$27M Surprise Bonuses Go to Cosmopolitan Las Vegas Employees

The Cosmopolitan of Las Vegas seems to have it all figured out when it comes to branding. Keeping in line with a series of donations amounting to more than $9 million throughout the last seven years, the company had a surprise for its members of staff during an employee appreciation and awards buffet. All of this coming in the face of an operations sale to MGM Resorts.

Cosmopolitan’s Story of Generosity

Resort president and CEO Bill McBeath announced the $27 million surprise to its 5,400 staff – a $5,000-bonus to everyone. This is not the first time the company has been this generous. Over the past seven years, there have been multiple donations worth north of $9 million.

Some of them cover local charities, among the beneficiaries of which are the Las Vegas Metropolitan Police Department Foundation and Boys & Girls Club of Southern Nevada. Other initiatives cover inclusive partnerships – like the one with KultureCity – to accept and cater to individuals with sensory needs.

Sale in the Offing

All of this happens in the face of a nearing sale to MGM Resorts. The current operator of The Cosmopolitan Blackstone bought it from Deutsche Bank for $1.73 billion during a fire sale back in 2014. It has made previous attempts to flip it but never got the right price for it, asking for more than $5 billion in the past.

Now the right price was $1.625 billion for the operations and The Cosmopolitan will start presumably making money for MGM Resorts. It’s not a coincidence that The Cosmopolitan is situated between two other MGM-owed Strip properties – the Bellagio and the City Center complex.

Blackstone will continue making money in Nevada

Since only the operations are changing hands, Blackstone will still be owning the land through its Blackstone Real Estate Investment Trust (REIT). REIT will be retaining 80% ownership in Cosmopolitan’s 8.7-acre land. That means they’ll be getting $200 million of annual rent from MGM – nothing to sneeze at. Since operations are changing hands, McBeath will step down as the top executive for The Cosmopolitan but will remain with Blackstone.

Future focus

Blackstone is looking at a $6.5 billion purchase of Crown Resorts – the biggest Australian gaming operator. Crown resorts have had their own problems in the past but that has only slowed down Blackstone instead of turning them off. The Australian operator has seemingly turned a corner though, so all that’s left for the deal to close is most likely just some further approvals by the Australian regulators. That is expected to take at least a further week since the bidder needs approval in each state the Crown operates in. The all-cash deal is looking to be fetching Crown shareholders A$13.10/share.

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