Personally, not a fan.
Which property is their top performer again? Oh, right.
Categories: Las Vegas Strip, MGM Resorts International, Macau Casinos and Hotels
Hmmm... Are they setting themselves up to sell The Mirage? Did Phil Ruffin make an offer?
Somebody needs to explain this change to me. I understand MGM's desire to drop the Mirage name (especially to distance themselves from the golden days of the Wynn era when they were still making a nice profit). However, Resorts International is already the name of a casino company. Has Kerkorian forgotten all about the Las Vegas Hilton? There must be a reason why they would switch to such a confusingly similar name.
Consistent with Jeff Simpson's "they're gonna sell off everything" vision of wanting to be known as something other than The Guys Holding Onto Wynn's Toys.
Kerkorian has gotten a lot of mileage out of just studio name. I have a feeling once he's gone and his holdings are distributed, the company will probably wind up picking a new name once again and announce a change in direction, as companies tend to do after the founder has left. "Aria Resorts" sounds boring but would work, and it sounds acceptable in most accents.
And if you think accents don't matter, consider that iPad in Japanese is "Eye-paw-doh", exactly the same as iPod. Which is just one reason why I always thought that name was awful.
The "international" at the end cracks me up, since Wynn is in just as many countries, and the somewhat regional sounding Las Vegas Sands is in more.
OK, I read the story. MGM execs are denying that this means Mirage is out... And I can't believe them just yet. The sale of TI and the opening of CityCenter really moved MGM's center of gravity south of Flamingo Road, and they'll need some serious capital infusion if they're considering buying Cosmopolitan and integrating it into CityCenter. The only reason why MGM wouldn't sell Mirage is b/c its earnings are holding up well.
I'd like to point out again, btw, that the Mirage's casino is like The Isle of Misfit Toys right now. Few of the new video slots from the past several years, I think I saw like two new slots by the buffet and that's it. VP odds are worse than Aria and Bellagio's, I saw 8/5 Double Bonus Poker and the Strip average is 9/6.
I'm not surprised by the change and I don't like the new name.
MGM Resorts would have been better, if they had to expunge Mirage from the name. I know they're sensitive about the primacy of MGM, but why not Bellagio Resorts?
"why not Bellagio Resorts?"
Because MGM is currently their flagship brand. They have an MGM Grand in Las Vegas, an MGM Grand in Detroit, an MGM Grand in Connecticut, and an MGM Grand in Macau. I'm sure once they resume global expansions, it's more likely they'll be opening more MGM Grands in Europe and Asia than Bellagios. MGM, as a brand, just carries the kind of cache around the world that Bellagio or Aria doesn't.
"I'd like to point out again, btw, that the Mirage's casino is like The Isle of Misfit Toys right now."
I would say that Mirage is more of an island in a sea of competitors. MGM Mirage now has a continuous lineup of casinos stretching from Bellagio all the way south to Mandalay Bay. It will be even further interrupted if MGM manages to buy Cosmopolitan.
But Mirage? It's next to what's now Phil Ruffin's TI on one side, and next to Harrah's high-end flagship Caesars Palace on the other side. And across the street is Las Vegas Sands' Venelazzo complex to the north and Harrah's continuous lineup of casinos stretching from Harrah's all the way south to Planet Hollywood.
And now that I'm thinking about it, that's always another possibility... I know you'll want to scream at me for this, but I could very well see Harrah's itching to pick up Mirage if MGM really wants to sell it. It's already connected to The Forum Shops (Harrah's can easily reinstall the moving walkway), and it would further complete the "upper-middle tier" of Harrah's Las Vegas arm of Total Rewards. It would really be too funny if what was once Steve Wynn's Las Vegas crown jewel ends up in Gary Loveman's and Marilyn Winn's hands. (Just picture Steve Wynn crying into his hard liquor over this.)
I'm not sure the "MGM" name is even worth keeping. It has no connection to Metro Goldwyn Mayer; the movie company from which it was separated and is now in bankruptcy. As recently as 6months ago there was a real possibility that MGM Mirage would go into bankruptcy itself. Since both the founding movie company and the casino company brands are tarnished, why not ditch the name altogether? Personally, I think they should go with Mandalay Bay resorts.
I was being a bit sarcastic about asking why they didn't use Bellagio Resorts. They never would have chosen a brand created by Steve Wynn. The MGM Mirage management has chosen to emphasize their MGM brand at the expense of their other, better brands. One decade ago, when MGM Grand Inc. acquired Mirage Resorts, Terry Lanni said that the two sides of the company were equal, a point they emphasized by adopting the new MGM Mirage name. (In reality, Mirage was already established as the premier brand in the industry and Bellagio was newly established as the best casino resort in the world.) During the next half decade-plus, Bellagio crushed all other MGM Mirage properties in terms of cash flow (and all properties owned by any operator outside Macau) until Wynn Las Vegas opened Encore and equaled Bellagio's room count. So I would dispute the idea that MGM Grand is the company's top brand. The current MGM Mirage leadership under Jim Murren has always been loyal to the MGM Grand side of the company and, I think, resented the view of many in the industry that the top two Mirage properties were superior to the Grand. My perspective is that the company has chosen to highlight a decaying brand associated with old -- albeit great -- movies and two giant Las Vegas casinos, one of which suffered from a massive fire and the other which is more massive than excellent. They should have kept the MGM Mirage name unless they are planning on selling Mirage, and then they should change the name after they sell it.
"So I would dispute the idea that MGM Grand is the company's top brand."
And I'm not disputing what you're saying. I'm just pointing out that MGM long ago decided that MGM Grand would be their flagship brand, so as they've been expanding outside Nevada they've used (for better or for worse) the MGM Grand brand for their casinos.
"They should have kept the MGM Mirage name unless they are planning on selling Mirage, and then they should change the name after they sell it."
And I still think this may be the real reason why MGM is dropping Mirage... It really might drop The Mirage! As I've said above, I wouldn't be too surprised at this point if they either sell it to Phil Ruffin or sell it to Harrah's. Mirage's internal financials don't look bad, and this may be the only way MGM doesn't sell it... But if they do, it's because it no longer fits in the company's model of a continuous strip (pun intended!) of connected casinos from Bellagio to Mandalay.
I view the name change as a good thing, but from a different perspective than most people.
With a corporate name change there will be the need to spend money with printing companies, sign companies, PR firms and law firms as well as various financial organizations.
The good part is that it puts money back into the Las Vegas local economy and into the local economies of where the outside consultants are located. Commerce is good for the country and local commerce will be good for Las Vegas.
So the silver lining in this is that someone somewhere in Las Vegas may get to keep a job because of the money MGM Mirage will spend on the name change.
I hear what you're saying but MGM has their own internal press so they'll do some stuff internally and then a lot will get farmed out to their agency and I suspect that most of that will be work done outside of Las Vegas.
Even if MGM does the printing internally, they still buy paper, ink and other supplies, usually from local vendors. So some money will make it into the community.
And if money goes to outside agencies outside of Las Vegas, well maybe someone from those agencies will have to make a business trip to Las Vegas to meet with MGM. And on that trip, they might spend money with cabbies or non-casino businesses. Again a few bucks might make it back into the local economy.
You gotta look for the silver lining, no matter how tiny it might be.
I don't mean to debate this issue but there's no guarantee that MGM buys it's supplies locally... Plus, the agencies stay for free when they come to stay in MGM's hotels.
Anyway, I get your point. I hope you're right and that local biz gets a boost.
Hey guys. I just did this Portfolio piece on the matter. David McKee's comments were particularly fun. http://j.mp/cyVRty
I think KK has owned MGM, in some fashion, for over 40 years. He is the brand, more than anyone else. Others started it, but nowadays KK is MGM and MGM is KK, especially for the younger people.
MGM isn't selling Mirage. Especially to Harrah's. I think it is insulting to MGM to think that Harrah's, with twice the debt load of MGM, can just pick off anything that comes along. MGM has smart leadership; just as smart as Harrah's. Just as Harrah's saw the addition of P Ho's revenue a bigger plus than the increased debt was a minus, so will MGM view the Cosmo of LV, when the markets will allow it.
You think that much of the public associate KK and MGM?
I would guess the average Vegas visitor, especially the young ones, have no idea who he is unless they read the Wall Street Journal.
I think the people buying the stock and making other investment decisions do.
Okay, here's the plan that brings order to the Universe.
MGM trades the Grand for Caesars, they take the name and the Lion accross the street and remake the Mandalay Mile into the new MGM Grand. Put the Lion in front of the pyramid and tie the Bay to Ex corridor even closer together. With work, not razing, all three of those properties could fit within a cohesive MGM Grand "vision".
The scariest part of this is that I haven't been drinking tonight.
are we talking about the failed cosmo deal with deutschebank?
nice to see they have 1 management contract in place. but all that middle eastern demand dried up pretty fast. i wonder if anything else is actually in development yet. they should try abu dhabi.
"MGM trades the Grand for Caesars" give up mansion and skylofts for a few penthouses? also trade joel robuchon for guy savoy. and give up a lot of rooms.
The thing about the company is that there's a three-way clash of cultures--between MGM Grand, Mirage Resorts, and Circus Circus Enterprises/Mandalay Resort Group. In my experience this has been much more significant than at Harrah's. I'm not sure exactly why but it might be because each of the three MGM components had a much more articulated corporate culture pre-merger than the remains of Hilton/Park Place/Caesars Entertainment.
I'm guessing that the name change has something to do with this, but since I'm not inside the board room, it's just speculation.
"MGM Resorts" works better for me, too. "Resorts International" makes me think of the first casino in Atlantic City, which is ironic given MGM"s current situation re: the Casino Control Commission.
If Murren is positioning MGM to sell The Mirage, what are his chances of moving it at his stated price point of 12X cash flow? That's a 2007 pricetag in a 2010 economy.
More goes into the value of a property than just the cash flow. While I don't think MGM wants to sell Mirage now, I'll play along.
If Mirage made no money, then I guess the property is worth $0? No. Besides the wonderful name Mirage has, perhaps even a better known name than Bellagio, just due to its age? But more importantly, Mirage is loaded with land. Between the huge pool area, Secret Garden, and Dolphin Habitat, and the huge setback Mirage has due to the large lake/volcano. While we'd all admit, that land isn't worth the $32 million per acre that Elan paid, its surly worth $20 Million in the heart of the Strip. I'd say Mirage has 75ish acres, isn't unreasonable at all. You've could blow up the building, and get $1.5B out of Mirage easily. If MGM sold Mirage for anything under $2B, I'd be highly pissed as a shareholder. Hunter and I had a long, slighly heated discussion about this on Twitter, and we don't exactly tend to agree. But I'm a little surprised by the fear people still have when it comes to MGM. MGM isn't anywhere near in as much trouble as they were 12-18 months ago. In fact right now, today as we are talking, MGM stock just broke its 52 week high. And if you look back as several post over the last several years, it was I who, doubted City Center. Even as MGM is a great operator, they are not a great builder. I've seen CC, and I was right with my gut. I'm not impressed, and by the numbers it's putting up, most people aren't either. A year from today, Bellagio will still be MGM's flagship property, not Aria. However, CC can and will not sink MGM. If you go back to 2006, before Mirage had borrowed a single cent for City Center, their total debt was $13ish Billion dollars, and today after the opening of City Center, MGM Macau, MGM Detroit, less Treasure Island, MGM's total debt stands at $13 Billion dollars, yet they have FAR more assets than they had just a few years ago. MGM also has about $2Bish to gain from condo sales in CC. My point is this, City Center, even if it fails, didn't add enough burden and debt load to sink MGM. While it sure won't help things if its not successful, the other properties can carry it, should they have too. I can't recall the exact figure, but I think Murren said it had to do something like $3ish Million a day, and I don't think that's to crazy of a number.
One interesting point, if MGM does sell the Mirage, are any of the animals endagered/protected species? If so, they would not be likely to be included. The dolphins shouldn't be a problem, but what about the white tigers? I know six flags had that problem with Sea World when they bought it here and had to wait two years (to catch one in captivity, or leverage the right official).
Not that it would matter if someone like Harrahs got the property, as they'd be ground into meat for the buffet and rellocated for a diamond lounge, but it would be a bit sad to see that part of the history destroyed.
I know MGM-Mirage owns the dolphins which were imported with approval of NOAA, and the state more or less did Steve Wynn a political favour to allow then-Mirage Resorts to have them under the condition that Mirage allow Clark County schools to take complimentary field trips to see the animals.
The endangered species, I'm not so sure. Few of the white tigers are actually pure-blood (entirely white), most of them are officially mixed because Siegried & Roy had been having white tigers mate with other tigers to create a white tiger with black stripes, arguably so that people can continue to enjoy "White Tigers" (Sort Of) after the pure white species has passed on.
My guess is that many of the rare animals are legally owned by Siegfried & Roy, collected before state and federal laws tightened, and so they and their offspring are grandfathered in. That means less trouble for the hotel's owner and the animals could simply return to S&R if MGM or Ruffin or Harrah's or somebody else decided to raze the forest out back to make room for a Second Hotel Tower, Gilley's, or Diamond Lounge. :b
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