Tribe buys Hard Rock Cafe
MIAMI — The Seminole Tribe of Florida said Thursday it was buying the famed Hard Rock business, including its casinos, restaurants, hotels and huge collection of rock ‘n’ roll memorabilia, in a groundbreaking $965 million deal with a British company.
The deal with London-based Rank Group PLC is believed to be an American Indian tribe’s first purchase of a major international corporation of its size, the Seminoles said. It includes 124 Hard Rock Cafes, four Hard Rock Hotels, two Hard Rock Casino Hotels, two Hard Rock Live! concert venues and stakes in three unbranded hotels.
The Seminoles were the first U.S. tribe to get into the gambling business in 1979. More recently, they had partnered with Hard Rock in successful hotel, gambling and entertainment complexes in Tampa and Hollywood in tourist-friendly Florida. They now have the ability to expand their gaming interests nationally by partnering with a well-known brand, experts said.
The tribe also will acquire what is said to be the world’s largest collection of rock memorabilia, some 70,000 pieces including Jimi Hendrix’s Flying V guitar, one of Madonna’s bustiers, a pair of Elton John’s high-heeled shoes and guitars formerly owned by Bob Dylan, Eric Clapton and Chuck Berry.
The deal does not include Hard Rock’s Las Vegas casino, however, which is owned by Morgans Hotel Group, or Morgans’ rights to Hard Rock intellectual property in Australia, Brazil, Israel, Venezuela and many areas of the United States west of the Mississippi River, a Morgans official said.
Rank said the sale freed it to concentrate on gambling. It retained the Hard Rock Casino in London and plans to change it to the Rank Gaming brand.
“Hard Rock is a very strong brand,” said Jeffrey Harwood, an analyst with Oriel Securities in London. “It needs further capital to be injected in the business into expanding it, which is one of the reasons Rank decided to sell.”
At a Thursday news conference in New York that began with a blessing from a tribal representative, tribe Vice Chairman Max Osceola compared the sale to when American Indians sold Manhattan to the Dutch for “trinkets.”
“We’re going to buy Manhattan back one hamburger at a time,” Osceola said.
Hard Rock International President and Chief Executive Hamish Dodds gave Osceola a guitar that belonged to Hank Williams Sr.
“This is a proud moment for the Seminole Tribe of Florida and for all Indian tribes,” said Mitchell Cypress, chairman of the elected Tribal Council. “It is also an opportunity for the Seminole Tribe to diversify its business operations and help a very successful company to achieve even greater growth.”
The Seminoles tribe has about 3,300 members living on and off Florida reservations and all of them receive payments due to the success of casinos. They are pacesetters in the growing world of Indian gaming.
U.S. tribes now have more than $22 billion in annual revenues from gambling, according to government figures.
In addition to its two Seminole Hard Rock hotels & casinos, the Seminole Tribe owns and operates five other casinos in Florida. More than 90 percent of the tribe’s budget now comes from gaming revenue.
The deal also follows a national trend of tribal casinos teaming with large corporations or going to other states to expand their reach. For example, the Mashantucket Pequot tribe, which operates Foxwoods Resort Casino in Connecticut, earlier this year said it was leasing the MGM Grand name from MGM Mirage. A $700 million hotel and casino expansion will be called the MGM Grand but will be operated by Foxwoods employees.