate.



Has the total handle for Bellagio+Monte Carlo+Aria gone up since CityCenter opened, compared to Bellagio+Monte Carlo prior the opening? In other words, how much of the business at Aria was "monorailed" from the existing, connected properties? If most of Aria's $219M actually grew the total pie, that may not be a bad thing for MGM as the flow of visitor's discretionary cash loosens up.
Simplicity is the ultimate sophistication - Leonardo da Vinci
pacomartin
pacomartin
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November 18th, 2010 at 11:26:38 PM permalink
Quote: Ayecarumba

Has the total handle for Bellagio+Monte Carlo+Aria gone up since CityCenter opened, compared to Bellagio+Monte Carlo prior the opening? In other words, how much of the business at Aria was "monorailed" from the existing, connected properties? If most of Aria's $219M actually grew the total pie, that may not be a bad thing for MGM as the flow of visitor's discretionary cash loosens up.



Certainly Bellagio+Monte Carlo+Aria is doing better than Bellagio+Monte Carlo last year. If it did that badly executives would be jumping out of windows.

But the gaming revenue for the first 9 months compared to the last three years (for the entire company not just Vegas) are:

$2,389,704,000 first 9 months of 2007
$2,271,978,000 first 9 months of 2008 -4.9% from the previous year
$1,990,103,000 first 9 months of 2009 -12.4% from the previous year
$1,834,132,000 first 9 months of 2010 -7.8% from the previous year

So Aria has not been enough to maintain the already awful corporate-wide gaming returns of the year 2009.

Less than 20% of MGM Resorts come from outside of the Vegas Strip.
Ayecarumba
Ayecarumba
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November 19th, 2010 at 9:59:14 AM permalink
Thanks for the info Paco.
Wow, that is bleak, considering better numbers reported by similar "high end" chains. Perhaps Sands' and Wynn's Macau ATM's are really skewing things.
Simplicity is the ultimate sophistication - Leonardo da Vinci
ironhead395
ironhead395
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December 28th, 2010 at 8:04:36 PM permalink
Quote: Croupier

When wandering around CityCentre on my last vacation I found it generic. There was nothing that would ever have me going back now that I have sated my curiosity. I dropped a grand total of $20 through the slots, and left up $5. I did not even bother looking for the tables.

I dont know how many people thought like me, but with CityCentre seemingly having little brand identity, either as a part of MGM or as a standalone property I dont know how you could market it to try and improve its business. There are many more high end places with stronger identities which may attract people (Caesars, Bellagio amongst them) and even more low end properties with strong branding which visiting or staying at may be seen as part of the Vegas Experience. I dont know how CityCentre could ever fit into that.

Plus the actual buildings are eyesores. If it was imploded tomorrow I wouldnt miss it, and I cannot say the same about such things as the Circus Circus tent and Sahara dome.




I read this post and strongly agreed with most of it. I was in CityCenter myself August 2010. It doesnt seem to fit in well on the strip and doesnt have a good Las Vegas feel to it.

Although CityCenter is very extravagant inside and out, Im not sure what you were looking at when you referred to the buildings as "eyesores". That may be a biased opinion since I work in the construction field and erect steel buildings for a living. Regardless, eyesores they are not. As for those two buildings you referenced, Circus Circus and the Sahara, are the main culprits in making the north end "The Armpit" of the strip.

So if they implode the CityCenter tomorrow, I wouldnt miss it either. But go ahead and take those other two with it.
FleaStiff
FleaStiff 
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December 29th, 2010 at 5:56:06 AM permalink
I think its more that Circus Circus and Sahara have something. Some theme. Some interest. Some history. (Even though wags will probably chime in at this point with: Some Dump!)

City Center was an umbrella name for Hotels, Restaurants, Shopping and oh yeah, a casino in there somewhere too) but no unifying theme and no real "draw" to it. City Center was contemplated as a "there is enough vibrancy in Vegas to sustain just being here". They forgot it takes a long time to build things and alot can happen to the economy and interest rates in that time.

People would come to see the Bellagio Fountains but stay at Circus Circus. Now maybe they will come to see the City Center Implosion, but stay at the Sahara. Atleast the Sahara offers its One Dollar Rooms every now and then. What does City Center offer other than "If you are rich, here we are" in a town that lots of high prices hotels, restaurants and shops?
boymimbo
boymimbo
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December 29th, 2010 at 7:18:28 AM permalink
On their 10-Q for Q3, City Centre's showing a loss of 963 million year-to-date (9 months)

Their total long term debt on the books is 12.6 BILLION dolllars. Of that, 454 million is due in 2011, 544 million is due 2012, and 1.4 billion is due in 2013. Interest expense, YTD is 840 million dollars.

The impairment charge on CityCenter, year to date is 1.4 billion dollars and 182 million in the 3rd quarter. These impairments (which effectively decrease the value of the asset and show up as a "property charge" on the income statement in the operating expenses section is effectively an estimate in the value change of the CityCenter project and is a non-cash charge. Amortization (depreciation) is another non-cash charge which is on the books for 158 million. When you take the impairment, depreciation, and related impairment declared on the Borgata in Q3, MGM would have a net income for the quarter of about 255 million, which is pretty much equal to the interest expense.

The things to look at is: Can MGM service its debt? It has 1.3 billion in senior credit to borrow as of September 30. All of its properties except for CityCenter and Circus Circus are showing operating income, but most are down considerably (except for Bellagio). It has a debt obligation of 454 million in 2011, and with cash from operations much greater than that, my bet is that MGM will be just fine.


So, if MGM can pay its credit obligations in 2011 and bring in enough cash to do so, they may survive.

I think it will.
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