“The town will never be the same. After the Tangiers, the big corporations took it all over. Today it looks like Disneyland. And while the kids play cardboard pirates, Mommy and Daddy drop the house payments and Junior's college money on the poker slots. In the old days, dealers knew your name, what you drank, what you played. Today, it's like checkin' into an airport. And if you order room service, you're lucky if you get it by Thursday. Today, it's all gone. You get a whale show up with four million in a suitcase, and some twenty-five-year-old hotel school kid is gonna want his Social Security Number. After the Teamsters got knocked out of the box, the corporations tore down practically every one of the old casinos. And where did the money come from to rebuild the pyramids?... Junk bonds.”
That’s Ace Rothstein in Martin Scorcese’s Casino referring to the evolution of the casino business from backroom operation to “airport”-sized enterprise. Once corporate America realized how much money there was in count rooms, there was no stopping the big business from taking over. The same evolution is happening in the nightlife industry today. What was once a business headed by entrepreneurs, creative types and street hustlers is now dominated by hotels, casino moguls and national nightlife conglomerates.
As you read this column, casino visionary Steve Wynn is constructing Encore Beach Club and Surrender Nightclub, costing him $100 million. Yes, $100 million… on a nightclub… which means they better sell a lot of Cristal and Dom P.
Andrew Sasson’s Light Group is opening their own beach/nightclub, “Liquid,” at City Center’s Aria Hotel. Rumored price tag: $70 million. That seems like a lot more than Sasson’s New York clubs (Jet Lounge, Jet 19 and Jet East) have earned throughout their entire operation.
Finally, as rumor has it, Strategic Group’s Noah Tepperberg and Jason Strauss have a $30+ million project in the works.
The catalyst for this massive nightlife-related construction the Las Vegas lifestyle. Tao Las Vegas is raking in gross revenues of approximately $70 million annually, and XS, the nightclub at Encore run by Victor Drai, is generating million-dollar weekends. In a time when casino and “family” revenues are plummeting, the City of Sin’s success is being propped up by the public’s gargantuan appetite for the party lifestyle – at all hours of the day.
Just like the casino business, nightclubs were once run by street-smart hustlers, but the business of the night has shifted from the backroom to the boardroom.
Revenue in New York, though substantial, will never be able to exceed revenues in Las Vegas. Tourists from all over the world fly into Vegas, planning to leave without a dime in their pockets. Additionally, real estate in New York is not priced to allow for Vegas-sized venues. Aside from these differences, New York and Vegas are still very strongly connected. As the world devours American culture, Vegas feeds on New York’s creative capital and talent. Bottom line: there is no Vegas nightlife without the ideas and people of New York, including Tao, China Grill, Sushi Samba, Raos, Light and so many more of New York’s greatest hospitality offerings.
The real question is how the development of these major national nightlife conglomerates will affect the future of the nightlife business. How much revenue are they all really generating? In 2010, does it now cost millions of dollars to get into the nightlife business, or can a kid from the boroughs still take $250 thousand combined with a new idea – like Steve Rubell & Ian Schrager did – and change the business forever? Will we see the continued development of global nightlife companies or will the street hustlers who started the business blow it up like Scorcese’s semi-fictional characters, Ace Rothstein & Nicky Santoro, bringing down the whole business in a blaze of glory?
“…but it should'a been perfect. I mean, he (Ace) had me, Nicky Santoro, his best friend, watching his ass and he had Ginger, the woman he loved, on his arm. But in the end we fucked it all up. It should'a been so sweet, too. But it turned out to be the last time that street guys like us were ever given anything that fuckin' valuable again…”
Only time will tell, but for some fun I thought we should delve a little deeper into what type of money the business of the night is really making. This article will continue on Thursday with the first annual “A-List” – an inside look at the 15 largest nightlife companies, their empires and the millions of dollars they’ve generated. Sure, you read about them in Page Six and US Weekly, but on Thursday you will finally know what they really amount to.
See you next Thursday at Cocktail Hour, where more often than not one drink turns into ten and no one knows where and when the night will end.
-AP
