Las Vegas Review Journal is reporting that Boyd Gaming has agreed to sell South Coast to Michael Gaughan, former Coast Casino owner. Gaughan, who is leaving Boyd to operate South Coast, sold Coast Casinos to Boyd two years ago and, from what I understand, still called the shots at the Coast properties. I can’t help but wonder what this move will mean for the other Coast properties.
Update: Las Vegas Business Press provides additional details.
Wow, that’s a shock that they would unload it so quickly. I had thought the idea was to ride out the losses until that area became more developed, at which point its fortunes would change.
I was surprised too, but Boyd surely wants to bulk up its books to finance Echelon construction, which begins next year.
Good point.
I was always under the impression that the Barbary Coast was Michael Gaughan’s baby because that’s where he started. He’s obviously moved on. He was touring the place one time when I was staying there. Dressed like a cowboy and had about ten ass-kissers following him around. He seemed to get what he wanted. The staff seemed to like him.
I’ve never been to South Coast. Any reports on it?
Can you imagine running a casino with no debt.
Based upon the report, even though it says he must pay 75% in cash, Gaughan should be able to pay for the entire purchase from the dispositon of the Boyd stock, assuming that he isn’t paying much more than book value.
So the property will have a value of 575 million dollars and no debt. Income will be pure EBITDA which has to be postiive.
And he gets to be the boss. What a dream life.
Dan
Mike,
I went to South Coast about a month after it opened and I liked it. I thought it was really well laid out, the tables and machines weren’t piled on top of each other, so there wasn’t the claustrophobia factor. Obviously, it was very clean because it hadn’t had a chance to get dirty
Most importantly, I won $50 and my cocktail waitress looked like Heather Graham.
It sounds like a nice place. I like Heather Graham.
Dan Short must be an accountant or finance guy; great point Dan!
I’d have to imagine most of the casinos are debt financed. Having a debt free business makes it a lot easier to survive the lean times.
I heard a rumor that Tim owns the entire FHBM organization on a debt free basis also….he is the Michael Gaughn of the podcasters.