MGM fallout
is in the air!

Mar 1, 2005 9:11 AM

Now that the MGM Mirage-Mandalay deal has been okayed in Nevada, we should expect to see a rash of changes in upper-level personnel.

MGM bosses will not make public announcements about top-level resort management changes for another couple of weeks, but there’s nothing mysterious about what seems to be coming, according to several usually reliable sources.

Mirage President Bill McBeath takes over this week in a similar position at Bellagio. Treasure Island boss Scott Sidella is moving over to The Mirage, where a top-level casino executive is destined to take the helm at the TI.

Flamingo President Lorenzo Creighton is reportedly headed to New York-New York as that resort’s president, Felix Rappaport, readies himself to take over at the Luxor once the Mandalay acquisition is complete. Veteran MGM executive Bill Hornbuckle is said to be destined for Mandalay Bay.

Senior Mandalay officials are leaving that company, but some of them are expected to remain as major players in the casino industry, as part of a private rather than publicly traded operation.

Stepping away from the merger, it’s possible to put the deal into a broader perspective. Kirk Kerkorian made a point at the Nevada Gaming Commission meeting last week. MGM Mirage’s founder and principal shareholder noted the importance of continuing to move forward, especially in such a hotly competitive environment as the Las Vegas Strip.

Kerkorian and his accomplishments prove that imagination and big thinking never go out of style. And history bears him out.

The last quarter-century on the Strip says in definitive terms that casino owners who lost their ability to continue growing have either disappeared or been overtaken and passed by their thundering competition.

Companies such as Summa and Webb disappeared. Casinos such as Webb’s former Sahara, the Riviera and Tropicana still have their audiences but no longer project the front line appeal they once did. The Hilton casinos went through several incarnations and Hilton has, for the moment, disappeared from the Strip except as the operator of time share units.

As for those former big names on the roster of Strip resorts — the Dunes, Sands, and Desert Inn, to name a few — they’ve all disappeared, swallowed, so to speak, by the ambition of players who were not even blips on Strip radar in 1980.

Twenty-five years ago, MGM was one hotel and casino, albeit, a very large one. Current MGM Chairman Terry Lanni was president of Caesars World in 1980 and plotting the international marketing strategy that has been put on steroids since he and Kerkorian joined forces a decade ago.

MGM has invested billions on the Strip since 1980, as have the other companies that recognized opportunity and jumped in to become part of it.

But members of the Nevada Gaming Commission last week weren’t looking back. They were looking toward the future as they considered questions concerning competition and the effects of competition. What might it mean to put about half of the Strip’s hotel rooms and a sizeable number of slots and gaming tables in the hands of one company?

At some point in the questioning, someone noted to Kerkorian, "I like your track record."

Commission members seemed to agree. They gave the deal their unanimous okay, setting the stage for the largest merger in gaming history.

At least until Harrah’s completes its acquisition of Caesars Entertainment later this year. As we have seen, nothing stands still for long.