MGM National Harbor's share is marked for sale by Urban One, for the price of $145.5 million.
Media firm Urban One (NASDAQ: UONE) is cutting ties with its ownership in MGM National Harbor following a considerable increase in its initial investment in the Oxon Hill, MD casino.
In a Form 8-K filing with the Securities and Exchange Commission (SEC), Alfred Liggins' company announced the issuance of a "put notice" for its entire stake in the casino. Once the put notice is issued, no later than 30 days after receipt, MGMNH is required to repurchase the put interest for cash. Urban One anticipates receiving approximately $145.5 million at the time of the put interest settlement, which includes both the put price and the company's annual distribution from MGM National Harbor for fiscal year 2022, as stated in the regulatory document.
Based in Silver Spring, MD, Urban One manages various media assets, including CLEO TV, One Digital, R1 Digital, Radio One, and Reach Media, among others.
Wise Decision by Urban One in MGM National Harbor
In December 2016, just days after its opening, Urban One obtained approval from the Maryland State Lottery and Gaming Control Commission to invest $35 million in MGM National Harbor, bringing the media company's interest in the gaming venue to $40 million.
This passive investment allowed Urban One to diversify its business model. Over the past six years, the company received annual dividends based on MGM National Harbor's net gaming revenue. Throughout this period, MGM National Harbor became one of the leading casinos in the mid-Atlantic region.
Undoubtedly reinforcing the idea that Urban One made a shrewd investment in the integrated resort, MGM National Harbor was the highest-grossing casino in the US outside of Las Vegas last year, surpassing even its competitors on the Atlantic City Boardwalk in terms of revenue.
National Harbor is one of seven regional casinos operated by MGM. The company's other domestic venues, excluding Las Vegas, are located in Atlantic City, Biloxi, MS, Detroit, Springfield, MA, Yonkers, NY, and Ohio. VICI Properties (NYSE: VICI) owns the real estate under National Harbor and the other venues.
Plans for MGM National Harbor Proceeds by Urban One
In the SEC filing, Urban One does not disclose plans for the incoming proceeds from the sale of its MGM National Harbor stake.
It's plausible that the media behemoth could utilize some or all of that capital to continue its pursuit for a gaming project in Richmond, VA. However, that endeavor faced a setback last September when the city terminated its contract with the company.
There's also speculation that the media entity could use the cash to acquire additional radio stations as part of a move to diversify its primarily urban-focused lineup. Urban One has yet to publicly comment on this matter.
