GamingToday publisher and founder Chuck Di Rocco, who passed away in March, was famous for his "Heard on the Strip" column, which tapped insider sources for the latest industry News Before It’s News. His column in January 2003 was uncanny in its precise predictions of the wave of mergers that would hit the industry.
Note (at right) the passage in which he describes a mid-sized firm being bought by a large one. Which could easily have been Harrah’s purchase of Jack Binion’s Horseshoe!
This could be the year of the merger
MERGERS, MERGERS, MERGERS! That’s what our pipes and rosebuds are telling us to expect in the months ahead as 2003 unfolds.
"I think you’re going to see a lot of action in the middle-sized properties this year," said one in-the-knowster. "Some will merge to form bigger entities and I predict that at least one will be acquired by one of the Big Boys."
A rosebud had this to say: "Don’t be surprised to see a merger announced this year between a couple of the top players. With the economy the way it is and expenses continuing to rise, everyone is looking at all the possibilities. Good operators are the key to success."
Those sentiments were reflected by a pipe: "Keeping expenses in check is the real key to success. The people at MGM Mirage (MGG) know that. Check it out. This past year they increased their EBITDA nearly 20% on basically the same cash flow as the prior year. You can attribute that to sound operational skills of upper management.
"Companies that can’t run a tight ship are going to be looking at joining those who can, either through merger or acquisition."