Steve Green of the Las Vegas Sun reports that the management of Station Casinos have reached a deal in principal with key lenders that will allow them to reorganize and retain control of the company.
While the company didn’t disclose details, the arrangement with lenders holding $2.475 billion of debt secured by four of Station’s most valuable hotel-casinos is expected to result in the lenders swapping some debt for equity in the company.
While there has been discussion in the bankruptcy case that the lenders could take control of the four properties and that the properties would be spun off or sold, the agreement disclosed today does not do that.
Instead, the deal — if approved — would keep the company and its 18 casino properties and extensive land holdings together.
It’s expected members of the founding Fertitta family, along with Station majority owner Colony Capital of Los Angeles, would maintain equity stakes.
The Fertittas would make a substantial, but undisclosed, equity investment and the current management team led by Chairman and Chief Executive Frank Fertitta III would continue to lead the company.
Payout Perspective:
The deal was unofficially announced February 25th; just a few weeks ahead of the deadline imposed upon the parties by US Bankruptcy Court Judge Gregg Zive. The expectation is that a formal announcement will take place this summer.
Note: the “substantial, but undisclosed, equity investment” that the Fertittas will have to make in order to retain control of the company. The cash from the 10% sale of Zuffa LLC. to Flash Entertainment in Abu Dhabi might come in handy.
I think if the Fertittas put the power of the UFC behind Station Casinos by building their own arena at one of the properties it would bring people in and that would fill rooms and money would be spent in the casinos.
To have a greater impact they could also add Ufc themed resturants, bars and gift shops.
The bottom line is the Fertittas have the ablitity to have Station Casinos make a ton of money while still saving face with thier shareholders instead of the UFC/Zuffa making the money from site fees charged to MGM or the Palms……..
Just last month I went to a show during super bowl weekend , and where was the heavily promoted afterparty?…………it was at the Venition hotel………….Does none of the Station properties not have a bar or nighclub?…………….
As for thier properties being off the strip…………..who cares………………if you are paying $200 for a ticket what is $20.00 for a cab ride?………I am sure the taxi business would be happy to help out?………………
Ehh for someone that has been to Vegas to see multiple UFC fights, I for one would DEFINATELY not want it to be at one of the Station Casinos.. I have stayed at one before and was not impressed.. The whole crowd/atmosphere os different there with it being a lot more of an older/local crowd..
@ shawn
Have you ever tried to convince a bunch of girls visiting Vegas to leave the strip to go to a small nightclub at a local casino over Tao at the Venitian? Doesn’t work. Won’t happen. Even if the properties were downtown just a couple minutes from the strip it wouldn’t happen. No one flying into Vegas to see a fight wants to go to an afterparty off the strip or to fights off the strip. Just will never happen.
You to must live in vegas, as I live out of state and if I am coming to the fight I can careless if it is on the strip or not. There are very few place in the world that can compare to Vegas, but they can still sell out a UFC card and bring money to that area. Look at Montreal no where near the same but fns will go to the fight and spend a lot of money doing it……………I agree the Station casinos are not in the same league as anything on the strip, but what is to prevent that from happening………..you build it and people will come………….
That money came in handy after all, i believe we all knew it would, but it does seem so small. 100 to 150 million in liquid cash towards 2.5 billion debt seems a bit shy of what you would need beyond a few months of payments. The empire is going to fall, whether today, tomorrow or a few years from now. The US recovery is stagnant and will likely take upwards of 2-3 years to recover. Can Station hold on that long?
nah…they are really selling the ufc…to save station casinos