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Thread: Strip Club Depression

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    Default Strip Club Depression

    http://www.lewrockwell.com/french/french118.html


    Strip Club Depression
    by Doug French
    by Doug French


    Strip clubs are the ultimate boom time creation. After all, the business model rests on masses of men overpaying for cocktails while overpaying lithesome young women to bump and grind on their laps – all of this after paying an exorbitant charge just to enter the building.
    Prior to the great boom of the past decade the jiggle business was localized. Politically unpopular, zoning for such establishments is confined to industrial areas, tucked away from mom and the kids. Financing to build such businesses was hard to come by as many bank boards frowned upon the morals of the operation, turning a blind eye to the abundant cash flows. Publically traded strip club operators were unheard of.
    Of course given their unpopularity with local do-gooders, entrepreneurs who are able to open an adult business become ongoing targets for extortion by local politicians. Since the government tightly controls how many can open and the rules when they do, adult business owners are often forced to bribe city officials first to gain approvals to open their businesses, and then to remain open.
    Such was the case in one of the most fertile fields for the stripping business, Las Vegas. As home equity rich Americans were flooding Sin City after the shock of 9/11 wore off and Federal Reserve liquidity was making testosterone-filled young men feel like the good times would never end and money was for wasting, strip club owner Mike Galardi operated a small hole-in-the-wall money machine called Cheetahs. But with the town booming, he wanted to expand his feline-themed empire. But he wasn’t the only one. Everyone wanted to build a big club in Las Vegas. Convention traffic was soaring, gaming win was growing by leaps and bounds and more casino properties were planned for the Strip. Las Vegas was just getting started and the big-box strip club race was on. The 70,000 square foot Sapphire Gentlemen’s Club was underway right behind Circus Circus, as was the large, ornate Treasures located across I-15 from Palace Station. So many others were trying to open clubs that a moratorium was placed on new applications.
    $25 $22
    With approvals for his 25,000 square foot Jaguars club hard to obtain, Galardi made a few hundred thousand dollars in gifts and cash payments to county commissioners to get Jaguars started and keep county inspectors off his back. Ultimately three Clark County commissioners, as well as Galardi, would go to prison in a political corruption case known as G-Sting.
    Of course Galardi was only doing what he had to do. In his book, The Ethics of Liberty, Murray Rothbard explained that there "is nothing illegitimate about the briber, but there is much that is illegitimate about the bribee, the taker of the bribe. Legally, there should be a property right to pay a bribe, but not to take one."
    Former Galardi employee and friend Rich Buonantony told the San Diego Union-Tribune newspaper. "[Galardi] was giving hundreds of thousands of dollars, and do you think it was easy to remember giving five grand here and 10 grand there? It was nothing for him to give money. People looked at Mike Galardi like he was an ATM machine." Those "people" Bounantony referred to were politicians.
    But now that the boom has turned bust, business has flattened for strip clubs. The 25,000 square foot club that forever changed the lives of Galardi and three commissioners is now owned by the publically traded Rick’s Cabaret International Inc. Eric Langan, the man who took over Rick’s in 1998, ramped up the company’s growth in 2005 and now it owns 19 clubs around the country. Quite a story for a guy who sold his baseball card collection to finance his first club, "I just jumped in," says Langan. "With cold beer and some naked girls, it’s pretty easy to make money."
    $14 $12
    With that initial $24,000 investment, Langan’s first club measured 1,600 square feet. Now, as he told BBook.com, some of his clubs have dressing room areas measuring more than three times that space. Back in 1999 Rick’s was trading for less than a buck a share on NASDAQ but by December of 2007, with his shares trading for $27 – more than the price of a lap dance – Langan’s goal became to own 50 clubs in three to five years. He bought a 47,000 square foot club in Miami for $25 million, a 25,000 square foot Dallas club for $9.5 million and he paid $18.7 million for the former Jaguars in Las Vegas. Rick’s balance sheet is now showing the strain. At September 30, 2006, liabilities totaled less than $17 million. Now with business sagging along with the asset values of the clubs, the company’s debts have soared to almost $72 million.
    And the company has encountered expenses that Langan likely didn’t include in his pro forma when analyzing his company’s Las Vegas purchase. Cab drivers in Sin City have always collected bounties for delivering passengers to various businesses – especially strip clubs. But the price has soared in recent months as business has soured.
    When a lot of loose cash is floating around, lawyers start taking interest. Attorney Al Marquis has filed a lawsuit to stop cabbies from being paid for delivering customers, thinking that it’s bad for Vegas. "The problem with paying for the delivery of customers is that it’s been escalating in recent years. It has begun to substantially alter the conduct of lots of different parties from hosts and doormen at casinos; to individual cab and limo drivers; to tourists getting diverted over their objection."

    To regain market share Rick’s Las Vegas hiked cabbie payouts to $100 per head which led to an increase in monthly sales to $1.9 million in April, according to the Wall Street Journal. However, $1 million of that went to cabbies and the club lost money for the month. "You gotta remember, in our industry it’s all about the girls. So he who has the girls has the customers, and he who has the customers has the girls," Lagan philosophized during a recent investor conference call. "So it’s really a chicken and egg and which came first. The trick is keeping the girls and the customers on a platform…. The guys will always go where the girls are."
    What Lagan didn’t say is that the girls are important because they pay to work. So, beyond the drinks and the cover charges and in some cases expensive meals, strip club cash flow depends first and foremost on entertainers paying to entertain. Back in the Las Vegas boom days it was $50 per shift (depending upon the time of day) and $75 or $100 during convention weeks. On top of that, dancers are expected to tip the disc jockeys, floormen and house mothers.
    But the current bust means too many dances are chasing too few laps in too much square footage. "For an industry often thought to be recession proof," the WSJ’s Kris Hudson writes, "the transition has been sobering." Rick’s stock is trading below $7 and publiclytraded rival VCG Holding Corp. is trading at $2.40, a decline of 83% from its peak. And investors are not the only ones getting hammered by the softness in the bump and grind industry. The entertainers themselves are shaking their moneymakers for much less these days. Buffy, who plies her trade at Rick’s in Las Vegas told the WSJ that she is making only a quarter of what she did during the boom. However, that beats the mortgage business for Sara, who gave up making loans in the bay area, for stimulating conventioneers in her g-string at the Sapphire Gentlemen’s Club. Reportedly, "a laid-off paralegal, a laid-off fashion designer, a Bank of America banker, a former paralegal and two Los Angles real estate agents" have changed careers despite the lower returns to be had working in 8-inch heels. However, anyone who has spent time in strip clubs will tell you that obtaining reliable personal information from entertainers is problematic.
    The overexpansion of the strip club business is yet another malinvestment created by the Federal Reserve’s monetary creation. As F.A. Hayek has explained, profits made through stock market or real estate appreciation in terms of money, "which do not correspond to any proportional increase of capital beyond the amount which is required to reproduce the equivalent of current income, are not income, and their use for consumption purposes must lead to a destruction of capital."
    The wealth that strip club patrons and strip club moguls thought they had to throw around was but an illusion and the reality is sobering for the entertainers, cabbies, politicians and others that have been riding the strip club boom.
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    Default Re: Strip Club Depression

    Also posted in the Dollar Den...

    http://forum.stripperweb.com/showthread.php?t=133248
    If you can't win. Make the fellow in front of you break the record.


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    Default Re: Strip Club Depression

    Verfolgung

    Sorry not allow to post any where esle on this site but this area.
    My Blog:

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    Default Re: Strip Club Depression

    Come into the Blue.

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    Default Re: Strip Club Depression

    interesting article...I am shocked to find that they pay $100 per head to bring in a strip club...that explains why spearmint rhino started to jack up their cover charge to $50 (and include 2 drink tickets) when people arrive in taxi instead of using their limo service.

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    Default Re: Strip Club Depression

    In most places, the cover charge is equal to the cabbie payout. When it gets REALLY exorbitant - like $100 a head - they'll eat some of it, but you can tell how bad the cabbies are extorting the club by what the cover is that day. Oh - and if you're local and arrive in your own car, here's usually no cover, lol.

    Cabbies are fucking crooks in this town. Goodman had a chance to shut them down HARD a few years ago and he caved. That article talks like the clubs are paying the cabbies; that's not how it works.

    They didn't go into how the cabbies bilk the clubs, it's outright robbery. And if you refuse to pay the cabbies what they're demanding today, suddenly tourists are hearing that your club burned down or got closed or is out of business and you oughtta try THIS club, trust me I'm local and it's awesome (and happens to be paying me what I'm demanding per head to drop customers there).

    They have bankrupted more than one business in this town already when the business in question refused to pay for drops, be it night club, strip club, or bar. It's naked extortion.

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    Default Re: Strip Club Depression

    Great Article.

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    Default Re: Strip Club Depression

    Quote Originally Posted by Almost Jaded View Post
    It's naked extortion.
    I found this interesting quote; "Is it right? Hell no, lol. But it's Vegas, so that's how it is. Frankly after a living here a while and paying attention, you start to appreciate the way things run in a weird sort of way. I start to see why the lifetime locals say the town was so much better when the Mob ran it, and why they say things went down hill when they "cleaned up" the city. Honestly, a city like this one couldn't possibly run "legit" by some others' definition; it's just not possible."

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    Default Re: Strip Club Depression

    Oh my gosh Earl, that bug! I was flicking my computer screen!!!! This is an interesting article indeed, I wish I could bring it to work and shove it under the noses of the "but you guys still money, right?" Guys.
    XoXo Gia
    Danielle Fishell (the Dish): "If the Super-Star thing doesn't work out, Gia makes a great stripper name"

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    Default Re: Strip Club Depression

    Earl - the cabbies don't fit into that equation. They're fucking up the cabbage patch. Everyone in the city wants to line them up and shoot every fucking one of them, lol. They drive like they own the town, they extort damn near every business in the city, they rip off tourists, and much more.

    When a bill ws floated to make some of this illegal and punishable, a few hundred - maybe thousand - cabs parked their cars on the strip for hours. Shut the whole thing down, completely topped traffic and nobody could get a cab. Their little way of protesting. The powers that be could have revoked every one of the licenses of the drivers that did this, and the business and/or operating licenses of the companies - or at least threatened to - but didn't. The bill went away, and the drop rates DOUBLED OVERNIGHT in retaliation.

    Good thing Cyril isn't opening Dream Girls here - he'd be screwed, lol.

    Really though, it's terrible, and nothing gets done about it. You'd have to be here to get it; cabbies literally walk around with attitudes like gangsters. It's a perfect - and horribly wrong - example of how a united front can be effective, but their little cartel need to be broken. It's a huge drag on everything in this city.

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    Default Re: Strip Club Depression

    Quote Originally Posted by Almost Jaded View Post

    When a bill ws floated to make some of this illegal and punishable, a few hundred - maybe thousand - cabs parked their cars on the strip for hours. Shut the whole thing down, completely topped traffic and nobody could get a cab.

    It's a perfect - and horribly wrong - example of how a united front can be effective, but their little cartel need to be broken. It's a huge drag on everything in this city.
    That is the way things are done in the North East or the working man would never get a piece of the pie. It would be easy to put a stop to the pay per head delivered; just stop paying it.

    Now what is more desirable a dancer or a cabbie; when the dancers decide to unite I will run for business manager.

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    Default Re: Strip Club Depression

    Quote Originally Posted by Earl_the_Pearl View Post
    That is the way things are done in the North East or the working man would never get a piece of the pie. It would be easy to put a stop to the pay per head delivered; just stop paying it.
    In the immortal words of Vizzini - "You'd like to think that, wouldn't you?!

    It's been tried. A bunch of club owners got together in 2006 and stopped paying at all. All it takes is one bad apple - a couple of smaller club owners who'd been unable to compete with the $50 to $75 a head rates the bigger clubs had been paying started paying a little less, and they started booming. Thus the stories - cabbies were literally telling people who asked to be taken to Seamless or Scores or Spearmint "Oh that place burned down" or other such crap and taking them elsewhere. The bigger clubs were still getting customers via walk up, drive up, and limo - but people couldn't get a cab to leave - THERE WERE NO CABS COMING TO THE CLUBS AT ALL. Once a cabbie calls out on the raadio that a particular club "isn't freindly", i.e., won't pay what they asked, cabs stop going there. Pretty soon one club caved and started paying $50, then another was paying $60, and it's back where they started.

    You don't know how bad it's gotten, lol. Tourists ask to be taken to Little Ceasars and end up at Cheetahs. They try to get from the airport to the Bellagio and end up at Sapphire. It's unreal.

    Quote Originally Posted by Earl_the_Pearl View Post
    Now what is more desirable a dancer or a cabbie; when the dancers decide to unite I will run for business manager.
    I would LOVE to see a succesful and well run strippers union, adult entertainment union, etc. I would also like to see car salesman and a bunch of other commonly screwed by management professionals pull it off. It's sad that industries that needed it 50 or more years ago still have their useless, industry-killing unions that cause more harm than good - UAW anyone? Steel workers? But the industries that need it now cant pull it off.

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    Default Re: Strip Club Depression

    for what should be obvious reasons, salespeople (and all strippers and other sexworkers are salespeople) cannot benefit from unions the way that people not selling things can.

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    Default Re: Strip Club Depression

    Quote Originally Posted by miabella View Post
    for what should be obvious reasons, salespeople (and all strippers and other sexworkers are salespeople) cannot benefit from unions the way that people not selling things can.
    When there was Ma Bell and the Yellow Pages were a must to advertise the people that sold ads were represented and were the highest paid employees in the company. More so than the the men that worked on maintaining the lines 24/7 in any and all weather.

    I know it will never happen for dancers as women do not make a good picket line as they don't want to offend let alone make it uncomfortable.

    In LV the cabbie's shut down the city until they got their way. How many of them were women and why? I'm sure the are not represented yet got their way.

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    Default Re: Strip Club Depression

    miabella - I don't think it's obvious, frankly I can't imagine why you say that at all. Any group of workers can form a union. Salespeople are some of the most "abused" workers anywhere, aside from dancers (abused as in taken advantage of by employers). And they are some of the most important people in the any company that employs them.

    Earl - having worked for AT&T in several capacities, I can assure you that your figures are off, lol. In fact in many areas the yellowpages reps and the line workers have the same union (not everywhere).

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    Quote Originally Posted by Almost Jaded View Post
    Earl - having worked for AT&T in several capacities, I can assure you that your figures are off, lol. In fact in many areas the yellowpages reps and the line workers have the same union (not everywhere).
    Most do have the same union and all represented employees get the same benefits but do not get the same salary. As in all sales jobs they got a small salary and big commissions. Remember this is when Yellow Pages was the only show in town. Some got 4 times the next top salary.

    Of course Yellow Pages was spun off and is no longer part of The Phone Company as it is no longer profitable.

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    Default Re: Strip Club Depression

    Of course Yellow Pages was spun off and is no longer part of The Phone Company as it is no longer profitable.
    Depends on which phone company you're talking about. Some have spun it off, some have not, some phone books aren't tied to any phone company anywhere. Some lose money, some make it hand over fist.

    Those salespersons who make that kind of money are the most valuable employees you can have, if they're honestly that good (I've seen reps falsify customer orders, collect a large 5 figure check, quit the next Monday, and be pursued across 3 states for fraud). A salespersons base is generally quite low; barely enuogh to cover rent in a mid-level place and food. If they make $250k/year in commission - they worked 14 hour days 5-6 days a week to do it, I promise you. At least for a few years until they had the repeat clientele to take it a little easier.

    But you don't see that anymore, case on point for the discussion. My last Yellow Pages related job, the company paid HUGE comissions with barely any base at all, really none, it was a draw against commissions. When they expanded, "territories" were established - and many reps lost books of business worth literally millions in revenue, hundreds of thousands in commission - books they'd spent years working their asses off to build, just gone. A union woulda been handy about then... So then they offer a small but reasonable base of approx $30k/year, and a much less lucrative commission structure to those who stayed and the newcomers (this was when I came to work there). That base was changed 3x in 2 years, the commission structure overhauled each time. Each time, renewal business was worth less and less, and the target numbers for the bg percentages got higher and higher. Always disguised as easier/better, too - they think salespeople are stupid, which cracks me up given the average IQ of a successful sales rep is 20 points higher than the average middle manager - but I digress. "Now you only have to have 11 deal count to get 20% instead of 15! Go make that money! BTW, renewals no longer count as deal count, new business only." By the time a left, average income was down $25k/year across the board, and the six-figure salespeople were all but gone (3 remained when I left, and they're 2009 YTD is 40% lower than their 2008, which was about 50% lower than their 2006). They finally got union, just as I was leaving. The company fired 15 top performers - all but one of them union supporters - under shaky pretenses involving violation of company email use policy. The charges against them were valid; they were also valid against 12 other employees - who didn't make as much and werent union supporters - who were not fired. That union is now fighting to protect what the current group has, which is worth a pittance compared to what we had 3 years ago.

    And that's just an internet yellowpges company. Car sales people have it MUCH worse. I sold cars for a few years here and there between other gigs. Some places change the commission structure every 60-90 days.

    Retail electronics salespeople make less than 30% of what they did 20 years ago. You know, when money went farther, lol. Wonder why you get shitty service at Best Buy from a zit-faced 17 year old? 'Cuz the real experts won't work for $13/hour when they used to make $100k/year.

    And dancers have it as bad or worse. The club MM was at when I met her changed their door fee and pay structure 3x in one month. At the last change, they lost ALL BUT 4 of their dancers in 3 days. Had to call a few girls and offer them a special "exemption" from the new fees to get them to come back. A few did. The new girls are getting shafted hard under the new fee schedule. The owner just bought a new BMW M6.

    Ripe groups for unionization if you ask me...


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    Default Re: Strip Club Depression

    i know salespeople making what you quoted in commission and no, they don't all work the hours you are talking for it. this may be a regional difference. which kinda illustrates my point about unions-- salespeople do have widely varying experiences.

    putting parts together on a line will be the same anywhere, so unions can provide a higher income to workers and a better benefit. selling something does require unique skills, so a union is not a net win for anyone who's actually good at selling.

    strippers certainly put themselves on the block to be exploited, but top earners make pretty insane money in regular world terms, so why would they want a union?

    union strippers are not all going to make 2k/night, or even 500/night. ask the lusty lady girls, who are taking pay *cuts* pretty reliably, not pay *increases* (and that's not even a union, but a profit-share collective).

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    Quote Originally Posted by Almost Jaded View Post
    Earl - the cabbies don't fit into that equation. They're fucking up the cabbage patch. Everyone in the city wants to line them up and shoot every fucking one of them, lol. They drive like they own the town, they extort damn near every business in the city, they rip off tourists, and much more.

    When a bill ws floated to make some of this illegal and punishable, a few hundred - maybe thousand - cabs parked their cars on the strip for hours. Shut the whole thing down, completely topped traffic and nobody could get a cab. Their little way of protesting. The powers that be could have revoked every one of the licenses of the drivers that did this, and the business and/or operating licenses of the companies - or at least threatened to - but didn't. The bill went away, and the drop rates DOUBLED OVERNIGHT in retaliation.

    Good thing Cyril isn't opening Dream Girls here - he'd be screwed, lol.

    Really though, it's terrible, and nothing gets done about it. You'd have to be here to get it; cabbies literally walk around with attitudes like gangsters. It's a perfect - and horribly wrong - example of how a united front can be effective, but their little cartel need to be broken. It's a huge drag on everything in this city.
    I have often wondered why these assholes don't lose their cab licenses. It's not like there wouldn't be more than enough new applicants lining up to replace them immediately. Ridiculous.

    I would also wager that if the mob still ran things, the cabbies would've gotten a good smackdown a long time ago.

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    Default Re: Strip Club Depression

    Buxom and I finally find something on which to agree, lol.

    Miabella - Why would a union ruin things for top earners? That's all in how the union is structured. Unionization doesn't have to mean representation for the lower percentage at the expense of the top earners; just because that's how other unions have screwed other groups doesn't mean that's how a new union need operate. I would expect that a sales union or union for other workers making commissions, or a union representing a group of independent dancers (yes, that can be done) would have to respect the top earners or fail faster than Dream Girls (sorry, couldn't resist).

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    Default Re: Strip Club Depression

    Quote Originally Posted by Almost Jaded View Post

    Miabella - Why would a union ruin things for top earners?
    Correct look at the actors union; Harrison Ford has been named the highest earning actor in Hollywood - after he took home a massive $64.95 million in the last 12 months. The same union represents General Background Actors at $130 a day.

    Remember the union does not make the rules, they negotiate on behalf of the members; if the members do not like the way the union is managed elections are held and changes can be made.
    SAG President


    Screen Actors Guild
    1947 to 1952 and in 1959

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    Default Re: Strip Club Depression

    I thought it was the Film Actors Guild?

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    Quote Originally Posted by Almost Jaded View Post
    I thought it was the Film Actors Guild?
    Reagan was F.A.G. President?


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    Default Re: Strip Club Depression

    don't conflate unions and guilds-- they are very much not the same at all. guilds have membership, but they don't negotiate prices the same way unions do-- in fact, guilds have historically been more for people offering unique products rather than people doing a specific task over and over.

    in a guild, you simply can be assured of not getting less than x for your product, but you can charge what you please above that for it.

    in a union, seniority rules. this is standard.

    guilds also require very little of their members. a SAG card isn't going to bankrupt anyone, and it is worth noting that the writer's guild has to hold fundraisers to pay for medical care sick members who aren't making millions from their writings. unions, on the other hand, are understandably known for how they negotiate benefits for their workers.

    the two things are often confused, but in fact guilds are designed for unique sellers of goods and services and work fairly well in very limited terms for such people. unions are designed to make sure people offering a standardised service or good are not doing it for bread/water or for 10 cents per day and that they can have healthcare when sick, pretty much.

    strippers don't offer a standardised service. strippers offer unique services and a union is not designed for their sort of work. a guild can be designed for their sort of work, if one was inclined that way. but it is more limited.

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    Default Re: Strip Club Depression

    A guild would make sense, but so would a union. As I said before and others have reiterated, a union can be set up however the members decide to do it. I think a group that has the ability to strike/picket/lobby for their group, that negotiates things like caps on door fees, benefits, and the lke would be very valuable to the industry. Well, to the dancers, anyway, LMAO.

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