Bankruptcy ahead for CZR

Awash in debt, CZR (Caesars) is scheduled to file bankruptcy in two months.

see: bankrupt

They'll never recover, it will be broken up and
sold. It's inevitable, they're too far in debt.

This one won't be fatal, the creditors seem to be accepting it, but it could be the first peal of their death knell.

Quote: MrV

This one won't be fatal, the creditors seem to be accepting it, but it could be the first peal of their death knell.

It absolutely is. They're the Titanic and have
been sinking since 2008. The days of multi
casino empires is gone.

Speaking of empires, I heard they are considering renaming Caesar's Palace Romulus' Palace.

I wouldn't trust CP with my money. They are simply too shifty.

Quote: EvenBob

It absolutely is. They're the Titanic and have
been sinking since 2008. The days of multi
casino empires is gone.

That's awesome for AP's

Quote: AxelWolf

That's awesome for AP's

That's funny, that was my first thought too. lol

Quote: EvenBob

That's funny, that was my first thought too. lol

Followed by Internet forums like Skips page now VPree, Dark side rats and bigmouths. The consolidation of casinos was a driving force in killing the golden age of AP. If one place makes a mistake they tend to make sure others don't repeat it. Casinos would oftentimes copy similar promotion and compete with good % games.

However, I have seen a spike in AP plays(even with less good games) in the last year. Not sure if its Desperation, a better economy (Lets not argue the economy, thats my opinion) , just a change in the how thing work or they are trying new things.

What's the likelihood of a branching off of casinos from the big chain (CET, MGM, Stations, etc) in an event of bankruptcy or consolidation of debts?

The strip is currently controlled by a few big companies, so there's really no point in competing amongst the few. I like off the strip places because of variety, of course that leads to better promos.

Another factor is non-gaming revenue which clearly is the main forefront behind a casino's profits. With that being said I guess there is no incentive to provide full pay games with jackpot bonuses or a 4oak scratcher of some sort.

I found this picture on www.vegastodayandtomorrow.com. Of course it's a bit old so disregard the Stardust and other properties that are no long with us.



It's basically MGM with a splash of CET casinos right in the middle, but other then that there really isn't much in the way of diversity, with the exception of the Wynn/Encore and Venetian/Palazzo.

Quote: MrV

Awash in debt, CZR (Caesars) is scheduled to file bankruptcy in two months.

see: bankrupt

hm.. isn't the taj majal supposed to be bankrupct this month?

wikipedia list of Caesar's international properties includes the following:

Egypt
United Kingdom
Uruguay

not included:

Macau

CZR went from $11 on Wed to $16.50 today, 2 days up 50%. What is going on??? Someone is making huge money. It's almost flat so far today.

Quote: EvenBob

The days of multi
casino empires is gone.

MGM International will be around for a long time.

Quote: UCivan

CZR went from $11 on Wed to $16.50 today, 2 days up 50%. What is going on??? Someone is making huge money. It's almost flat so far today.

The price was depressed based on rumors of bankruptcy. Now that they know it will be a controlled BK, the company is looking (slightly) better long term.

This is one of the those cases where BK should work and they will come out of it a stronger company on the balance sheets. I wouldnt hold my breath for the end of big casino companies just yet.

Quote: odiousgambit

wikipedia list of Caesar's international properties includes the following:

Egypt
United Kingdom
Uruguay

not included:

Macau

Lovemans biggest mistake, underestimating the potential of that market. Now he is trying to be one of the first into Japan, but that will never be Macau.

Bankruptcy from Caesars seems like another chess move. Creating all these shell companies and shifting assets around within them. But they cannot seem to get over the hump. I wonder if they could he headed for "real" bankruptcy. In that case, how safe is Total Rewards? Anyone think we should spend up all our comps in case the company gets broken up?

Quote: Dnalorailed

Bankruptcy from Caesars seems like another chess move. Creating all these shell companies and shifting assets around within them. But they cannot seem to get over the hump. I wonder if they could he headed for "real" bankruptcy. In that case, how safe is Total Rewards? Anyone think we should spend up all our comps in case the company gets broken up?

Always better off safe than sorry. I think they're safe, 99/100 may think they're safe, but thinking they're safe, won't help in a worst case scenario. Hoarding I'm generally against for the slight but growing risk of mortality leaving credits unusable as well. I've met children and grandchildren come to the casino trying to use them and hated thinking it was preventable.

Quote: Dnalorailed

Bankruptcy from Caesars seems like another chess move. Creating all these shell companies and shifting assets around within them. But they cannot seem to get over the hump. I wonder if they could he headed for "real" bankruptcy. In that case, how safe is Total Rewards? Anyone think we should spend up all our comps in case the company gets broken up?

From what I've read, corporate values the TR program more than any particular properties or group of them, and it will be the best protected and last to go. I think they're going to shed the bottom tier of properties, consolidate some other things, and keep operating the largest network they can afford to keep open. And treat their TR contacts as the basis for the rebuild. They have invaluable demographics on players nationwide; they just need to do a better job of bringing them back more than 1x-2x a year, and encourage them to visit different properties.

If I were running their marketing, I would build a master Poker Run for all of 2015; one card per day per property, 5 cards max any particular property in the calendar year. Must earn 100 or whatever tier points to receive a card. Scale comps/rooms/travel offers to tiers. Best hands collected over the year win cash/comps/tier renewal/etc.

I would also build a Travel Club; issue passports for collecting all the properties. Or even a huge Monopoly game with sets in different geographic areas, since they're paying so much to license that brand. The less popular the property, the more value the visit would provide. People who collect a Monopoly would get tier point multipliers, bonuses, comps, prizes, whatever, along with their names entered into drawings for visits/travel credits/tournaments. Anybody who collected them all would get some special recognition/prize drawing/stuff.

I would also build a special subset of that club for RV'ers, and let them buy a special access pass, along with comped RV parking, that got them good pricing on buffets, good any CET property. They'd see a big jump in people who enjoy having a reason to travel with destinations all over the place.

The thing is, nobody else comes close in having that much geographic diversity within the US. But they seem to hardly scratch the surface of that potential. I've never understood that. All JMHO.

So CZR is 21 billion with a B in debt ?

Where did all the debt come from ? If it was from purchasing other Casinos, can't they sell them back (to someone) even if it were at a loss to reduce the debt ?

He totally missed the boat on Macau. Cash effing cow...

Quote: JohnnyQ

So CZR is 21 billion with a B in debt ?

Where did all the debt come from ? If it was from purchasing other Casinos, can't they sell them back (to someone) even if it were at a loss to reduce the debt ?

"January 2008 - Harrah's assumes $20 billion in debt when private equity firms Apollo Global Management and Texas Pacific Group acquired the company." ... wiki CZR

Quote: MrV

"January 2008 - Harrah's assumes $20 billion in debt when private equity firms Apollo Global Management and Texas Pacific Group acquired the company." ... wiki CZR

The date is important. Nobody knew what
coming later that year. In Jan a Vegas casino
was still a good thing to own.

They rolled dem bones and sevened out.

It always happens, you just never can tell when.

Why does stock keep going up? Up another 6% on Friday......

Quote: SOOPOO

Why does stock keep going up? Up another 6% on Friday......

They lowered the price at the Baccanal buffet

Quote: SOOPOO

Why does stock keep going up? Up another 6% on Friday......

I think the finance types think the idea of rolling all the real estate into a REIT, and then having a second company that operates and manages the properties is a good idea. Why they think this...I have no idea. It doesn't change the underlying dynamics of their debt. Just shuffles it around some. But these are the same chuckleheads that brought us the '08 financial crisis. So they'll believe anything.

The REIT and Operating Company is in combination with a bankrupcy and agreements with creditors, and I believe they are looking to reduce the debt in exchange for equity in a more valuable REIT company. Hence it's not just restructuring but also a reduction in their debt.

Quote: beachbumbabs

The thing is, nobody else comes close in having that much geographic diversity within the US. But they seem to hardly scratch the surface of that potential. I've never understood that.

Wall Street MBAs value what they understand and believe is in the works. The Evil Empire has long had computers that forever mine their own customers and encourage those gamblers to various hotels and casinos. For a large segment of Vegas, any casino hopping means going from one of their casinos to another one of their casinos.

Everyone has had ideas. RV parks for casinos has proven profitable in most markets. But the Evil Empire doesn't seem that enthusiastic.

Look at the smaller casinos in Mesquite. Lots of outdoor entertainment in that direction but all the fishing, golfing, rafting traffic goes right on by because the casinos never offer "tie ins" such as free meal with your Outdoor Adventure ticket. Executives often overlook the obvious.

A quick dip into bankruptcy court and the Evil Empire can emerge with an agreed upon plan and no adverse claims.

Quote: SOOPOO

Why does stock keep going up? Up another 6% on Friday......

Methinks the stock is too thinly traded, and they floated so little of their company to begin with. The bankruptcy is bad news for the bondholders, not so much for the equity holders. That said, I'm at a loss to explain why it's gone from 8.00 a share to 16.00 since October 13th.

Quote: teddys

Methinks the stock is too thinly traded, and they floated so little of their company to begin with. The bankruptcy is bad news for the bondholders, not so much for the equity holders. That said, I'm at a loss to explain why it's gone from 8.00 a share to 16.00 since October 13th.

Whats your thoughts on those CRUISE vouchers they will be handing out around Dec 12-14? Will they have any value come April or May?

The Horseshoe property I go to most often is managed by CZR but owned by someone else. I'm not sure how many of their locations are like that. This one is 100 % in the Total Rewards program.

So in a way, they are already doing some of this:

Quote: vendman1

I think the finance types think the idea of rolling all the real estate into a REIT, and then having a second company that operates and manages the properties is a good idea.

Quote: JohnnyQ

The Horseshoe property I go to most often is managed by CZR but owned by someone else. I'm not sure how many of their locations are like that. This one is 100 % in the Total Rewards program.

So in a way, they are already doing some of this:

Quote: vendman1

I think the finance types think the idea of rolling all the real estate into a REIT, and then having a second company that operates and manages the properties is a good idea.

Well that's fine, but I wasn't commenting on the viability of having a second company manage the properties so much, as the financial shenanigans that this really is. Read a book called "the big short" by Michael Lewis. He explains simply and clearly how during the run up to the '08 financial crisis the big mortgage lenders and investment banks just kept repacking the known bad loans into new investment which they then sold to each other. In an attempt to clean the debt. In the end it doesn't work.

CZR owes billions, in the long run the only way to pay that debt down is to earn enough money to do so....or..get your creditors to accept more favorable terms. They would argue that is what they are doing here. I would argue they are rearranging deck chairs on the titanic.

Quote: vendman1

Quote: JohnnyQ

The Horseshoe property I go to most often is managed by CZR but owned by someone else. I'm not sure how many of their locations are like that. This one is 100 % in the Total Rewards program.

So in a way, they are already doing some of this:

Quote: vendman1

I think the finance types think the idea of rolling all the real estate into a REIT, and then having a second company that operates and manages the properties is a good idea.

Well that's fine, but I wasn't commenting on the viability of having a second company manage the properties so much, as the financial shenanigans that this really is. Read a book called "the big short" by Michael Lewis. He explains simply and clearly how during the run up to the '08 financial crisis the big mortgage lenders and investment banks just kept repacking the known bad loans into new investment which they then sold to each other. In an attempt to clean the debt. In the end it doesn't work.

CZR owes billions, in the long run the only way to pay that debt down is to earn enough money to do so....or..get your creditors to accept more favorable terms. They would argue that is what they are doing here. I would argue they are rearranging deck chairs on the titanic.

...and in rearranging those deck chairs, they'll pay a whole bunch of financial gurus a whole pile of money. That's where some of the optimism in the market may come from--the restructuring may well help delay the demise of CZR but it will surely line some pockets along the way...

Formal filing today, the 15th.
The expected two divisions: An operating unit... with all casinos staying open.
A Real Estate Investment Trust for the other unit.

Delaware judge issue the normal stay of all state and federal actions in the interim.