Caesars Strikes Deal With Culinary Union. They Had No Choice.
Timing is everything. It’s true when it comes to locking down a great interest rate on that new house. True, also, when it comes to finding the right person in your life. And it is certainly true when your five year contract with one of the largest casino operators in Las Vegas comes up mere weeks before a major event. That’s right, Caesars Entertainment has struck a tentative five year agreement with the Culinary Union Local 226.
Why did Caesars have no choice but to cave to Culinary Union demands?
It all comes down to timing. When the Culinary Union’s agreements with Caesars Entertainment, MGM Resorts International and Wynn Resorts lapsed in September, the city held its breath. A potential strike of 35,000 employees could be crippling to the state’s largest financial sector. Not to mention to the workers themselves who could potentially go without a paycheck for weeks if not months if it went on long enough.
But the union pressed on, approving a strike by an overwhelming margin and amping up the pressure on the properties. Why? F1.
The Formula 1 Las Vegas Grand Prix has the potential to be a massive moneymaker for Strip properties and the state’s economy, and it just so happens to be taking place in a matter of days (beginning November 16th to be exact). This has been circled on the calendar for a year. Stock prices will hinge on its success.
Where the track goes, the importance of a new deal goes. Looking at the route for the race, it is evident that Caesars had a lot to lose. Every one of Caesars nine Las Vegas properties line the track. Losing nearly 10,000 workers and leaving high rollers in the dust (literally) would be potentially devastating to the bottom line – not only this year, but for the years of F1 to follow. It certainly doesn’t help Caesars case that the Las Vegas Convention And Visitors Authority and Caesars own calls on Wall Street have lauded record high gaming wins month after month. The money was there.
So with that in mind, the Culinary Union set a deadline of this Friday, November 10th at 5am. And like a perfectly planned UFC takedown, the Culinary Union got what they wanted. Caesars had no choice. The Culinary Union had the winning hand.
What about MGM Resorts and Wynn Resorts?
Now that Caesars is out of the way, it comes down to the other two of the big three. Wynn Resorts has been fortunate by not being visited by protestors during the Union’s several marches and displays of civil disobedience. Their only location, Wynn/Encore, is right along the route and Wynn does run the risk of losing out. They have had a pretty decent tone in statements about the Union, however. So a deal may get struck before strike day. They have a final negotiation with the Union on Thursday.
MGM Resorts International, on the other hand, is not nearly as affected by the race. While some properties do run along the route, several do not. They have already been getting non-Union staff members trained to fill in on positions that would be left vacant with a Culinary Union strike. Caesars couldn’t bluff. MGM may.