Jim Murren was a factor in as many headlines last week as LeBron James during the NBA playoffs.
He and his casino company dominated the newswire.
There are a few mentions, however, that Murren, chairman and CEO of MGM Resorts International, would like to give back.
MGM cut partnership deals for sports wagering and online gaming with UK gambling giant GVC Holdings and regional casino operator Boyd Gaming Corp. and entered into a data/licensing deal with the National Basketball Association that will likely pave the road for future partnerships in the fast-changing U.S. sports gambling marketplace.
The NBA deal could be the first nail in coffin containing the integrity fee idea pushed by sports leagues.
Murren said Thursday MGM has an opportunity to rule U.S. sports betting.
“We have the brands, we have the people, we have the market,” Murren said during MGM’s quarterly conference call. “What we’re looking for in this race to market share was how to best provide the best experience for the gaming customer.”
On the downside, MGM’s stock price was pounded with the rest of the gaming sector over two storylines – less than stellar gaming numbers from Macau in July and projected bad third quarter numbers from the Las Vegas Strip.
Also, Murren’s apology letter to MGM employees two weeks after the company initiated legal proceedings against victims of the 1 October shootings in Las Vegas became public. MGM isn’t seeking monetary damages but wants protection from paying potentially millions of dollars in liabilities to survivors of the shootings and families of the 58 who died.
Everything involving MGM last week was intertwined, and Murren, CEO since 2008 and a company executive since 1998, was squarely in the middle.
NBA Commissioner Adam Silver, left, and MGM CEO Jim Murren at the press conference in New York (Photo via ESPN.com)
Even as he sat next to NBA Commissioner Adam Silver in New York on Tuesday to announce the licensing deal, the first such deal between a major U.S. sports league and a casino company, Murren couldn’t escape Monday’s headlines.
A reporter asked Silver if he “had any qualms in forming a partnership” with a company that was suing shooting victims in Las Vegas.
Silver jumped to Murren’s and MGM’s defense. “As a lawyer,” he said, he “recognized that sometimes a legal strategy does not always lend to the best communication strategy.”
Silver said he saw the toll the shooting took on Murren and MGM.
“I dealt with Jim, frankly, the very day after the shootings took place last fall. And I would just say, I can’t imagine a company that could’ve responded in a more appropriate and heartfelt way than Jim did to those shootings,” Silver said.
On Wednesday, Murren appeared on the nationally syndicated The Dan Patrick Show, where he said the sponsorship deal could lead to Las Vegas landing an NBA franchise.
“We had a relationship with the NBA before this,” Murren said, citing MGM’s sponsorship of the NBA Summer League and ownership of the WNBA’s Las Vegas Aces. “If a team in the league felt being in Las Vegas would be a benefit to the league, I think that would happen.”
A few hours later, Caesars Entertainment’s second quarter earnings conference call shone a negative light on MGM. Caesars officials said Las Vegas “room rate pressure” in July would hurt third quarter results.
Analysts seized on the remark. Nomura Instinet analyst Harry Curtis termed it “the cat’s out of the bag,” which caught Caesars’ executives off-guard.
Caesars’ stock price fell almost 25 percent during the call. CEO Mark Frissora said a decline in events and lack of conventions in July compared to a year ago caused room prices to drop. He all but blamed MGM for the dip, saying “there are certain entities on The Strip” that have more rate pressure than others.
“I don’t call out competitors on any call, that’s for the competitors to discuss and for you guys to look at the rates,” Frissora said. “But bottom line is we had some rate pressure from similar competitors.”
A day later, MGM was on the hot seat.
Murren addressed the expected declines in revenue per available room (RevPar) up front. He said MGM’s third quarter in Las Vegas would be down by between 5 percent and 7 percent. The next three questions dealt with July and the non-traditional RevPar metric analysts use to measure profitability.
“For God’s sake, you guys get so worked up about a few weeks. It’s just unreal,” Murren said. “Do we think that there’s anything going on in Las Vegas structurally that would cause us concern? The answer is no, because we see what’s going to happen in the fourth quarter.”
Murren then spent the last five minutes of the call – speaking unscripted – saying repeatedly that one month doesn’t make a year.
“We had foreshadowed a tough third quarter three months ago. It came in worse than we thought,” Murren said. “You can take that information into the fourth quarter where we see the citywides up and we see what we see in our books. Since we have over 40,000 hotel rooms here, it’s probably going to be the case for Las Vegas.”
And be assured, MGM will find itself in a lot more headlines.
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgamingreports.com. Follow @howardstutz on Twitter
