Live entertainment companies and entertainment personalities can earn millions in annual revenue in Las Vegas, where the market is worth $150 billion, according to the most recent financials released by Las Vegas Sands.
The deal will make the Las Vegas-based company the biggest live entertainment company in the world, eclipsing Walt Disney, which has a $130 billion deal to own and operate the world’s largest theme park.
But even if the deal is finalized, the deal will likely only cover entertainment services and not entertainment revenue for the full year.
Sands and Wynn Cos.
have a 20-year agreement to share profits with Wynn, which will pay the Las Vegas company $50 million per year for a period of 10 years.
The deal will be structured to ensure that Wynn will make money at the same rate as Sands, which currently makes money by charging more for entertainment.
“The Wynn partnership is a great example of how entertainment can support an entire economy,” said David R. Katz, an analyst with Forrester Research.
In terms of entertainment revenues, Wynn has revenue of $10.5 billion, including about $6.5 million in Las VEGAS, and $1.9 billion from other businesses in Las Vega.
Wynn’s entertainment businesses include Las Vegas’ main amphitheater, Wynnevita, the largest concert venue in the country, and the Mandalay Bay Resort and Casino, which includes a hotel, restaurants, and other entertainment venues.
Wynn’s revenue is expected to rise 5% to $7.5 trillion in 2019 from $6 trillion in 2018, according the most recently available projections from the S&P Global Market Intelligence.
Wynnevia, a subsidiary of Wynn that includes Wynn Resorts, Wynnesource and the Wynn Group, reported a revenue of about $1 billion in 2019.
While Wynn is the largest entertainment company, its revenues come from several other businesses.
Wynnessource: Las Vegas Review-Journal The Wynns deal comes as a major change in the Las Vegas market, where Wynn now makes up about a quarter of the industry.
With Wynn having a monopoly on Las Vegas entertainment, the company will be able to take a bigger share of the pie, said Jeffrey Fitch, president of The Ritz-Carlton Resort and Convention Center.
Las Vegas Sands, however, has a larger portfolio of properties and has been growing at a faster pace than Wynn.
For example, Sands generated more than $10 billion in operating profits in 2019, and it made a net $1,700 million from Las Vegas hotels and restaurants last year, according a financial report released by Sands.
A year ago, the Sands and Wynnes deal would have required Wynn to buy up about 40% of Las Vegas resorts, which would have caused the Wynnes to lose some of its revenue.
However, that would have been a very risky move for Wynn given that it has already had trouble selling resorts, Fitch said.
Even if Wynn completes the deal, it would not affect Wynn operations, according Dan DiMartino, a Sands spokesman.
If Wynn doesn’t buy up Las Vegas properties, Wynns revenue from Las Vagueas entertainment businesses would still be split between Wynn and the Sands, DiMartinos said.
The $150-million-per-year deal is the most lucrative deal in Las Vengas history, according to Forbes magazine.
At the time of the deal’s announcement in April, Wynndos stock was trading at $10,800 per share.
Wynndo shares rose $3.7, or nearly 2%, to $14,865 per share in after-hours trading.
Bettman analyst Adam Pinto noted that the deal would allow Wynn “to diversify their business base in order to stay relevant.”
“It’s a good deal for Wynndoes shareholders and the entertainment industry,” he said.
“It allows Wynnto retain its core brand while giving Wynn more room to diversify into new business areas,” he added.