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MGM has sold MGM Grand and Mandalay Bay

Discussion in 'Slot Machines' started by SIlverGolfer, Jan 15, 2020.

  1. SIlverGolfer

    SIlverGolfer Platinum
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  2. MGMSpringfield

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    I'm a fan of MGM but would prefer them not to buy Cosmo. MGM owns enough of the strip, don't need them owning everything.
     
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  3. SIlverGolfer

    SIlverGolfer Platinum
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    It would merely be a real estate deal - the new partnership with Blackstone REIT is interesting given that Blackstone owns Cosmo
     
  4. Funkhouser

    Funkhouser Regional Gambling Specialist
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    More money for the shareholders and debt write down. The casino companies would rather pay rent and lower capital spend.
    REIT are attractive investments for the time being. I'm waiting for the next Vegas downturn when revenues drop and casino companies
    will have limited credit facilities because they don't have as many physical assets to borrow against. Then those rent payments will look YUGE
    and they will be desperate to get gamblers in the door.
     
    Char1, Hard4 and HighLimitorBust like this.
  5. chico7800

    chico7800 Silver

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    Interesting they already did the same thing with Bellagio.
     
  6. 44inarow

    44inarow Cool Story Bro
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    In addition, without getting into politics, the REIT loophole is exactly that, a loophole, and I can't imagine they won't try to fix that a few years down the line.
     
  7. 44inarow

    44inarow Cool Story Bro
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    Yep, this one is a little more complicated as I understand it (because it's not a straight-up sale/leaseback like with the Bellagio deal), but I'm sure this is designed primarily for tax purposes.

    @Funkhouser is absolutely right, by the way, at a certain point these companies are going to run out of assets to unlock. It's not all that different from cashing in your 401k; it gets you money in the short term, but it's not something you can do repeatedly.
     
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  8. bayoubengal

    bayoubengal World's Worst VP Player
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    It’s just changing where the cost shows up on the balance sheet. It’s basically all the same in the end but it matters for accounting and how it looks for investors and SEC filings.
     
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  9. Mr2BOBCATS

    Mr2BOBCATS Platinum

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    So the bird that lives in the MGM Grand Buffet.... who does she pay rent to and how much will it be?
     
  10. MGMSpringfield

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    I've heard and read nothing but bad reviews about that MGM Grand Buffet, I've never tried it myself. I wonder at on what point they give it a revamp? I realize its not the top tier property but it's still a big name in the brand.

    Maybe that bird is "seasoning" the buffet from above.......
     
  11. SIlverGolfer

    SIlverGolfer Platinum
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    I don't think it's a big name in the brand any longer. Just walk in and look around - old and tired - like NYNY and Paris
     
  12. kwool

    kwool Silver

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  13. LeaLea

    LeaLea Silver

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    I used to love MGM...always stayed there. But, then they decide to open nightclubs that catered to the young tourists.....who don’t gamble. The clientele turned loud, drunk, and obnoxious. I couldn’t gamble early mornings, as I like to do, without someone asking me for money or trying to pick me up. I am old enough to be their mother, so I just shooed them away. I also quit staying there.
     
  14. Boonedocks

    Boonedocks Silver
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    I am only at MGM when there is a particular slot tournament going on. (still stay at the Bellagio). The number people walking everywhere in bathing suits wrapped in towels wearing flipflops is just absurd I have absolutely no desire to be there any longer than I have to. ¯\_(ツ)_/¯
     
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  15. kannedham

    kannedham Silver

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  16. 44inarow

    44inarow Cool Story Bro
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    It's theoretically possibly, but (EDIT: NOT) likely from a practical perspective. If, say, MGM couldn't pay rent to MGP for Mirage, there would be legal ramifications, but nobody in their right mind would just let the casino close, and though I suppose they could find another operator, it's not like there are a lot of options out there. It's like being a landlord in a down market; my building, for example, is only about half-full right now, with tons of units on the market, and if I suddenly couldn't pay rent because my job was furloughed, I have a feeling the landlord would much rather basically put it on my tab and make me pay it back later (probably with interest and penalties), rather than let it sit there empty with no prospect of making money off of it.
     
    #16 44inarow, Mar 22, 2020
    Last edited: Mar 22, 2020
    MNSlotLover likes this.
  17. kannedham

    kannedham Silver

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    True. I just find it funny that basically when people said at beginning of tread is happening and obviously no one could predict
     
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  18. Funkhouser

    Funkhouser Regional Gambling Specialist
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    Provided they didn't spend all that capital on stock buy backs or debt write down they will be okay.
    However given their stock prices are trading at a third, there will be alot of temptation for these companies to buy back ownership on the cheap
    to help pad their bottom line. This is cycle of bad decisions where a company chooses profit over people.
     
    Wiscolovesvegas likes this.
  19. bayoubengal

    bayoubengal World's Worst VP Player
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    If anyone who gets a bail out then executed a buy back with that money....I’ll be quite annoyed. This goes for any industry.
     
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  20. 44inarow

    44inarow Cool Story Bro
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    Yeah, without getting too far into politics, that's an ongoing discussion with pretty much every industry.
     
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