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Current flap about Terry Lanni -- much to do about zilch

Nov 18, 2008 5:03 PM

Gaming Insider by Phil Hevener |

MGM Mirage Chairman and CEO Terry Lanni’s usual knack for impeccable timing appeared to desert him during recent days. Someone somewhere was out to get him.

The weapon: an enticing trail of whispered accusations calculated to crack Lanni’s "crystal ball of integrity," accusations that can never be traced back to the originating source.

"No question about it," argued a veteran of top gaming industry jobs, who said he has seen this kind of thing happen before. "This was a take-down, an execution without bullets.

"Anyone who really believes Terry decided to spend more time with his family during the same week the Wall Street Journal runs its story, well … I’ve got some beachfront property in Oklahoma I’d like to talk to them about."

The announcement that Lanni will officially leave at the end of the month came a day after a reported late night conversation with Kirk Kerkorian and as Lanni and MGM President Jim Murren were finishing a meeting with other senior executives and property managers.

Time to turn all this over to a younger man, Lanni told everyone.

Lanni’s corporate bio has for years made reference to an MBA supposedly earned from the University of Southern California. That was incorrect, as the Journal pointed out. There was no MBA.

The Wall Street Journal went to town with this issue even as others responded with heavy sighs and a "so what."

But what the Journal and almost everyone else following this story failed to note is that this was not a new item. The discrepancy, or whatever anyone wants to call it, first came to light about 25 years ago during a New Jersey licensing review, according to former staffers at the state’s Division of Gaming Enforcement.

They remembered discussions about the issue, but the issue never surfaced long enough to generate the interest that might have produced a news story.

Another industry veteran argued, a day after the announcement of Lanni’s departure, "The man has a lifetime of making big things happen, but because he had previously preached to his own guys in MGM Mirage about the importance of this ‘crystal ball of integrity,’ he was vulnerable."

This may have been mixed along the way with the fallout from other issues. Another credible source claims impatience with the spiraling price tag at CityCenter, and the sad state of MGM stock led Arab investors in the project to make demands Kerkorian could not ignore.

Lanni had pretty much run out of good reasons to hang around. More time with the family was sounding pretty good. Time for younger men and minds to complete the heavy lifting, so to speak, is what he was saying.

Other possible factors in the resignation included the following from an executive outside MGM whose friendships and connections give him a good view: "Kirk has a low tolerance for pain because of the beating he took at Ford and the beating his MGM stock has taken. If the stock were still anywhere close to where it was when the Arabs paid $80 a share for it … well, Kirk might have a whole lot more tolerance if …." And his words trailed away.

But the inference was clear: These are times that weigh heavily on a principal shareholder’s decision-making.

Until now, Lanni had a knack for being in the right place at the right time.

Lanni was in the right place at the right time to land his first big job with the old Caesars World organization in 1977, a year after gaming had been approved in New Jersey and the big thinkers within Caesars decided the Atlantic City Boardwalk would provide the proving ground for a big statement.

 The company’s principal owners failed to survive New Jersey’s stiff licensing requirements and Lanni was suddenly in the right place at the right time to become president of the Caesars operating company with its classy resorts in Atlantic City and on the Las Vegas Strip.

 The 1970s and most of the 1980s were synonymous with the best efforts to attract the wealthiest gamblers from around the globe and no company did it better than Caesars.

When Steve Wynn designed and built The Mirage, he said he was taking aim at the Caesars end of the market.

Lanni left Caesars in the mid-1990s as the company changed hands passing into the control of operators who understand hotels better than casinos.

But he was, again, in the right place at the right time with a compelling reputation in June 1995, as Kirk Kerkorian looked for the executive who could help his new MGM Grand become all he wanted it to be.

MGM was a company with a big name and a big feel when Lanni accepted Kerkorian’s offer to oversee the not-quite two-year-old resort. But it was just one hotel and casino. Lanni supervised the process of putting the company on steroids as it bought Mirage Resorts in 2000 and Mandalay Resorts five years later. The long, convoluted process of locking the company into a Macau joint venture also began.

Over the last couple of years, Lanni and his team have green-lighted efforts to leverage the brands and non-gaming amenities of MGM Mirage into joint venture projects around the world, projects that will ultimately provide the basis for a separate company. And let’s not forget the much-discussed CityCenter development that is expected to open late next year.

Lanni quarterbacked the process that allowed the rise through the ranks of talents such as Jim Murren, Lanni’s expected successor as chairman, and Bobby Baldwin, the former world poker champ who seems to have repeatedly come up with winning hands and may do it again.

Whether he survives the reshaping of top management and in what position will be closely watched.

As for Lanni, few MBAs have ever accomplished more in a 30-year career in any industry. Too bad the accuracy of academic credentials from those long ago years at USC is getting any attention at all now.

"Terry deserves a lot of respect for all he’s done, all he’s accomplished." This was from a senior executive at another company that competes with MGM in a number of markets.

I have this picture in my mind of Lanni calling a press conference to take an approach I have always associated with the likes of the late Benny Binion and, of course, Bill Gates. He’d say that not only does he not have a master’s degree, but he never graduated from high school.

Not that any of it matters at this point.

One possible consequence of Lanni’s departure may be that New Jersey now has an opportunity to approve MGM’s Macau partnership with Pansy Ho, whose father Stanley Ho has triggered endless speculation about organized crime. Since New Jersey has never been inclined to hold the sins of one person against the rest of the company, lawyers could argue that there is no longer a barrier to the state approving the Macau partnership.

And that could keep the door open to MGM’s continued presence in New Jersey, whenever it once again becomes possible for the MGMs of the world to again borrow money.

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