Park Place reassures investors over Dion show, Colosseum

Thursday, May 23, 2002 | 11:16 a.m.

Park Place Entertainment Corp. Chief Executive Thomas Gallagher promised investors Wednesday that the Caesars Palace Colosseum project, a replica of the famed Colosseum in Rome and the new home of music diva Celine Dion, will prove a "category killer" for the Las Vegas entertainment scene.

"This will be the finest facility in Las Vegas" and "bring a new group of people to Las Vegas," Gallagher said at the company's annual shareholder meeting, held at the company's Paris Las Vegas hotel-casino near Caesars on the Las Vegas Strip.

The 4,000-seat venue will open in March with a "stage spectacular" featuring Dion and a cast of 70 dancers, musicians and other artists, executives announced Wednesday.

The engagement will run for at least three years, with 200 performances each year. Other performances and events for the remainder of the year have yet to be determined.

"There will be an opportunity for a number of single-date events, whether they be music, theater, comedy or all of the above," Park Place spokesman Robert Stewart said.

Landing the megastar doesn't present a financial risk, Gallagher reassured investors Wednesday. Park Place, which owns Caesars Palace along with the Paris, Bally's, Flamingo and Hilton properties in Las Vegas, will spend $95 million to build the Colosseum but will not incur any of the show's entertainment or promotion expenses, he said.

The event is a collaboration of entertainment producers Concerts West Ltd.; producer Franco Dragone's company DRAGONE; and CDA Productions, run by Dion and her husband, Rene Angelil. Concerts West is a unit of the Anschutz Corp., which owns or controls a collection of entertainment centers and sports franchises, including the Staples Center in Los Angeles and the Los Angeles Kings hockey team.

A call to Concerts West's Los Angeles office was not returned by press time. It was not clear Wednesday how Dion, her company and the other production teams would be paid for the engagement. Tickets for the show go on sale today and are priced at $87.50 up to $150.

In the meantime, Park Place's cash flow -- a strong indicator of a gaming company's ability to pay down debts incurred in launching expensive construction and remodeling projects -- declined about 13 percent in 2001. The company's Las Vegas properties suffered in the aftermath of Sept. 11, which drove down air travel. Still, fourth quarter cash flows in Atlantic City and Park Place's mid-South region were higher compared to a year ago. Reducing debt and controlling costs will be a major focus this year, Gallagher said.

The Colosseum will pay off for Park Place as a long-term upgrade, especially given its proximity to other company properties clustered off the Strip at Flamingo Road, Gallagher said. Other upgrades are in progress. A new restaurant, sidewalk cafe and nightclub will debut at Paris Las Vegas in March. Another attraction is under way at the Flamingo, he said, declining to reveal details.

The planned addition of a 35-story, 800-room hotel tower at Caesars Palace has been put on hold. Several retail projects are under way across the company, however. They include construction of retail and meeting space connecting Bally's in Atlantic City with the Claridge Hotel Casino, a bridge that will connect Caesars Atlantic City with a retail complex and the expansion of the upscale Forum Shops at Caesars mall.

The company's investment in high-end entertainment and shopping reflects recent demand, Gallagher said. A decade ago 65 percent of tourists came to Las Vegas to gamble and the rest came primarily for other entertainment. Now it's the other way around, he said.