  News950 Member Username: News950 Post Number: 17 Registered: 03-2008 |
http://www.wwj.com/pages/22811 95.php? | ||
Digitalvision Member Username: Digitalvision Post Number: 859 Registered: 11-2003 |
Just proof that Casinos are not the impervious cash cows people think that they are - that they're a business like everyone else. | ||
Rax Member Username: Rax Post Number: 310 Registered: 11-2007 |
That's not really the case in this instance. | ||
Digitalvision Member Username: Digitalvision Post Number: 860 Registered: 11-2003 |
Threads smoked out? I've barely visited the past week so I have no idea what you're talking about. | ||
Mortgageking Member Username: Mortgageking Post Number: 88 Registered: 12-2006 |
careful.... | ||
Digitalvision Member Username: Digitalvision Post Number: 861 Registered: 11-2003 |
Rax, although profitable, it's not much. According to this article http://freep.com/apps/pbcs.dll /article?AID=/20080530/BUSINES S06/80530059 Their profit, according to those numbers, is about a half of a percent. It -technically- is a profit but it's not good. It's worse than supermarket margins. | ||
Tkshreve Member Username: Tkshreve Post Number: 380 Registered: 07-2006 |
1/2% of a boatload of money. It all sounds relative to the amount of money that goes through that place. | ||
Raptor56 Member Username: Raptor56 Post Number: 327 Registered: 05-2007 |
http://detnews.com/apps/pbcs.d ll/article?AID=/20080530/ENT08 /805300426 sounds like a fancy way to force their creditors to redo terms on their debt. Same thing the Airlines just went through, as well as a number of the Auto Suppliers. The thing I don't understand is how they have assets of less than $50,000. Given all the issues with the expansion, one starts to wonder about the quality of upper management. Didn't one of the original owners recently buy a new stake in the casino? | ||
Topflight Member Username: Topflight Post Number: 6 Registered: 04-2008 |
The company I work for has a major contract with them on the hotel. | ||
Bigglenlake Member Username: Bigglenlake Post Number: 5 Registered: 05-2008 |
This is obviously a mistake. These casinos are the new engine that is driving the renaissance of Detroit. The increasing gambling revenues are paying for the mayor's new capital improvement plan | ||
_sj_ Member Username: _sj_ Post Number: 2237 Registered: 12-2003 |
This has been expected for sometime. quote: While 15 million is a lot of money to you and me, it is nothing to a business that size that spent almost $200 million on an expansion. What real assets do they have? They must not own much to have such a low asset total unless it is misprint. (Message edited by _sj_ on May 30, 2008) | ||
Emu_steve Member Username: Emu_steve Post Number: 644 Registered: 11-2006 |
Is the problem that they are making money on their continuing operations (i.e., gambling) but can't pay the bills on their expansion. We've all heard of folks who decided to take on a costly undertaking and ended up biting off more then they could chew. (I do realize that this casino was legally obligated to build a hotel). ?: Will (or why didn't) the owners sell? | ||
Gambling_man Member Username: Gambling_man Post Number: 1080 Registered: 11-2003 |
For anyone that cares, the asset number is a mis-print. | ||
_sj_ Member Username: _sj_ Post Number: 2240 Registered: 12-2003 |
Thanks for the info, I thought it had to be a misprint. | ||
Jjaba Member Username: Jjaba Post Number: 6550 Registered: 11-2003 |
Now I lay me down to slumber praise the lord I'll hit the number. If I die before I wake put a dollar on 408. My Greektown numbers man is not affected. All bets in by Noon. jjaba. | ||
Emu_steve Member Username: Emu_steve Post Number: 645 Registered: 11-2006 |
interesting paragraph: "Martin said talks continue with the Bloomfield Hills based Entertainment Interest Group that intends to purchase a 40% stake in the casino for $79 million." | ||
Gistok Member Username: Gistok Post Number: 6905 Registered: 08-2004 |
Interestingly enough, when Ted Gatzaros and Jim Papas sold their 40% share of Greektown Casino to the Indian tribe (because they didn't pass the state gaming background check at that time)... they got $248 million for their 40%. Now someone else is buying that 40% for about 32 cents on the dollar. | ||
Viziondetroit Member Username: Viziondetroit Post Number: 1734 Registered: 11-2003 |
The thing about it is, the casinos have to make a certain amount of money via state gaming rules. So that means, they are still making a shit load of money but not as much as the state requires so it's not to be looked at as a "normal" business. | ||
Mackinaw Member Username: Mackinaw Post Number: 4835 Registered: 02-2005 |
So you're saying that those cranes on St. Antoine and Monroe may as well be building Detroit's next vacant building? ...I'm not that stupid, but I guess some of the financial planners at the casino are. | ||
Jimaz Member Username: Jimaz Post Number: 5461 Registered: 12-2005 |
You'd think the last business to have to file chapter 11 would be a casino. That must be pretty embarrassing. | ||
_sj_ Member Username: _sj_ Post Number: 2242 Registered: 12-2003 |
I don't think it is that rare in the gaming industry. | ||
Viziondetroit Member Username: Viziondetroit Post Number: 1736 Registered: 11-2003 |
Chapter 11 as defined on wiki "A chapter 11 filing, on the other hand, is usually an attempt to stay in business while a bankruptcy court supervises the "reorganization" of the company's contractual and debt obligations. The court can grant complete or partial relief from most of the company's debts and its contracts, so that the company can make a fresh start. Often, if the company's debts exceed its assets, then at the completion of bankruptcy the company's owners (stockholders) all end up with nothing; all their rights and interests are terminated and the company's creditors end up with ownership of the newly reorganized company." | ||
Paulmcall Member Username: Paulmcall Post Number: 1074 Registered: 05-2004 |
Pretty bad when a casino craps out. Let's hope it's just a speed bump on the expansion. | ||
Matt_the_deuce Member Username: Matt_the_deuce Post Number: 817 Registered: 10-2003 |
Doesn't this have something to do with their liquidity ratio? They're required to meet a certain threshold that is pretty high and they've been struggling to meet it. I would guess this is a tactical move on their part considering the unique rules they have to abide by. As stated, they're a profitable enterprise, and I would guess they just need the financing to come through to meet their unique financial obligations. | ||
Gistok Member Username: Gistok Post Number: 6908 Registered: 08-2004 |
I wonder... does the Chapter 11 filing prevent the state gaming commission from forfeiting Greektown's license for not meeting their contractual agreements with the state? | ||
401don Member Username: 401don Post Number: 504 Registered: 11-2007 |
I think the hotel portion of the casino will actually be profitable due to its pricing structure and location as opposed to the other 2 casino hotels, particularly Motor City. | ||
Fastcarsfreedom Member Username: Fastcarsfreedom Post Number: 320 Registered: 11-2005 |
Agree on that point 401don--Greektown has some natural geographical advantages--particular when it comes to capturing overnight and/or business and/or convention trade. MGM's location is acceptable, while MotorCity would seem to be at the greatest disadvatage. Nonetheless, $2 million in profit on $300+ in revenue is miserable--and I'm guessing they aren't seeing the possibility of any significant improvement this year--particularly now with the full impact of the new MGM, the nearly complete work at MotorCity and Windsor and the general stagnation of the market. The short story here appears to be that they were in a worsening liquidity position, were essentially short of money to complete the expansion and were both unable to borrow further and were in jeopardy of having their entire credit with Merrill called in. Some significant challenges lay ahead with such a tiny and apparently fragile profit--that's a deeper issue it would seem directly related to an inability to produce profits from the gaming side of the house. Indeed, non-gaming profits may be realized from the expansion--but the fact remains that the non-gaming side at Greektown will be considerably less significant than any of it's competitors in the D or Windsor. What are the chances of an outright sale at some point? | ||
Lmichigan Member Username: Lmichigan Post Number: 6018 Registered: 10-2003 |
While the Greektown Hotel will actually bring in more money than the other two, the hotels for casinos are afterthoughts when it comes to the business plan. Greektown's problems don't sound so much like not being able to make money as continued terrible mismanagement. | ||
Royce Member Username: Royce Post Number: 2657 Registered: 07-2004 |
What's the latest on the construction of the hotel? | ||
Drankin21 Member Username: Drankin21 Post Number: 262 Registered: 12-2003 |
Their loan was approved recently which will guarantee that the work will be finished on the permanent casino. Not sure when that will be though. |
