Farewell. The Flying Pig Has Left The Building.

Steve Hynd, August 16, 2012

After four years on the Typepad site, eight years total blogging, Newshoggers is closing it's doors today. We've been coasting the last year or so, with many of us moving on to bigger projects (Hey, Eric!) or simply running out of blogging enthusiasm, and it's time to give the old flying pig a rest.

We've done okay over those eight years, although never being quite PC enough to gain wider acceptance from the partisan "party right or wrong" crowds. We like to think we moved political conversations a little, on the ever-present wish to rush to war with Iran, on the need for a real Left that isn't licking corporatist Dem boots every cycle, on America's foreign misadventures in Afghanistan and Iraq. We like to think we made a small difference while writing under that flying pig banner. We did pretty good for a bunch with no ties to big-party apparatuses or think tanks.

Those eight years of blogging will still exist. Because we're ending this typepad account, we've been archiving the typepad blog here. And the original blogger archive is still here. There will still be new content from the old 'hoggers crew too. Ron writes for The Moderate Voice, I post at The Agonist and Eric Martin's lucid foreign policy thoughts can be read at Democracy Arsenal.

I'd like to thank all our regular commenters, readers and the other bloggers who regularly linked to our posts over the years to agree or disagree. You all made writing for 'hoggers an amazingly fun and stimulating experience.

Thank you very much.

Note: This is an archive copy of Newshoggers. Most of the pictures are gone but the words are all here. There may be some occasional new content, John may do some posts and Ron will cross post some of his contributions to The Moderate Voice so check back.


----------------------------------------------------------------------------------------------------

Thursday, January 21, 2010

Update on Pittsburgh Casino fixed costs

By Dave Anderson:

Last week, I wrote a piece that argued the Pittsburgh Rivers Casino was barely covering their fixed costs given current and proportionally projected revenues for the first full year of operations.  I wrote that 95% of their current and projected gross terminal revenue (GTR) was going to either debt service,  arena bond payments and local property taxes.  

The casino has construction bond payments of $55 million dollars
this year and $75 million dollars next year.  The casino has also
committed to a $7.5 million dollar payment for the Penguins arena, and
now it has a $6 million dollar property tax bill.  For the first
operating year, it has ~$69 million dollars in fixed costs that must be
paid before the electrical bill or the first hour of wages is covered. 
The fixed costs alone consume $154 million dollars in gross terminal
revenue.Just doing a straight line approximation of current
revenue, the casino is projected to make approximately $162 million
dollars in gross terminal revenue in its first full year of operation. 
If this approximation is even remotely close to accurate, fixed
expenses consume close to 95% of all revenue generated by the casino.

I was wrong and made an error in the law.

The situation is worse than I thought it was.  I had attributed a 2% host municipality tax in my calculation as well as a 2% host county tax on gross terminal revenue.  This 4% of GTR was part of the 55% GTR tax rate that I took off the top of the revenue. 

Chris Briem went through the law and the data and there is a provision for the host municipality and host county tax structures:

The law covering all this says that the city will get either 2% of the
gross revenues generated at the casino or $10 million per year...
whichever is greater.  So the city will be getting it's $10 million no
matter....

This shortfall is going to be replicated with the county as well....

So let me revise my former estimates.  The casino owes $55 million for construction bonds, $7.5 million for the Penguins Arena bonds, and $6 million for municipal, school and county property taxes.  Using the previous 55% GTR rate, the casino needs to still generate $154 million in GTR to cover fixed costs.  However the casino needs to come up with an additional $12.4 million host municipality/county tax payments.  That eats up another $27 million dollars in GTR.  Fixed costs will consume roughly $181 million dollars in GTR.  

$181 million dollars is significantly more in fixed costs than projected gaming operating revenue for the first year of operations.

Games can be played with cash flow and shifting payments to the future, but those games can only take the casino so far before bankruptcy is the most plausible option. 



Posted by at
Labels:

No comments:

Post a Comment

Subscribe to: Post Comments (Atom)