Wynn Macau Ltd revealed Tuesday that it has agreed to revise upwards the maximum amount of money it will pay to its parent company, Wynn Resorts Ltd, for the use of intellectual property.
The revisions relate to Intellectual Property License Agreements signed late last year for the 12 months to 31 December 2023 under which Wynn Macau Ltd and Wynn Resorts (Macau) S.A. would pay a maximum of US$75.1 million to Wynn Resorts Ltd and Wynn Resorts Holdings LLC. The agreement covers certain trademarks, domain names, “Wynn” related trademarks, copyrights and service marks in connection with a variety of goods and services.
According to details outlined in a filing, Wynn Macau and Wynn Resorts on Tuesday signed a revised agreement under which the annual cap for FY23 has been increased to US$115.1 million. The revised cap was calculated, Wynn Macau said, based on the traditional formula, the historical amounts paid by the group for the licensing of Wynn Resort’s IPs; the anticipated business and financial performance of the Group for the year ending 31 December 2023; the unaudited operating revenue of the Group for the five months ended 31 May 2023; and the expectation for the recovery of the Macau gaming industry for the year ending 31 December 2023.
“At the time when the original annual cap for the Intellectual Property License Agreements of US$75.2 million was set on 30 December 2022, Macau was still subject to various public health control measures due to the COVID-19 pandemic,” Wynn Macau said.
“Since the relaxation and elimination of most COVID-19 pandemic-related protective measures over the course of December 2022 and January 2023, the Company has noticed an improvement in business and financial performance. The original annual cap is insufficient to satisfy the increasing demand for the transactions to be contemplated under the Intellectual Property License Agreements for the year ending 31 December 2023.”
Wynn Macau previously reported operating income of US$47.1 million and Adjusted Property EBITDAR of US$155.8 million in 1Q23, reversing an income loss of US$98.3 million and an Adjusted EBITDAR loss of US$5.5 million in the same period last year.
