This morning, Nevada based MGM Mirage released their second quarter results:
A loss of $212 million for the quarter, along with lower revenues as well. Despite taking a big hit this quarter, some analysts believe MGM Mirage has turned their balance sheet around and should start to see some upside in the coming quarters. They miraculously were able to navigate a very difficult set of conditions this Spring without resorting to an asset fire sale.
Their massive City Center project opens in phases starting in October.
A very tough quarter for the Las Vegas based operator - 20% reduction in net revenue. To their credit, they don't sugar coat it - things are tough in gaming and these results reflect that.
If they hadn't had some of the TI sale figures in this quarter, things would have looked even worse.
REVPAR took a big hit - looks like they had to significantly drop rates to stabilize occupancy.
Dave Schwartz has an interesting article where the talks about a piece from Wired that is discussing the proliferation of free services in business, especially on the Internet. Dave spins that into a gaming business narrative and breaks it down for us.
We're back with roundtable #2 - this time around the topics include Crown investing in Harrah's/Station, MGM Grand Detroit, Pure being raided by the IRS, Cuba as the next Macau and more.
The participants include:
David McKee - http://www.lasvegasadvisor.com/blogs/dmckee/
Dave Schwartz - http://www.dieiscast.com
Chuck Monster - http://www.vegastripping.com
Direct Download: http://media.ratevegas.com/36-podcast_02212008.mp3
Some info on MGM Mirage's quarterly results, announced today:
In Business Las Vegas did a fascinating interview with MGM Mirage President and COO Jim Murren last week. It is a highly recommended read that gives great perspective into the thinking that has driven recent deals with Kerzner, Dubai World and others.
It's clear that Terry Lanni and Jim Murren 'get it' when it comes to the biz side of the gaming industry - they are re-defining the standard practices that have been common knowledge in the industry. Business as usual? Not anymore.
From partnering with interesting companies to big ambitious projects like City Center in Las Vegas, they are bringing techniques that have worked well in the general hospitality industry to gaming and it seems to be paying off in spades.
Personally, I'd love to do an interview with Murren but MGM MIRAGE sometimes looks down on Internet media, even those of us with larger numbers than some print publications. I'm hoping one of these days these companies will wake up to that. They're not as bad as some companies but they could do better in this department.
Our second time using Talkshoe.com and it was a lot of fun. Regular readers like Detroit1051, Mike E, Brian Fey, mike_ch and BarbaryKevin were all in on the action.
We covered a broad range of issues, from Cotai, Harrah's, Wynn Resorts, Las Vegas Sands, Palazzo, Encore, IGT and a lot more.
During the show we talked about Chuck's Macau diary. That link is here: http://www.macautripping.com
MGM Mirage made a few changes in the executive suite which they announced today.
First off, the extremely capable Jim Murren has been promoted to President and COO of the company (from President, CFO, and Treasurer). Murren came from Wall Street and is probably the most responsible for MGM Mirage being a model for other gaming companies to follow, especially when talking about reporting. Murren will also oversee all properties except for those that are part of the 'City Center Campus'.
Bobby Baldwin has been moved into a new position - Chief Design and Construction Officer. He'll oversee all new construction and capital improvements in the US. He also will oversee the 'City Center Campus', which includes City Center, Monte Carlo and Bellagio.
Lastly, Dan D'Arrigo has been promoted to EVP and CFO.
All of these positions report to Terri Lanni, the company's Chairman and CEO. Additionally, John Redmond, who had been running the properties formerly in the MGM family, including MGM Grand and NYNY has resigned as planned.
Unrelated, Harrah's has scheduled an announcement for tomorrow regarding entertainment changes at their resorts in Las Vegas.
MGM Mirage had a big quarter but a large portion of the ground they gained were from one time events - property sales in Primm and elsewhere.
Still, income from continuing operations was also up - the company is healthy and I still consider it to be one of the best run in gaming - a model for the industry in that regard.
Revenues hit $2.11 billion and earnings were at $360 million with those property sales factored in. Incoming from continuing operations was $182 million, up from about $140 million in the year ago quarter.
REVPar on the Strip jumped 7%. I hope to have property specific info soon.
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Detroit is a 2,000 mile drive from Las Vegas, but it's an interesting market of only three casinos (plus Casino Windsor across the river in Canada) with revenues of $1.3 Billion in 2006. MGM Grand $490 Million, MotorCity Casino $469 Million and Greektown $345 Million. The three commercial casinos are moving into their next phase. The casinos were authorized in the mid-1990's as a source of tax revenue in struggling Detroit. Many operators presented proposals, including Steve Wynn. The three selected were MGM Grand, Mandalalay Resort Group and the Sault Ste Marie Chippewa tribe of Michigan. The three selected companies were required to have local partners, but in effect, the local partners had little power. They did, however, make a lot of money from the very successful casinos. The law permitted the casinos to operate in temporary or interim facilities while they planned and built permanent casinos with hotels. Like many political projects, hotel requirements changed and ultimately were watered down to 400 rooms each. Detroit's former mayor had visions of the casinos being together on the Detroit River, but there was so much opposition that each company went its own way in separate locations. Two of the three casino hotels will open by the end of this year.
More on Detroit's progress and the status of the projects after the jump.