With the Federal Trade Commission approval of the MGM Mirage-Mandalay Resort Group merger imminent, it would be helpful to examine some of the early fallout of the largest gaming transaction in history.
For starters, we can expect some movement of property managers, according to sources close to the powers that be.
Mirage Resort Division President Bobby Baldwin will probably move into a corporate level office and give up duties that have also kept him supervising the Bellagio.
Bill McBeath will likely leave The Mirage and take over at Bellagio.
Bill Hornbuckle is believed ready to come out of "retirement" at MGM Mirage and go back to running one of the properties. He formerly ran both Caesars Palace and MGM (at different times) but has recently been overseeing some of the marketing and planning work.
As for whether the Mandalay properties will be supervised by either the MGM or Mirage division, there is evidence that Mandalay Bay may fall under the MGM banner while Monte Carlo will go to Mirage.
Top executives for Mandalay Resort Group will be looking for new jobs, but they may not go far once the sale of their company is completed.
The group that includes Glenn Schaeffer, Mike Ensign and Bill Richardson may stay in the gaming business via a relatively small (for the moment) private company, something like their former company, Gold Strike Casinos, which was merged with Circus Circus Enterprises and subsequently morphed into the Mandalay Group.
This scenario meshes nicely with the thinking of industry watchers who believe Ensign would like to remain in the business, but that he has little appetite for the spotlight and requirements associated with public companies.
In contrast, Schaeffer is comfortable with the news media and is a favorite with bankers and Wall Streeters. The two executives have, as some call it, a synergistic managerial relationship.
Moreover, the Mandalay bosses would have little trouble going to the financial community for whatever they need to make a big splash once the MGM and Mandalay combination is completed.
If they do joint venture another gaming company, there are plenty of stand-alone properties out there — hotels and casinos that are available to the right buyers.
Ensign and company could follow the same script that worked nicely before — start small and see how far they can grow. Ensign and Richardson were formerly associated with the late Circus Circus founder William Bennett. Schaeffer joined them via the Gold Strike merger in the mid-1990s. The "three amigos" have worked well together and there’s speculation they can start anew.
Harrah’s on deck
The same thinking also probably applies to the new company that will come out of the combination of Harrah’s Entertainment and Caesars Entertainment.
You can just about bet on the expectation that there will be another flare-up of speculation that Harrah’s wants to sell the Rio.
Anything is for sale at the right price, of course, but the Rio is making a lot of money and has more than a hundred acres of real estate.
Within the Caesars organization, at least two property bosses are reported ready to leave their present employment and head toward what they see as greener pastures with other companies.
We’ll have more on the Harrah’s-Caesars merger as we get closer to approval, which is expected by the end of February.