Seminoles seal the deal for Hard Rock
The tribe pays $965-million for 68 cafes.
By STEVE HUETTEL
Published March 6, 2007
HOLLYWOOD, Fla. - With prayers, traditional music and more than a few jokes about their past poverty, members of the Seminole Tribe of Florida celebrated closing the purchase of Hard Rock International on Monday .
The $965-million deal with the Rank Group of Great Britain gives the tribe ownership of the internationally known Hard Rock brand, 68 Hard Rock Cafes and the world's largest collection of authentic music memorabilia. It also includes licensing and franchise contracts for 56 more restaurants and five hotels.
Seminole leaders called the purchase, believed to be the first of a major international corporation by an American Indian tribe, a breakthrough for Native Americans everywhere.
"Now, the mainstream business world knows you can do business with native tribes and make a profit," said Max Osceola, a member of the Seminole tribal council.
Institutional investors signed up for more than six times the value of $500-million in seven-year bonds that will be issued help finance the deal, said Jim Allen, chief executive of Seminole Gaming. "This shows the financial community believes in the tribe, believes in this brand," he said. The tribe is paying cash for the rest of purchase.
In 1979, the Seminoles opened the nation's first high-stakes bingo hall on tribal land in Hollywood after winning a legal challenge from the state, which claimed the games violated Florida law. That opened the door for tribes nationwide to open casinos, spawning a gaming industry that generated $22-billion in revenue last year.
The Seminoles operate seven casinos in Florida, including two Seminole Hard Rock Hotels & Casinos near Tampa and in Hollywood, across the street from the original bingo hall.
Rank Group's Hard Rock International unit last week reported an operating profit of $74.8-million on revenue of $501.9-million for 2006. More than 25 percent of the profit came from fees paid by the tribe for hotel and casino licensing rights, Allen said.
The company will keep the Hard Rock name for all properties, except the two Seminole Hard Rock Hotels & Casinos.
Executives at Orlando-based Hard Rock International will continue to run the company under a new parent called Seminole Hard Rock Entertainment.
Hard Rock plans to keep growing, with 10 hotels over the next three years, Allen said. Casino deals are more difficult, with different state regulations, he said. "If gaming opportunities come to us, great," Allen said. "But that's not the only thing."
Tribe members gathered Monday in the parking lot of the original bingo hall, a metal structure that still does a brisk business amid the pawn shops and tattoo parlors of busy U.S. 441.
Small kids howled the Pledge of Allegiance in tribal garb and T-shirts. Tribal Council members took turns on stage talking about the struggles of the Seminoles to defend their rights against the federal and state governments. They also recalled how poor they grew up in the 1950s, decades before gaming filled the tribe's coffers.
Chairman Mitchell Cypress recalled riding in cattle trailers to reach the dirt playground that became the bingo hall. Osceola said Seminoles were familiar with hard rocks - the natural kind.
"When my mother washed clothes in the river, it was with hard rocks," he said. Actually, it was in a drainage ditch by the airport, Osceola said later.
Steve Huettel can be reached at firstname.lastname@example.org or (813) 226-3384.
[Last modified March 6, 2007, 06:37:54]
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