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Tuesday, Sept. 15, 2009 | 10:59 a.m.
Sun Coverage
Deteriorating financial results at the Planet Hollywood casino resort have forced the property to negotiate with lenders to stay afloat – raising the possibility that the property will file for bankruptcy protection as an alternative to reorganizing debts out of court.
In an opportunistic bet for or against its next-door competitor on the Strip, Harrah's Entertainment, according to sources who declined to be named, has purchased a chunk of Planet Hollywood's $860 million mortgage loan.
The investment might position Harrah's to take over Planet Hollywood if the property enters bankruptcy but could also serve as a passive investment that appreciates in value if the economy rebounds or the property's fortunes improve, according to investment analysts not involved in the deal.
Spokespeople for Harrah's and Planet Hollywood declined comment.
Planet Hollywood defaulted on its mortgage loan in August after the resort's performance worsened over the summer.
The loan came due last year but Planet Hollywood exercised an option to extend the maturity date by a year, to December 9. The loan agreement includes a three year extension option that is subject to the payment of a fee and other requirements, according to a second quarter analysis prepared by Deutsche Bank.
Catering to the young and modern crowd, Planet Hollywood is a one-stop shop for entertainment with its massive shopping mall, slew of restaurants, spacious casino and clubs.
The ambiance of the casino is retro-chic meets high-tech with black granite floors throughout and colorful LED lights throughout the space. The theme carries into the 100,000 square-foot casino with 250 flat screens topping off slot machines. The casino is also home to 87 tables, a sports book and a poker room.
There's also the Miracle Mile Shops, one Vegas' largest malls, with 140 stores including BCBG Max Azaria, bebe, Urban Outfitters and The Discovery Channel Store.
Following an afternoon of shopping, guests can satisfy their appetites at one of the gourmet restaurants in Planet Hollywood, like the non-traditional approach to steakhouses at Strip House or check out the exotic Far East motif at KOI restaurant and lounge. And if guests are still looking for more, they can spend the after hours at Privé, Triq or Krave nightclubs.
Perhaps one of the resorts biggest attractions came in March with the addition of "Peepshow." The naughty twist on the story of Little Bo Peep is modern-day spin on the run-of-the-mill Vegas topless review. The "Peepshow" stage has seen visiting celebs like Scary Spice Mel B, "Dancing with the Stars" Kelly Monaco and Playboy's Holly Madison.
You have to be kidding me ?? Planet Hollywood now. If PH defaults that just may mean that they will be a part of the Harrahs brandname.? Make it stop,, Harrahs has ruined every thing that they have bought, The buy, cut back ,run it into the ground , then market it to low end gamblers COME ON ! Look at what happened to Rio, Caesars, Paris ect... they are not able to upkeep what they have now .. Here comes 6/5 black jack, tighter machines and poor customer service (if they end up with PH).. please do not let this property be a part of the this... SUPPORT and gsmble at PH to prevent another fine casino going into the crapper ! ( let me guess,, Gary will want $ 150 million in salary next year if it happend )
As a person that comes to Vegas at least once a month, I always stay at the Flamingo. I find the casino people to be warm and friendly. The only change I have noticed is an increase in time getting my room service order.
I assume all the workers at Harrah's are impressed with this addition. They get a new hotel and the right to hire who they want as they close another and lay off the trouble makers.
I work for a Harrah's property and have found them to be an excellent employer to work for. I think the people that talk negative about Harrah's are either former employees that got fired or gambles there and loses lots of money because of their compulsiveness. Bottom line is, if you don't do a good job you will get fired no matter where you work and if you gamble the chances of winning are the same anywhere you play!!! I can tell you that Harrah's prides itself on its customer service.
one way or another, this resort is doomed. it lost a TON of money when prive' was closed, there's last week's story about employees cheating at poker, and it doesn't have the deep pockets or synergy to get it through these tough times.
harrah's essentially owns it now. when you buy THAT much debt...you get to call the shots.
it's too bad. even back when it was the aladdin, it was one of my favorites. it had a GREAT buffet ( you can kiss that goodbye ) and a shopping mall with stores you didn't find at every other mall in town.
it's ashame. this is a step in the wrong direction for vegas. we need MORE competition, not less. it's basically just two companies competing against each other. mgm vs. harrah's and wynn vs. sands.
they all have the same malls, same clubs, same machines and games, etc.
PH is too big to make it through these rough times. Too much debt and too much noise. No matter whether it's under the control of Harrah's (a company already overloaded with debt) or some other company. once the CitiCenter with its adjacent casinos is open, things will get even tougher. Good luck, investors.
How do you spell MONOPOLY?. I guess there goes the neighborhood. Competitive rates, better service - HAH!! forget it.
MONOPOLY? hmmmm last time i checked MGM had far more properties on the strip than harrah's, not including the behemoth that is to be city center.
SMB:
And two means fair and open competition? Puleez
We always come back to the mile of stores when we come to Las Vegas. Just love the sky scenes, fountain, and Mexican cantina. Hope they keep it all!
Denver21
Agreed. Lots of Harrah's bashing goes on here. Short term memories abound - When Binion's Horseshoe was forced to close - who stepped in and saved jobs... Harrah's. Yes they held some bonds on the property and did get the rights to the WSOP and the Horseshoe name in Nevada out of the deal. But they did step in when they did not have to.
Lots of businesses were blind sided by the recession. Harrah's took steps to stay afloat, making some very tough decisions. If they sat back and did nothing there would be more unemployment in Las Vegas and they would be financially in far worse shape.
With Harrah's taking the steps that they have in the last couple of days most likely spells a rebound in the future. I would consider this a very positive sign for Las Vegas.
I don't think PHo owns the mall, so there won't ba any differences there. I haven't seen any different slots or better table game payouts at PHo compared to Harrah's, so I don't expect to notice any difference.
Maybe Harrah's should by MGM stock, since it's in the toilet. Maybe they could make once big cr@ppy casino together.
GOD HOW VEGAS DIES MORE AND MORE EACH DAY!!! IM SO SORRY BUGSY FOR WHAT THEY HAVE DONE TO YOUR CITY! THEY KNOW NOT,WHAT THEY DO...........
For all you Harrah's haters...
What would you rather have, another casino going bankrupt bringing more bad news for Vegas...or at least a chance to keep PH afloat. Come on. And yes MGM owns way more than Harrahs. I personally like the Harrah's casinos. They dealers are very friendly and fun. The service is great. Anything to keep Vegas out of the negative national news stream is great with me.
PH does not "run" the mall, but the more generic they make the casino, the more generic the stores will become.
I'd rather have a bunch of 500 room hotels with casinos trying to fight each other tooth and nail with comps and cash. But we ended up getting than Two humongous mega-corps: jacking up prices of buffets, placing over-priced bottle service in clubs, while giving little if anything to those people that use their players club card.
Harrah's has always been very good to me. We stay at Bally's & The Paris every couple months & some of their other properties too. Total rewards is great! I also love Planet Hollywood. It's nice to have options. Things will work out. They almost always do.
Harrahs and MGM Mirage should give players the option to buy stock with players card points. At least we player's would have a real stake in these joints beyond woo-woo reward points!
Good idea by In2wishin
That give players more incentive to play at their casinos because you own little piece of the joint.
I just got back from Vegas, 17 people in my party, not one winner in the bunch at Harrah's, had two birthdays (one just turned 21 out there) no happy birthday nothing. Went down town we all had a blast, free food and drinks for the birthday girls. Harrah's gets no more of my money...
How terribly sad. Harrahs really has ruined Las Vegas. And MGM is right behind. I totally avoid the Harrahs and MGM properties. I don't know if they are a good employer or not but they are the worst at delivering a positive Las Vegas experience. Maybe they can introduce 6:5 blackjack at PH? That ought to bring in more people! Saving money by laying off the cocktail waitresses should bring in more gamblers. What a bad monopoly. Truly bad for Vegas. Wynn, Venetian, Palms, Hard Rock, please don't ever join the two monopolies....
This is not the first time that Harrah's has bought PH debt. Arthur Goldberg (then CEO of Park Place) was buying Aladdin debt with the assumption that it would go bust and have the ability to roll the property into the Park Place portfolio (Caesars, Bally's Paris). Harrah's gobbled up Park Place and now years later seems to be making a play for the PH as its former affiliated company did when it was the Aladdin. Interesting move.
Seven Dollar domestic beers in the Harrah's and MGM properties. And you wonder why tourism is down. Top that with tight machines and lousy table odds, who wants to come to this town?
We are doomed.
I can't really complain about Harrah's. When I visit town I stay for free. I eat cheap, I can visit several casinos, and I can win. While it isn't quite the warm atmosphere the old school joints were, it's better than most other casinos.