Tuesday, July 28, 2009

Did Danny Gans' death hurt Steve Wynn's bottom line?

How did the drug overdose death of Wynn Encore Hotel & Casino headliner Danny Gans impact the bottom line for his boss Steve Wynn? We'll find out later this week when Wynn Resorts Ltd. reports its second-quarter financial results after the market closes Thursday.

Gans was three months into a longterm, multi-year, multi-million dollar contract at the Encore Theatre when he died suddenly and mysteriously in his bedroom smack in the middle of the second quarter on May 1st.

Wynn Resorts, run by billionaire and major stockholder Steve Wynn, operates casino resorts in Las Vegas and the Chinese island gambling enclave of Macau and has a resort under construction in Macau.

The $700 million Encore at Wynn Macau, due to open next year, is expected to include 600 rooms and suites along with casino, restaurant, retail and lounge space.

A subsidiary of Wynn Resorts Ltd. filed for a possible initial public offering of its Macau assets last week. The action did not come as a surprise to industry analysts.

These analysts expect Wynn Resorts to lose a penny per share on $739 million in revenues, compared with a profit of $1.11 per share on revenue of $825 million in the same period a year earlier.

Gans' death certainly did not help the Wynn Las Vegas operation, which is being propped up by the Chinese business. All casino corporations in Las Vegas are expected to have a rough year, even though many have lowered room rates to keep their hotels filled.

New hotels coming to Las Vegas in the next year will hurt everyone's revenues and earnings.

Wynn Resorts’ stock price has dropped from its 52-week high of $119.74 and closed the second quarter at $35.30.

Gans' showroom at the Encore has remained empty most of the time since his death. Though the local news media refused to investigate the circumstances of his untimely demise at age 52, publish what it knew about his use of painkillers and steroids, or speak to the many sources who claimed the musical impressionist was getting illegal prescription drugs from within his organization, most everyone in the beholden Vegas fourth estate is helping promote New York Times stringer, Gay Vegas author and comp queen Steve Friess's 3 pm "Michael Jackson’s Untimely Death Was The Best Thing That Could Ever Have Happened To Michael Jackson's Music Birthday Tribute But Not To The Man Show" set for August 29th at the Palms.

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