The Financial Times has a frightening piece online indicating that Texas Pacific Group, one of the private equity firms that own Harrah's Entertainment, has been buying up the debt of the Palms. The piece relies on anonymous sources, albeit more than one, and notes that "the investment points toward a systematic strategy by Harrah’s to acquire other casinos through their distressed debt."You know, like how Harrah's just took over Planet Hollywood. Cue scary music.
The report indicates that the Palms is taking a massive hit from the recession and that "the Palms Place condo-hotel launched in 2008 is a poster child for the recent wave of overambitious casino projects as it had only leased one-third of its condo-hotel units by late 2009."
And this:
"Harrah’s might take a more utilitarian approach with Palms and Planet Hollywood, by toning down some of the glitz and boosting appeal to middle market customers. Then the idea would be to feed those customers to other properties in the Harrah’s portfolio."
Now, I'm no Harrah's basher. They do what they do quite well. But come on, Mr. Loveman, not the Palms. No. Please no. It is a special, unique entity operated by a rare owner-operator (George Maloof) who does not have any evident ambition to take over Asia or Pennsylvania or the Republican Party. He just wants to make his one place a cool, fun place to be. That's all. Is that so wrong?
I've got a call in to George Maloof. I'm hoping he can clarify. A top Harrah's executive source of mine said he/she hasn't heard anything at all and this was one of the first to know about the Planet Hollywood deal. So who knows. But the whole idea just makes me break out in hives.
