Two Way Hard Three | Las Vegas Casino & Design Blog

September 15, 2009

Harrah's Investing in Planet Hollywood Debt

Posted by Hunter

The news that Harrah's had started buying Planet Hollywood debt started fluttering around on Saturday and finally got some major coverage yesterday.

Basically, PHo has been hurting, just like everyone else. I'm sure Harrah's sees an opportunity to potentially pick up a Strip property at a discount, ala Tropicana AC or LV.

Potentially great business decision for Harrah's but I hope this doesn't come to fruition. As others have said, The Strip doesn't need more consolidation - it seems to be healthier and do better with more operators and more competition.

If this does go down, it would be interesting to see if regulators have more pause after the events of the last few years.


Read archived comments (6 so far)
September 15, 2009 9:49 AM Posted by Brian Fey

It seems hard to imagine, with the huge debt load that Harrah's already carries, they'd want to get even deeper in the whole, especially in this current economic environment. The one thing this would give Harrah's is some condo towers. Off the top of my head, they don't really have any offering like that, at any of their many properties in Vegas. I don't even know if you can call that a plus, since the whole condo business has tanked, but that's about all I can come up with.

September 15, 2009 10:24 AM Posted by Mike P.

P-Ho Towers is a timeshare operation, not a condo or condo-hotel, and unless there's some cross ownership that isn't obvious from web sites Westgate and Planet Hollywood resort are separate entities.

I gather that the strategy is to force the operation into Chapter 11 and then take over management, with the property now profitable without all the pesky debt to pay down.

Too bad it has to be Harrah's. I like the poker room and occasionally drop some money in a video poker machine when I get bored or irritated with my crap live poker play. Harrah's is sure to destroy playable video poker if they take over. They probably can't do much damage to the poker room though unless they fire the current dealers.

September 15, 2009 5:24 PM Posted by David McKee

I wonder if Harrah's is taking advantage of a (hypothetical) loophole in a Harry Reid-crafted bill that passed earlier this year. The law grants tax deferments to companies that buy back debt at a distressed rate. At the time it was assumed to mean buying up one's *own* debt ... or can you just go debt-shopping and snap up other companies' assets in lieu of retiring your own debt?

September 15, 2009 5:48 PM Posted by Hunter

Interesting thought. Could very well be. These guys are very good at carving out their little tax loopholes.

September 16, 2009 12:37 PM Posted by David McKee

Just what we need right now -- another M&A spree. Isn't that where things began going off the rails, circa 2004?

October 12, 2009 1:12 AM Posted by adaptateur

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