Two Way Hard Three | Las Vegas Casino & Design Blog

July 17, 2011

SIMPSON ON VEGAS #026: Remembering Lanni

Posted by Hunter

This time around, Jeff reflects on Terry Lanni's role in Las Vegas and his own interactions with him.

Lanni died Thursday.

Continue on after the jump.

Terry Lanni was not a perfect man but he was a great man. He was a community and industry leader and -- in the best way -- a company man. He was a man's man with a sharp wit who could laugh at himself. A man who could admit his mistakes and worked to right his wrongs. A man who surrounded himself with talent and allowed that excellence to bloom.

The newspapers have weighed in on Lanni's life and his industry peers have praised his career. Rightfully so. I covered Lanni from his comeback from his first retirement in 2000 until his eventual retirement two years ago, a decade that spanned some of the best and worst of Las Vegas history. Before I came to Las Vegas he had already had a significant career, serving as a top executive at Caesars World and then helping Kirk Kerkorian rescue his MGM Grand Inc. from its shaky start.

Lanni was called out of retirement when Kerkorian was buying Mirage Resorts, a pairing of companies that many thought would be tough to combine. Mirage, the bigger and more renowned company, had been Steve Wynn's baby, and many industry experts questioned whether the MGM Grand team would be able to harness the Mirage assets. Lanni moved quickly to boost morale at the former Mirage properties: Changing the company name to MGM Mirage, keeping former Mirage executives in charge of the Mirage properties and creating a corporate structure that kept the Mirage properties separate. Results improved quickly and Bellagio solidified itself as the biggest cash-flow generating casino resort in the city while other Mirage properties thrived. A troubled start at Mirage's Biloxi, Miss. property, Beau Rivage, was reversed as MGM Mirage management learned how to operate the Gulf Coast's best resort.

What most impressed me about Lanni's integration of the two companies was his sensitivity to the feelings of the Mirage Resorts employees, the vanquished side of the acquisition. Some MGM Grand executives clearly felt like they were the victors in the takeover and wanted to assert their control over Mirage, but Lanni took pains to describe the company as two equal sides and put admired Bellagio boss Bobby Baldwin -- Wynn's former right hand man -- in charge of the Mirage casinos. Sure, the MGM brass including Lanni and CFO Jim Murren moved their offices over to Wynn's former imperial digs at Bellagio, and their executive parking garage code was the date of the Mirage takeover. But the Mirage people felt respected and MGM Mirage shareholders benefited.

Lanni also impressed me at the time of the takeover when he and his company came under attack by the leaders of the Las Vegas chapter of the NAACP for failing to hire enough African-Americans, especially in the executive ranks, and for failing to hire minority contractors and buy from minority-owned vendors. Lanni at first bristled at the attack, but promised to quickly come up with the statistics that would refute or support the accusations. Lanni followed through and publicly apologized when he admitted that the company's record of minority hiring, contracting and purchasing wasn't very good. What was most impressive wasn't Lanni's honesty -- it was his follow-through. Within the next few years Lanni had created a best-in-the-industry diversity program that revealed the company's diversity statistics with yearly updates, trained thousands of employees with expensive, immersive training and created a culture that nurtures diversity. Despite promises and occasional, brief imitation from competitors, no other big casino operators have come anywhere close to MGM's diversity efforts -- to Lanni's credit and competitors' shame. The company's ongoing diversity efforts will be a test of Jim Murren's and MGM Resorts' willingness to honor the memory of Terry Lanni. Follow-through and continued statistical and qualitative diversity improvement will be a great monument to Lanni and his pioneering role.

I was gratified that Lanni several times credited me and my role in writing about the initial dispute with the NAACP as helping to keep his feet to the fire. Since that time I have written much about the subject and had reporters who work for me do the same but I've been frustrated by executives like Caesars Entertainment's Gary Loveman and others who have promised to publicly reveal their companies' diversity statistics but have never done so. Some bosses have said that they know the media will focus on the numbers and which companies do better and which do worse, and that they don't want to provide the means for the media to do so. (They're right, but so what? That's our job.) Lanni said, to his credit, that the numbers are the only way to determine where you stand on diversity and whether progress is being made. MGM Resorts honors Lanni's memory by continuing to release its numbers and the rest of the operators who refuse to publicly reveal their numbers bring shame onto their companies and the industry.

Almost every casino CEO who took on debt to build or expand during the last third of the last decade was hurt by the implosion of the real estate market and the cratering of the economy, and Lanni was no exception. Some of his decisions can be criticized, especially with 20-20 hindsight. Borrowing to buy Mandalay Resort Group, building CityCenter and partnering with Pansy Ho can all be questioned, but the external economic factors clearly were critical. The Ho deal will end up costing the company New Jersey -- and possibly other jurisdictions -- but the big stake in Macau looks far more valuable, at least for now. The Mandalay Resort purchase, for the first couple of years, looked like a genius deal when Strip real estate prices skyrocketed and Las Vegas tourism metrics kept increasing. But as those numbers turned sharply down and the company's debt load became a major burden, the deal no longer looked as sweet. Eventually, I think, the real estate and Las Vegas exposure will be a positive again, if the company can tough it out until a real economic rebound. Last, CityCenter. Lanni's deal to sell a half stake to Dubai World probably saved the company. It's hard to say that the development will be a net plus but if MGM can buy out DW's share of CityCenter for a pittance the company will be poised to capture big upside.

One of my last lengthy conversations with Lanni was about the state's over-reliance on gaming taxes and the need for Nevada business leaders to back a broad-based business tax. A mainstream Republican (back when that meant a pro-business Republican who was willing to compromise and govern), Lanni was frustrated by reflexively anti-tax business leaders. He said he was willing to fight for a broad-based business tax. Unfortunately his health prevented Lanni from fighting until he won. With Nevada's political leadership unable or unwilling to enact a broad-based business tax, MGM's Murren and like-minded casino bosses should band together, in Lanni's memory, and fund a voter initiative that would create a broad-based business tax that would adequately fund education and other important services.

I am glad I got the chance to learn from and write about Terry Lanni. He was a great executive, one who knew how to delegate and when to take charge. He was a good man and Las Vegas is better off for his having shared so many years of his life with the city we love.

-- Jeff Simpson, July 2011


Read archived comments (5 so far)
July 17, 2011 7:27 AM Posted by Paolo

It was great learning more about Lanni through this post. Most other media outlets seemed to just phone it in, likely by people who didn't even know the man. Great work Jeff.

July 17, 2011 8:04 AM Posted by Chris Hall

Jeff, thanks for this excellent piece on Lanni...and Hunter...thanks for offering a venue for the brilliance of Jeff and Dr. Dave to flourish.

July 17, 2011 9:01 AM Posted by mike_ch

While the book isn't the most accurate Vegas book ever written, I thought it was interesting how Winner Takes All made the Mirage purchase to Lanni's credit with Kerokorian in the background getting more and more hungry for the purchase in the final hours as Mirage upped the pricetag and MGM's people began getting nervous.

By contrast, the Mandalay talks are driven much more by Murren on MGM's side and practically sound like they were initiated between the two executives' interest in contemporary art and culture. Tensions are higher and there's some miscommunication, Kerkorian seems nervous and MGM's attorneys provide a brief roadblock. It's similar to the drama they have been giving the business pages the past few years.

Lanni's legacy is ultimately the company's mergers and acquisitions, which have been of questionable wisdom lately and frequently faulted for the stagnation of rooms, amenities, and even entire resorts on the Strip. However the Mirage merger made a lot of sense for the company, while the Mandalay one and the resulting Harrah's action was when the boulevard started to be monopolized.

I have to wonder how involved Lanni was with the Treasure Island sale? It appeared in the press about one month after his resignation. Ruffin makes it sound very fast, but I can't imagine Lanni wasn't at least behind trying to find a seller, which could explain why he was somewhat slow to address the growing inquiry about his educational records and then stepped down quietly.

July 17, 2011 10:02 AM Posted by Jeff in OKC

I second Chris Hall's comments. Thanks to all involved.

July 23, 2011 6:17 PM Posted by jinx

Great stuff Jeff, a very nice piece on an executive that certainly seemed to have earned the respect and praise of his subordinates and his peers. Not an easy task in a city so focused on competition.