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Assessing the Wynn-Wynn situation

Feb 3, 2009 5:01 PM
Gaming Insider by Phil Hevener |

The best efforts of Steve and Elaine Wynn have generated big dividends over the 30-40 years of their life in Las Vegas, but this intriguing partnership may be rapidly unraveling if the observations of those who know them can be accepted at face value.

Steve Wynn is the chairman and CEO at the publicly traded Wynn Resorts. Elaine Wynn has been a member of the board since the present company was formed in 2002. She was a member of the board at the previous Wynn company, Mirage Resorts, for 20-plus years before that.

But more than that, she has been a big influence on her husband, that creative giant with the mercurial temperament. The Wynns’ may be the closest thing Las Vegas has to a home-grown celebrity couple.

She has done much more than merely listen attentively to whatever points her husband was addressing from time to time. Her input has been everywhere. The Wynn Resorts website makes a point of that, describing her as an "active collaborator in the operation" of the Las Vegas properties.

And that was way before the first of those rumors about Wynn supposedly giving his heart to another woman.

How will this play out? What might it mean to the company and its shareholders? Important questions all, questions that company officials, including Steve and Elaine were making no attempt to deal with last week, possibly because they do not know the answers, possibly because they figure it’s no one’s business but their own for the time being.

I’m guessing this attitude won’t fly for long in a business world involving multi-billion-dollar resorts in Las Vegas and Macau.

"I see no reason to panic and sell my stock," a shareholder who asked for anonymity confided, "but as low as the price is, it’s difficult to think of buying  more till I see how this gets handled. They’re both smart people, but even smart people can screw up a good thing when they start thinking with something other than their heads."

Similar questions have been raised during recent weeks because of the focus on Apple’s Steve Jobs and whatever his health issues may be and how all that might affect the company. It’s because the success of companies like Apple and Wynn have been closely identified with the personality and drive of their top executives that extraneous factors now draw concern.

MGM, on the other hand, scarcely seemed to miss a beat when its former chairman and CEO Terry Lanni suddenly resigned late last year.

A source who has known the Wynns for years says, "Elaine has been a powerful moderating force on Steve’s personality …  He can get a bit volcanic from time to time."

Thinking about that for a moment, adding, "I don’t know what it might mean if he loses the kind of influence she has been able to exert."

That kind of uncertainty is never helpful to a public company, particularly one whose marketing and creative efforts are perceived – for better or for worse – as resting on the shoulders of one person.

A third source who remembers the Wynns’ separation and divorce in 1986 and eventual re-marriage in 1991 – "The divorce did not work out" – characterized them as "soul mates." He followed that with, "It’s hard to speculate about the consequences of fracturing something like that."

The Wynn Resorts stock drifted down to just above $30 a share last week, just a bit above its 52 week low of $28 a share. Perhaps it was due to a lack of guidance from the company. Neither Steve nor Elaine responded to phone calls late last week and a company spokesman offered nothing more than the terse explanation that the personal lives of company officials were not going to be discussed.

That’s not an acceptable reaction for something like this, but maybe no one could think of anything to say for the moment.

Regardless of how it turns out, the combined or separate efforts of the two have been felt throughout the Las Vegas community. Most of the company’s community outreach programs appear to have been in Elaine’s hands. 

Her influence has been felt at the heart of operations. Months before Wynn Las Vegas opened in 2006, Steve credited Elaine with design elements such as the tree-covered "mountain" in front of the resort.

Elaine told me in a conversation at the time that the idea came to her as a means of helping Steve meet one of his goals … to control the view of surroundings that guests would have from the Wynn property. Her analysis of the success of Bellagio had told her that most of the business was generated by "dedicated guests." Yes, there were a lot of walk-ins, but they would not be deterred, she said, by a barrier that encouraged them to go inside rather than hangout on the sidewalk.

But her involvement did not begin there; years earlier she took on the responsibility for successful arguments before the Gaming Commission that resulted in the licensing of former poker pro Bobby Baldwin as a vice president at the Golden Nugget. Baldwin had previously been rejected by the Board because of his associations with personalities from the world of illegal gambling.

The first response last week of a former Wynn employee who heard of the separation: A "hmm" and "This could be very expensive."

Steve and Elaine have seldom failed to create big successes wherever they chose to invest their time and energy. Which means there is at least a little something for everyone in the current drama – those who care about each of them as individuals and those who have been touched in some way by their resorts.

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