Entrepreneur and founder, chairman and CEO of SBE Entertainment Group, Sam Nazarian is selling his minority stake in the money-losing SLS Las Vegas Hotel & Casino on the Las Vegas Strip. The company is also relinquishing management of the struggling property.

Nazarian is selling the 10 percent share owned by him and his family to San Francisco-based real estate investor Stockbridge Capital Partners, which owns 90 percent of the hotel, converting SBE’s current management agreement into a franchise agreement thereby enabling the 1,620 room hotel to keep the SLS brand name. The hotel’s 2,354 employees will be able to keep their jobs as part of the agreement, but will now call Stockbridge boss rather than the SBE Entertainment Group, which means while SBE will continue to receive licensing fees it will no longer collect management fees.

Terry Francher, Stockbridge’s executive managing director said, “Converting SBE’s current management agreement into a license agreement benefits all parties involved—our valued guests and employees, SBE and Stockbridge,” and added that it “will give the SLS Las Vegas flexibility to introduce new brands or restaurants,” according to a Wall Street Journal report.

With its limited casino business and isolated location on The Strip, the SLS Las Vegas has struggled since opening in August 2014, and an approximate net loss of $84 million during the first half of 2015 was reported, according to a regulatory filing. After Nevada gambling regulators granted Nazarian a limited and temporary casino license late last year, he agreed to remove himself from managing the SLS Las Vegas after speaking to regulators about previous drug use.

Nazarian’s operating base is once again Los Angeles after selling his home in Las Vegas a few months ago, but still owns a condo and two nightclubs there.

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