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Blackstone preparing to “invest significant capital” into Crown Melbourne upgrade - June 2023

The President of US private equity giant Blackstone says the company is planning to invest heavily into a much-needed renovation and upgrade of Crown Melbourne following its AU$8.9 billion (US$6.5 billion) acquisition of the property’s parent company, Crown Resorts, last year.

Speaking with The Australian while in town this week, Jon Gray said he was confident Crown could become one of the world’s leading casino operators again in the coming years but that significant improvements were required across its long-time flagship operation in Melbourne.

Describing Crown Melbourne as “truly one of the kind, given its scale”, Gray explained, “Melbourne is a physical turnaround story and our objective would be to invest significant capital there and enhance the asset, which we think will be great for the community and great for tourism there as well.”

On Crown’s recent regulatory issues, which found the company deemed unsuitable to hold casino licenses in Melbourne, Sydney and Perth but given two years in each market to return to suitability, Gray added, “We want to be a best-in-class entertainment company and hotel business. We understand that there was a lot that wasn’t done right and we’ve got to come in here and operate at the highest standard, the highest standard from a compliance standpoint, but then make them as attractive as possible to customers.”

Despite the challenges still faced by Crown, which last week agreed to pay a whopping AU$450 million (US$293 million) fine to settle litigation by Australia’s financial crimes watchdog AUSTRAC, Gray has likened Crown – and particularly Crown Melbourne – to The Cosmopolitan of Las Vegas.

Blackstone famously acquired the struggling Las Vegas Strip property for US$1.7 billion in 2014 and eventually sold the business for almost US$5.7 billion after investing heavily into the property.

“If you went back to that (Cosmopolitan) story, it was a company that had been built, foreclosed on and had a number of staff issues and needed capital to complete it,” he recalled. “And we went in, we brought in a lot of capital and hardware, but then software in terms of restaurants and entertainment, a great management team.”

Asked by The Australian what role Crown’s three Australian casinos could play moving forward, Gray replied, “We think these are great tourism assets. And frankly, I think tourism is one of Australia’s great growth engines. Sydney, Melbourne, Perth – these are world-class cities that people want to visit. So isn’t it a good idea to own world-class assets in those cities?

“It’s a new day at Crown. That’s what we want to convey to people – we’re committed to operating this business at the highest standard possible and ultimately, we want tourists to come back in a big way.”

Crown Melbourne to sponsor South Sydney Rabbitohs - 14th May 2013
(Credit: The Sydney Morning Herald)

South Sydney will part ways with major home sponsor The Star at the end of the footy season to link with gaming and property billionaire James Packer and his Crown organisation.

The sponsorship change comes as Crown and Echo Entertainment - the parent company of The Star - wrestle for control of Sydney's lucrative casino market.

It was revealed on the weekend that the board of The Star had chosen not to renew its previous sponsorship deal with the club.

Crown boss Packer, a close friend of "Bunnies" owner Russell Crowe, pounced on the opportunity to substitute the rival casino's logo with that of his own.

The Crown Resorts emblem will be on the front of Souths jerseys for the next three seasons in a deal believed to be worth in the region of $1 million a year.

The tradition rich club advises the plans for a world class resort at the Barangaroo site in Sydney, at which Packer is lobbying to build a $1 billion hotel and casino, will provide opportunities for the Rabbitohs to be involved in Crown's Indigenous employment and training programs through its charity and community arm of the Club, Souths Cares.

Crown is working closely with the National Centre of Indigenous Excellence (NCIE) whose home is in Redfern alongside the South Sydney Rabbitohs.

South Sydney Rabbitohs CEO Shane Richardson says this is a perfect fit for the club and a major boost as it plans for the next three to five years.

“We're very excited to have Crown confirm that they will be joining the Rabbitohs family as our Major Home Corporate Partner for at least the next three years, starting next season,” Richardson said.

“Crown will be more than just a logo on the front of our home jersey. They will be a valued member of the Rabbitohs family, with our aim to be the number one sporting organisation in Australia.

“Crown is a global brand with a wonderful business reputation and a willingness and drive to help increase the attraction of Sydney to global travelers.

“We're excited by their plans for the Barangaroo South precinct and the opportunities that this will open up for our Club, opportunities for Souths Cares, and other organisations with whom we work.
“We are currently planning for our short- and long-term futures and Crown will become a major part of what we can achieve both on and off the field.

Crown CEO Rowen Craigie says Crown is “extremely excited about partnering with the Rabbitohs in 2014, particularly on our Indigenous employment programs at the NCIE".

“Souths are one of the oldest and most prominent sporting clubs in the country and part of Sydney's social fabric; we jumped at the opportunity to take up the sponsorship and will use the club's high profile to help deliver our Indigenous training and education roles in the Redfern area.
“Most pleasing will be the result for local job seekers, students and the players themselves.

Souths' players will be key mentors for Crown's school based traineeships at the NCIE and act as Crown education Ambassadors.

“Crown's sponsorship with Souths, will build on our training partnership with the Penrith Panthers Football Club and our wonderful sponsorship of the Melbourne Storm. Rugby League is part of Australia's social fabric and we are proud to be aligned with these great clubs.”