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Las Vegas Sands closes $6.4 billion sale of Venetian to Apollo, Vici

Updated February 23, 2022 - 1:30 pm

The Venetian, Palazzo and The Venetian Expo officially have new owners.

The $6.4 billion sale of those Strip properties by Las Vegas Sands Corp. was completed Wednesday.

Sands, Apollo Global Management Inc. and Vici Properties Inc. announced the massive deal in March 2021. Under terms of the deal, Apollo is paying $1.05 billion in cash and $1.2 billion in seller financing in the form of a term loan credit and security agreement. New York-based Vici, a real estate investment trust affiliated with Caesars Entertainment Inc., is paying $4 billion in the transaction.

Vici acquired the resort’s land as a real estate investment trust, while Apollo purchased the property’s cash flow and operations. Apollo will pay Vici rent under terms of the deal.

The deal officially closed when stock markets ended trading Wednesday.

Apollo executives told regulators last week that entertainment will be a key focus of emphasis for the new owners and that the company is excited to step into the partnership with Madison Square Garden Entertainment Corp. on the development of the $1.9 billion, 17,500-seat MSG Sphere at The Venetian being built just east of The Venetian Expo.

“I think the MSG Sphere is going to change the landscape, certainly of the north end of the Strip, considerably,” said George Markantonis, CEO of the new Apollo subsidiary operating the property. “It will be a huge benefit for our resort, too.”

The venue is expected to open next year.

Markantonis noted that the property also has four other theaters. “And we have a tower that is partially finished, and we have multiple other spaces, some designated for food-and-beverage opportunities. And we will be looking at all of these to continue to upgrade the amenities we can offer our guests and make sure we are extremely competitive across the country in this niche market,” he said.

Tower plans, new relationships

The 43-story unfinished tower — known as the St. Regis tower — was once envisioned for condominium sales. Regulators were told and Markantonis confirmed the tower is still a work in progress and that Apollo hasn’t yet determined how it would be used in the future.

Markantonis also indicated that some past contentious relationships would smooth out under the new ownership.

He said The Venetian would work with the Las Vegas Convention and Visitors Authority and the Nevada Resort Association in the future and that employees would determine whether to build a relationship with the Culinary union. Under Las Vegas Sands, The Venetian complex was a Strip outlier: the Culinary never unionized the workforce. And company leadership saw the LVCVA, which operates the Las Vegas Convention Center, as publicly funded competition for private conference business.

“We do not have any contentious relationships with any of those entities,” Markantonis said. “In fact, we fully support them and respect the contribution they make to our city, and I assure you that the relationship continues. We’re big supporters of the LVCVA and the NRA. Decisions about unions are made by the team members that work on this property. We don’t interfere and don’t have set policies for or against anything. We support our team members.”

Apollo cleared one of its last hurdles to complete the transaction Feb. 17 when the Nevada Gaming Commission, acting on a recommendation from the Nevada Gaming Control Board, approved licensing for Apollo to operate the 225,000 square feet of casino space and the 7,100 guest suites.

Caesars history

In testimony in the Feb. 2 Control Board meeting and the Feb. 17 commission meeting, regulators focused on Apollo’s previous Las Vegas casino operations as owner of Caesars Entertainment Inc. properties and on the relationship Apollo founder and former CEO Leon Black has with the company.

Regulators were not concerned about Apollo’s experience with Caesars, which filed for Chapter 11 bankruptcy protection shortly after the acquisition in 2008, as the Great Recession was taking hold.

Apollo eventually exited the market, clearing the way for the current Caesars ownership group, headed by the Carano family of Reno and its Eldorado Resorts group, to take over.

As for Black, regulators were satisfied that he will have no dealings with Apollo in the future.

Black resigned as CEO nearly a year ago after it was disclosed he had associations with convicted sex offender Jeffrey Epstein. While Black still holds an 11.9 percent interest in Apollo, he has no controlling interest in the company and regulators concurred that Black’s association with the company was not a problem.

Gaming commissioners added a condition to their approval that the Nevada Gaming Control Board and the commission be notified if Black attempts to nominate himself or an associate to Apollo’s board of directors. David Sambur, Apollo partner and co-head of private equity, said Black has indicated he has no plans to return to Apollo’s leadership. Regulators would have the ability to call him forward for questioning if he did.

As for Las Vegas Sands, the company, in a release issued Wednesday, reiterated its plans to focus on its Macao and Singapore properties.

“The opening of The Venetian more than 20 years ago represents the beginning of the company’s success,” said Sands Chairman and CEO Robert Goldstein. “The property, and most importantly, the people who represent it every day will always remain indelible parts of our history. Looking forward from the sale, we believe our strong balance sheet and an industry-leading portfolio of integrated resorts in Macao and Singapore position the company to experience a new era of opportunity and growth.”

Sands reinvesting in Asia

Sands Chairman and CEO Robert Goldstein said the company’s top priority would be to reinvest in the Asia portfolio. The company also plans to execute a long-term strategy for the digital marketplace while pursuing new domestic investments in the United States, with prospects in New York, Florida and Texas.

“Our commitment to long-term investment in Asia is highlighted by the recently announced $1 billion reinvestment at Marina Bay Sands in Singapore and the completion of the $2.2 billion renovation of The Londoner, and we will continue to place a premium on growing our industry-leading resorts in Asia,” said Patrick Dumont, the company’s president and chief operating officer.

Dumont said Sands would maintain its corporate headquarters in Las Vegas and will remain active in the community.

“The foundation of this company was built in Las Vegas, and even though the overall size of the organization here will be smaller, it is important to each of us that we continue to strongly support our community,” he said.

Goldstein said he believes in the future of The Venetian and Las Vegas in general.

“Las Vegas is continually evolving and is always able to rebound from challenging events like the pandemic and the global financial crisis,” Goldstein said. “We have no doubt its importance as an international leisure and business tourism destination will only grow in the future as the city continues to innovate and introduce additional attractions and experiences for its visitors.”

Markantonis said Apollo would continue to grow the legacy created by former Sands Chairman and CEO Sheldon Adelson and his family. Sheldon Adelson, who founded Las Vegas Sands and whose vision guided the development of the Strip integrated resort complex and resulting convention focus, died in January 2021.

“Mr. Sheldon Adelson and Dr. Miriam Adelson have left an amazing legacy at these properties and in this town,” Markantonis said. “Apollo was well aware of that when they purchased this asset. It is our intention to continue to grow it and ensure that it stays and has its proper place in our community.”

Las Vegas Sands shares, traded on the New York Stock Exchange, fell 27 cents, 0.6 percent, to $45.15 a share in light-volume trading Wednesday. Apollo shares, also traded on the New York Stock Exchange with light trading Wednesday, were down $1.10, 1.7 percent, to $62.10 a share. Both issues slipped further after hours.

The Review-Journal is owned by the family of Dr. Miriam Adelson, the majority shareholder of Las Vegas Sands Corp.

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.

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