James Packer Prepared to Cut Losses and Sell Cannery Casino Resorts to Boyd Gaming
Posted on: April 21, 2016, 07:27h.
Last updated on: April 21, 2016, 07:35h.
Billionaire James Packer is reportedly readying his Crown Resorts Limited gaming and entertainment company to take a sizable loss and sell Cannery Casino Resorts.
Packer purchased Cannery and its three owned and one managed property in 2009 for $370 million along with a $50 million termination fee stemming from an earlier accepted proposal Crown later annulled.
The effective price tag of $420 million for Las Vegas’ Cannery Casino and Eastside Cannery, and the Meadows Racetrack and Casino in Pittsburgh, Pennsylvania, is now expected to be sold to Boyd Gaming at a discounted price somewhere between $225 and $240 million.
Though both parties are staying quiet on the potential deal, sources tell Reuters that the sale should be executed in the coming weeks.
James Packer might have found his fiancé Mariah Carey while attending a movie premiere in Aspen, Colorado, but the businessman whose net worth is estimated to be around $3.5 billion hasn’t found much else to celebrate in the United States.
In Las Vegas, Packer’s investments have been one bust after another, and unfortunately for him, when it comes to business, what happens in Vegas doesn’t stay in Vegas.
His most notable failure in Sin City was the Fontainebleau Las Vegas, a still unfinished $2.9 billion casino and resort near the north end of the Strip. Packer’s company invested $250 million into the development, but after the Great Recession fell on companies around the world and other financiers withdrew their stakes in Fontainebleau, the project was shelved and filed for bankruptcy.
Packer’s quarter of a billion dollars was gone.
Packer Not Packing
You might think Packer’s Las Vegas shortcomings would be more than enough reason to send the billionaire packing back to Australia, but instead he’s re-buying into the game.
After months of speculation and financing concerns, construction is anticipated to commence in the coming weeks on the Alon Las Vegas. Situated on land that hosted the New Frontier for 65 years until it was demolished in 2007, Alon had suffered a series of fiscal setbacks since Crown acquired the 35-acre property in 2014.
But now it appears the project is in full green light mode, and Packer’s seven-year Vegas experience losing millions in the region hasn’t created a hangover-type headache severe enough for the businessman to call it quits.
This time around he has a not-so-secret weapon.
The first three legs of Mariah Carey’s Las Vegas residency show at Caesar’s Palace has grossed $14.4 million over just 26 total shows. Her performances restart on June 7 and run through the final contracted show on June 11.
Afterwards, Carey will once again be a free agent in Las Vegas, and smart money will be on Packer to land the superstar for Alon.
Residencies have been a staple of Las Vegas entertainment for decades, and today making sure consistent traffic is coming through the casino doors, especially during slow months and weekdays, is vital to keep up with competition. Few names in music are bigger than Mariah Carey, an artist whose career has spanned over two decades and sold over 200 million records worldwide.
It appears as if Packer finally has the upper hand in Vegas.