Vegas Gang #112 – August 15th, 2014

REMINDER: VIMFP 2014 is October 18th, 2014!

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This time on the show:

– Revel Will Close
– SLS Will Open
– Packer & Pascal form P & P Music Factory
– Rollins vs. Schwartz vs. the world

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Dr. Dave – 10 Things You Don’t Know About | Tim’s Kickstarter | Chuck’s Work
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Hunter – Overcast for iPhone
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8 thoughts on “Vegas Gang #112 – August 15th, 2014

  1. I’ve never been to Atlantic City, so if this is a laughable idea I am not offended. I was wondering if:
    Could Sam Nazarian be the savior of Atlantic City?
    Assuming SLS is a big success, and their business model of providing frugal luxury with a low reliance on gaming, and higher profit margins through the use of in house owned and developed entertainment and F&B offerings is a real game changer when they get to the net-net takeaway. Is AC able to be positioned as a provider of wider ranged tourism experiences than their current dependence on gaming has displayed? Are there challenges with the geography, political climate, infrastructure or regional perception that are insurmountable, or very difficult? It appears to me that there are perfectly good buildings already there and they just need to be repurposed.

  2. Personally, I’d like to see if he can vitalize the North Strip (or at least 10% vitalize it) before I start sending him off to save other places. 🙂

    That said, in my mind the transportation problem is a pretty huge one. Atlantic City’s airport is too small which means most people have to either drive (north easterners) or fly+drive from Philadelphia. It’s a drag.

    I also think there’s a real question about the industry, in conjunction with the local government’s willingness to really do what is required to make big changes. As we talked about two episodes ago, they don’t allow beach party type venues… I understand those kinds of things have downsides but if they’re not willing to really think differently, they’re in trouble.

  3. Haven’t been to AC since ’09, but I really liked the Harrah’s/Borgata area. Boardwalk didn’t do that much for me. I can fly FLL-ACY in 2.5 hours, much easier than going to Vegas, but I’d rather go to Vegas.

  4. Dr. Dave didn’t think the smaller rooms will be too much a deterrent. Other friend thinks it will be. We’ll see.

  5. Jeff – I think given NJ and their gaming commission would have problems with Nazarian. – remember this is the same state that wanted MGM to divest its interest in Borgata due to its connections with Pansy Ho. Of course they were never able to divest so now they are still active with Boyd there. That’s my observation I’m sure Dr Dave can comment if I’m off base.

    I really want AC to succeed but they really need to reevaluate their model. Charging 50 for casino parking when there’s a beach concert turns off future customers I’m sure. Not to mention I heard that the crowd may have been photoshopped to look bigger, but that’s a separate issue.

    Cheers to all

  6. To tweak an old joke financial analysts exist to make the the astrologers look intellectually credible.

    Having said that the New Jersey gaming commission requires casinos to report profits and losses quarterly. Resorts and the the Taj are burning through a lot of cash.

    If Resorts can not start producing positive cash flow from customers they pick up from the closed casinos by next summer I think it closes. The Mohegan Sun tribe owns Resorts and given the declines in the Connecticut market I wonder how long they will carry this property. The same applies for for the Taj.

    Also, I find the back patting that occurs in Las Vegas over the state of the entertainment industry in that city delusional. The casinos in Nevada have losses of over a billion dollars a year. Industries that lose money eventually shrink.

    Long post but I tried to reserve a room at the SLS for a week from October 4 until October 11. It costs $107 a night on average. The D cost about $65 a night on average because because weekday rooms were $34-$39. I do not see how SLS can compete with that midweek pricing given their location.

  7. Forgot to mention the other day that this was another great episode, and I want to thank you guys for taking the time to do it whenever you can. (And no, I am not going to rip you a new asshole in the next few paragraphs)

    I don’t think it is unfair to say that Hunter and Chuck have been generally negative in their opinion of Nazarian’s chances in getting SLS Las Vegas open. And I think there is still a skeptical approach to whatever news comes from the project. I think the concerns about the location and getting people to go there are overemphasized. It is still on every description of “The Las Vegas Strip”. It is on one of the most famous streets in the world. A street that Australian billionaire James Packer described as something akin to the mother road of the gaming industry. It has countless cars and buses driving by, a monorail stop, an Interstate 3 blocks away. And I never hear anyone say that the Stratosphere (which is 3-4 blocks North and not on the traditional description of “The Strip”) is at risk because of it’s location. Maybe because it has been operating successfully enough for over 15 years? Seems to me that Caesars spent more than the SLS cost to build an “Observation Wheel”, a Polaroid Store and some other shops & bars. And MGM spent more to build an arena, Shake Shack and other dining/retail.

    I think that Nazarian is willing to have a small ownership percentage in Las Vegas in order to maximize his “brand”. I would guess that his true ownership in many other SLS related operations may not be much different. Much as Holiday Inn was mainly a hotel/motel franchisor for decades (taking only a small percentage of the overall revenue) before Phil Satre guided it into becoming Harrah’s/Caesars, and Wal-Mart didn’t own their real estate because they didn’t have the financial ability to fund their explosive growth if it included fixed assets, SLS appears to have chosen to give up ownership for growth. It has worked for many and failed for many. Time will tell.

    But, I like what I have seen of the SLS transformation I have seen so far. I think it is stuff that looks more valuable than it really is, and I want to buy in. That is what makes dreamers into visionaries IMO.

    Love you guys. No BS. Pure love and appreciation.

  8. I think most people who listen to this show and read Chuck’s phenomenal Vegas Tripping blog (including me) did not think SLS would reopen primarily because of the location. Sam Nazarian came through with the cash and here comes SLS.

    I used to sell printing to the Sahara Hotel and Casino in the mid 90’s and I would wander through the property going to the different departments and it looked old and rundown then. Now Sam and his team at SLS will open this weekend and let’s see how they do.

    Thanks to all you guys for putting together this show. I was reading a newspaper article recently and they were talking to a photographer who was extremely successful and has taken pictures of Lou Reed and a lot of other famous musicians. He was in his mid 40’s and he said when he was growing up in the late 70’s he would sit around and have nothing to do so he started taking photographs of different things. Eventually this led to his life long passion which is being a successful photographer. In the excellent book “Retromaia” by Simon Reynolds he said something similar in that in the early 1980’s he would patiently wait for a music magazine to come out once a week because he was also bored most of the time and had nothing to do.

    Now it is the opposite. Not enough time and to many things to do which makes it more impressive on how good this Vegas Gang podcast has done over the years.

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