Mohegan - If revenues pick up at Mohegan Sun this spring, it'll likely be because of the entertainment at Mohegan Sun Arena, casino executives told investors and gaming-industry analysts Thursday during a conference call.

The 10,000-seat arena, a venue that sets Mohegan Sun apart from its competition, suffered from a recession-induced downturn in the number and quality of touring acts last year, a trend the executives say is turning around.

In March alone, the arena's bookings include Bon Jovi, Elton John, Rod Stewart and Stevie Nicks, they noted.

"It's become a stop for every major touring performer," Mitchell Etess, chief executive officer of the Mohegan Tribal Gaming Authority, said of the arena. And, he added, attendance at arena events "impacts both our gaming and nongaming revenues."

The authority's financial results for the first quarter — the three months that ended Dec. 31 - show the arena hosted 23 events during the quarter, down from 30 during the same period in 2009. Some 61,000 fewer tickets were sold at an average price of $45.79 - about $10 less than the average price in October, November and December 2009.

Overall, the authority, which operates Mohegan Sun and Mohegan Sun at Pocono Downs, a racetrack casino in Wilkes-Barre, Pa., reported first-quarter net income, or profit, of $12.9 million, nearly triple the $4.4 million profit it reported for the same quarter in 2009.

By another measure, the authority's quarterly EBITDA (earnings before interest, taxes, depreciation and amortization) of $68.5 million was up 7.3 percent. Gaming revenues of $307.7 million were down less than 1 percent and nongaming revenues of $53.4 million were down 11.4 percent. Nongaming revenues include those from retail shops, restaurants and entertainment.

Two main factors accounted for the positive overall results: the introduction last summer of table games, including poker, at Pocono Downs, and cost savings at Mohegan Sun in Uncasville, which in September eliminated 475 positions, closed one of its two buffet restaurants and consolidated other food-and-beverage outlets.

"We are pleased with our results for the quarter," Etess said in a press release issued in advance of the conference call. "Despite lower revenues at Mohegan Sun, our employees and management teams did an excellent job in managing costs. ... I would like to personally thank each and every one of our employees for their continued hard work and dedication to our company."

In the press release, the authority said the ongoing decline in slot revenues at Mohegan Sun was the result of "continued weakness in consumer spending and aggressive promotional programs by competitors," a reference to nearby Foxwoods Resort Casino and slots parlors in New York and Rhode Island.

Several conference-call participants posed questions about the authority's investment in Washington state, where the Mohegan Tribe has partnered with the Cowlitz Tribe to develop and manage a $510 million casino. In December, the federal government approved the Cowlitz Tribe's acquisition of a 152-acre reservation that would accommodate the project. The approval has been challenged in federal court.

Leo Chupaska, the authority's chief financial officer, said the challenge, and others that might yet surface, could take a year or more to play out, after which construction could take at least another year-and-a-half. The Mohegan Tribe and the authority have invested $40 million in the project thus far, an amount that will be reimbursed once the Cowlitz Tribe obtains financing for the project, Chupaska said.

The authority has invested another $4 million to $5 million in a proposed casino project in Palmer, Mass., which is contingent on state authorization of casinos.

The authority also reported Thursday that it has engaged Credit Suisse, the financial services company, "to assist in the evaluation and implementation of refinancing alternatives." In November, the authority hired Blackstone Advisory Partners for a similar purpose. As of Dec. 31, the authority had drawn $543 million on a $675 million revolving bank loan due next year and had total debt approaching $1.7 billion.

During the quarter that ended Dec. 31, the authority distributed $4.5 million to the Mohegan Tribe.

b.hallenbeck@theday.com

By the numbers

$12.9 millionFiscal 1st quarter netincome, 2010

$4.4 millionFiscal 1st quarter netincome, 2009

$307.7 millionGaming revenues, 2010

$53.4 millionNongaming revenues

Source: Mohegan TribalGaming Authority