Monday, March 23, 2009

MGM Mirage getting thumped like a red-headed stepchild

The massive economic woes of MGM Mirage continued today as their partner in the City Center project sued them for "breach of the joint venture pact" that was agreed to in August, 2007. Dubai World's suit against the Vegas based company is asking to be relieved of it's agreement obligations and also seeks unspecified damages. The suit alleges that MGM Mirage mismanaged the City Center project which led to large cost overruns ; the alleged budget at the time of the signed agreement was roughly 7.5 billion and now cost estimates approach 9 billion. Additionally, the suit alleges that MGM MIrage has fallen short on it's total raised financing quota for the project. The casino company's total listed outstanding long term debt has been estimated at 13.5 billion.

In addition to it's debt load, the new lawsuit, and the generally sour tourism and gaming economy, MGM has had to fend off media questions regarding phone calls made by Senator Harry Reid (democratic senator from Nevada and House Majority leader ) to banks for purposes of raising financing for the company. The Republican senator from Nevada also made some calls for the same purpose. Why wouldn't they? MGM Mirage is one of the largest employers in their state and has contributed billions of dollars to the general economy and billions to the state in the form of tax revenue. It appears very reasonable that the elected representatives should make attempts to support companies such as MGM Mirage. Sometimes, the media can't look beyond their noses and take an opportunity to simply shut up.

Regarding MGM- Mirage solutions? I'm no economist or financial analyst but what option besides debt restructuring under bankruptcy filing and protection do they have? I can't see any alternative. Without a huge cash infusion I question the logic of City Center's completion in the current economy anyway. The numbers are just too large to consider anything besides a bankruptcy filing barring some massive cash infusion by an unknown sugar-daddy. Once debt is restructured the business might be able to retain current employees and dig their way out of the quagmire with some time and the eventual recovery of our general economy. I wish them good cards and an eventual return to normality.

Cheers...
Chuck60

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Mostly Useless (and approximate) Las Vegas Facts

1. Number of Las Vegas citizens   500,000
2. Number of Clark County residents   1,500,000
3. Year first casino licensed   1931
4. Number of slot machines in Vegas   200,000
5. Number of annual Vegas visitors   40,000,000 (and dropping)
6. Number of licensed gambling entities   1700
7. Hours per day average visitor gambles   4
8. Annual state gaming revenue   9 billion (and dropping)
9. Average gambling budget per trip   560  (and dropping)
10. Mean price per acre in valley   161,000.00
11. Price per acre on the Strip   11,000,000.00
12. Number of  hotel rooms   137,000 +
13. Number of pillowcases washed at MGM daily   15,000
14. Number of doors at MGM  18,000 
15. Annual no. toilet paper rolls used at Bally's   1 million
16. Lucky The Clown marquee sign at Circus Circus has
      1232 fluorescent bulbs, 14,498 incandescent bulbs, and
      3/4 mile of neon tubing light  (no wonder they're replacing
      it!)
17. In good times, Excalibur goes through over 44,000 
      Cornish game hens, 15 thousand pounds of hamburger
      meat, and 4200 pounds of prime rib monthly
18. Caesar's Palace has used 2 million plus maraschino 
      cherries, 11 thousand ounces of caviar, 2 million ounces
      of tomato juice, and close to 600 thousand ounces of
      vodka yearly (bloody mary winner?)
19. Mandalay Bay has 5,300 palm trees and their wave pool
      has a capacity of 1,640,270 gallons of water
20. Average nightly room rate  119.00 (and dropping)
21. Average number of Vegas weddings per day   300+
22. Number of golf courses  37
23. Miles of neon tubing on the Strip and Downtown  15,000
24. State's nationwide rank in gold production  1st
25. Cost of Nevada marriage license   35.00
26. Average cost of filing for divorce  450.00
27. Average length of stay for visitors    3.7 days
28. Number of hosted conventions annually  3750
29. The electric bill to operate the Luxor pyramid beam is
      approximately 55.00 per hour.
30. Las Vegas has 17 of the world's 20 largest hotels   

"WHERE'S MY WALLET , ETHEL!? "

Just a cautionary tip when in Vegas.. there are active
pickpockets all over town. I experienced this first-hand
and came within 10 seconds of losing my cash stash last July
while visiting one of those upper end joints on the strip.

I was gambling significantly at a video poker machine, unabashedly slipping C-notes in them. Somebody had been
observing my wagering behavior. I was happily winning at the time and my cautionary tendencies regarding my bankroll
money went south and out the window.

A lady approached me from behind as I played and was all aglow with my run of good luck. She initiated a conversation about nothing and anything . I was concentrating on proper VP strategy and responding to her comments with a lot of "yeah-yeahs". I was fortunate enough to get ahead on the machine again and I cashed out. I had a satchel (I normally never gamble under those conditions) with me that had assorted trip stuff in it. The satchel presence and the relatively high denomination coin-in amount collectively screamed " please rob me!" I placed my wallet in the satchel along with the machine cash-out tickets and proceeded to reconnect with my family and head to our room.

I had developed a sense of cautionary unease as I mulled over the contact with the effusively talkative woman at the VP machine. My senses told me that something about that encounter was skewed, although at the time I didn't know what it was and I wasn't bleeding profusely..yet. My group then proceeded to meander through a very crowded slot machine aisle and some other 6th, 7th, or 8th sense that vaguely detected an impersonal yet succinct encroachment into my personal space kicked in. Instinctively, I immediately dug into the satchel to locate my wallet and it was gone. I then immediately turned around and backtracked about ten feet (a matter of maybe 3 seconds, tops) as my endogenous adrenaline kicked in. I'm not sure that my hair wasn't on fire briefly.

I then spotted my wallet (and life) in a woman's hand who was playing a slot machine. I walked straight at her and demanded it post-haste in a tone that screamed seriousness. I immediately grabbed the wallet and called for security. The woman claimed she picked it up off the floor and so did the man (her accomplice) behind her, both vowing that they were planning to remit it to the security desk. My svelte ass they were.

This team of thieves including the woman who was all goony-googoo at the VP machine were pros. I have to claim part of the blame for the openly careless manner I had displayed with my money. They were held by security and the eye-in-the-sky tapes were to be reviewed.

The good thing is I didn't lose a cent because my peripheral senses kicked in immediately and they didn't have time to bury the evidence ( perhaps they weren't the best of pros?). Take heed folks..these people are everywhere in Vegas. Know where your cash is at all times; take precautions to protect it, don't flaunt it around carelessly as I did, and if you sense something is awry while gambling trust your instincts.

Distractions from one member of a team of thieves is a common MO. Store your gambling session monies in a front pants pocket or in one of those god-awful front-loaded fanny packs (pride be damned). The lesson I learned here after several years of Vegas gambling experiences turned out to be one of the most valuable for me personally.


Cheers..
Chuck60