Corporate quarterly earnings report conferences are usually dominated by high levels of optimism and punctuated by moments of unabashed cheerleading.
Charles Dickens couldn’t have written about them. No matter how tough the competition or rotten the market conditions, it’s always the best of times. Like most weather forecasts in Las Vegas, it’s a safe bet the future will be “mostly sunny.”
But what happens when the specter of tragedy enters the picture?
How do you talk about business in the wake of unspeakable violence?
We are watching that question be answered at MGM Resorts International. Its corporate culture and the character of its leadership are being tested in the wake of the October 1 mass shooting on the Strip.
In some ways MGM’s fourth quarter 2017 earnings report call on Feb. 20 was ordinary, but the fact is these aren’t the best of times at the company. It’s still recovering from what can easily be said were the worst of times for Las Vegas and MGM’s shimmering Mandalay Bay property.
It’s hard to drive past the building without contemplating that nightmarish event that took 58 lives and wounded more than 800. But it’s also true that Mandalay is a business, like others up and down Las Vegas Boulevard, and it’s open for business. It employees hundreds of fellow residents in this gambling and tourism factory town.
One of the corporation’s challenges, I suspect, will be learning how to talk about business in the wake of tragedy. It’s a delicate dance.
In the conference call, according to a transcript provided by Seeking Alpha, MGM Chairman and Chief Executive Officer Jim Murren focused on many of the standard topics related to the year’s performance and the final quarter. There was a lot of good news despite the challenges wrought by October 1.
It surely helped to be able to say you’ve just returned from the grand opening of a new resort in the Asian profit factory Macau. And he spoke of the company enjoying a “disciplined, unified view of strategy, creating and continuing to build one common approach to get service and firmly establishing a clear and unwavering set of values that guide both our behaviors and our contributions to the communities in which we operate.”
He added, “Despite the clear challenges we had in the fourth quarter, our earnings were relatively well protected, and we finished the year strong and we are excited about 2018 as well.”
He offered, “here in Las Vegas, this is the second time we talked to you since we experienced the great shock to our community in October, and yet our fourth quarter materialized as we expected, as we discussed on our last call – in fact it was a touch better.
“And I think that speaks to the power of our brands and the resiliency of our strong and nimble operating model.”
The company’s performance in the quarter, to no surprise, was down overall.
It also helped Murren to be able to point to a founder, the late Kirk Kerkorian, who brought an understated style and strong values to a Las Vegas casino business that’s never had an overabundance of their quality.
“You know he taught us to invest in our community, to encourage others to do so, and together the destination would grow and MGM would benefit,” Murren said. “That’s what he always said to us, and that’s still true today, and we are very, very excited about the future because of the collective investments that we and others are making.”
With the expansion of the Mandalay Convention Center, the popularity of T-Mobile Arena, greater convention space coming to Aria, the Monte Carlo’s rebranding as Park MGM, and the great possibilities of expanded legalized sports betting as early as this year, there was plenty to be optimistic about.
In response to a question by Barclays gaming analyst Felicia Hendrix, MGM Chief Financial Officer Dan D’Arrigo offered his view of the post-October 1 challenge.
“Yeah, I think when you look at it obviously, given the incident of October 1, we really had to kind of go off script of what we were doing throughout the first nine months of the year,” D’Arrigo said. “The team did as Jim mentioned earlier, a great job in executing and I would say there is a huge amount of recovery already within Mandalay that has taken place.”
Between the criminal investigation and civil litigation, October 1 will remain a part of the conversation in Las Vegas for a long time to come.
How do you talk about tragedy without dwelling on it?
How do you move forward without appearing disrespectful?
It’s something, I think, we’re all learning to do.
John L. Smith is a longtime Las Vegas journalist and author. Contact him at jlnevadasmith@gmail.com. On Twitter: @jlnevadasmith.
