October 15, 2019
TI owner Phil Ruffin is the new ringmaster of Circus Circus.
MGM Resorts International on Tuesday announced the sale of the family-friendly property to the owner of TI for $825 million. The transaction is expected to close by the end of the year, and includes the 5-acre Adventuredome amusement park, a 10-acre RV park and 37-acre festival grounds.
The Las Vegas Review-Journal reported on the sale last month, after sources revealed that Ruffin and MGM had reached a handshake agreement on Sept. 12 for Ruffin to buy the hotel-casino, along with the Las Vegas Festival Grounds parcel. The multi-use entertainment venue sits on the southwest corner of Las Vegas Boulevard and Sahara Avenue.
MGM CEO Jim Murren told the Review-Journal that Circus Circus was “not strategic to our long-term vision” and that Ruffin “has some ambitious plans” for the north Strip resort, though he did not specify what the new owner has in mind.
Asked what will happen to the resort’s employees, Murren said they “will become employees of Mr. Ruffin.”
According to the Tuesday statement, the sale is part of MGM’s “asset-light strategy” meant to maximize value for shareholders.
“MGM Resorts has engaged in an exhaustive process to evaluate its owned real estate,” Murren said in the release. “The Company expects to utilize the proceeds from this transaction to enhance its capital allocation strategy and complement its strategic and operational flexibility.”
This isn’t Ruffin’s first purchase from MGM. In December 2008, he made a deal to buy TI — then known as Treasure Island — from the company for $775 million. His purchase of Circus Circus is set to comprise $662.5 million paid in cash and a $162.5 million note due 2024, according to the statement.
“Circus Circus has anchored the north end of the Las Vegas Strip for over 50 years, and I am excited to add it to my casino portfolio,” Ruffin said in the statement. “I have tremendous respect for Jim Murren and the MGM team, and my relationship with them goes back to my friendship with Kirk Kerkorian and continues to this day.”
The property has been a gold mine for MGM over the years. Between 2015 and 2017, it posted the fastest percentage growth in average daily room rate and cash flow among MGM’s Strip resort properties. It made about $65.9 million in net revenue last quarter. According to the statement from MGM, Circus Circus reported a cash flow of $62 million for the 12 months ending June 30.
The 3,767-room property sits on a plot of about 60 acres near Sahara Avenue on the north side of the Strip, near ongoing projects including Resorts World, the Drew Las Vegas and the Las Vegas Convention Center. It’s known for its indoor Adventuredome amusement park and 10-acre RV lot, the only one of its kind on the Strip.