American Indian Tribe Gambles on Hard Rock International
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The Seminole Tribe of Florida says it has reached a deal to buy Hard Rock International Inc., the first purchase of a major international corporation by an American Indian tribe.
During a press conference at the Hard Rock Café in Times Square yesterday, the chief executive officer of Seminole Gaming, James Allen, said the tribe outbid about 70 prospective buyers from around the world. It bid about $965 million.
With the purchase, the tribe acquires 68 Hard Rock Café Restaurants and retail stores, and the licensing agreements to another 56 restaurants and five hotels. The Seminole Tribe of Florida already owns two Hard Rock Hotel and Casino properties, in Hollywood and Tampa, Fla.
The deal also includes the Hard Rock’s extensive collection of music memorabilia, a collection Hard Rock International’s president, Hamish Dodds, called “priceless,” as well as the 20-story Paramount Hotel in Midtown.
Mr. Allen said the tribe’s economic strength will provide Hard Rock International with an opportunity for growth. The Hard Rock properties the tribe owns in Florida are about 25% more profitable than other company franchises worldwide, he said.
“This is the first stone going into the tidal wave,” a council representative of the Seminole Tribe of Florida, Max Osceola, Jr., said yesterday.
The tribe said it would work with the existing management at Hard Rock and is set to keep current employees at Hard Rock destinations around the world, Mr. Allen said.
The tribe is considered the first American Indian organization to enter the gaming business, opening up the country’s first high-stakes bingo hall in 1979. Currently, the tribe owns five other casinos in Florida that are not associated with the Hard Rock brand.
American tribal gaming revenues reached about $23 billion across the country in 2005, about an $11 billion increase from 2000, according to the National Indian Gaming Commission.
In order to fund the purchase, the tribe will combine debt issued by a new Hard Rock operating company and equity from the tribe’s gaming division.
Yesterday’s press conference was kicked off with a blessing by a traditional Seminole medicine man and rainmaker, Bobby Henry. Two leading members of the Seminole Tribe of Florida, Mr. Osceola and Andrew Bowers Jr., spoke about the tribe’s turbulent history and touted the purchase of Hard Rock as an investment in the tribe’s future.
“Our ancestors sold Manhattan for trinkets,” Mr. Osceola said. “Starting today, we’re going to buy back Manhattan hamburger by hamburger.”
Today, there are about 3,000 members of the Seminole Tribe of Florida living on and off of reservations.