Fortune, in the sense of “destiny,” supposedly favors the bold. Fortune, the magazine, holds no great affection for Boyd Gaming. Since the company is one for which I’ve long had high regard, it gives me no pleasure to report this. In its newest ranking of the most- and leased-admired companies in the U.S., Boyd comes out at the absolute bottom of the “Quality of Products & Services” category (with Penn National Gaming deemed the 10th-worst). While Las Vegas Sands and Penn are frequent visitors to various bottom-10 categories, Boyd really gets the harshest thrashing from Fortune, which unfortunately does not elaborate on its reasoning. Given some of the companies which were omitted, Boyd is Fortune‘s fool (pace Shakespeare) in large part because the truly crappy casino operators didn’t even qualify to be ranked.
Penn and Boyd were both in the dregs of the “Global Competitiveness” roster, which one must presumably blame on their lack of international presence … though one could reluctantly make a case for (unranked) Isle of Capri Casinos, which tried to go international and bombed. Boyd was also dissed in the categories of “Long-Term Investment,” “Management Quality” (along with Sheldon Adelson‘s Sands), “Social Responsibility” (w. Harrah’s Entertainment and rock-bottom-rated Sands), “Use of Assets” (w. Harrah’s), “People Management” (w. Sands) and “Innovation” (w. Penn).
No casino companies made the Top 10, although Wynn Resorts and MGM Mirage were the fourth- and fifth-most admired firms in the hotel/casino/resort sector. They also made the top five in “Social Responsibility” and “Global Competitiveness” (MGM, whose last-place showing Macao has done it no harm, apparently), as well as innovation, quality of product, people management and management per se (Wynn). Despite the numerous demerits handed them, Penn, Harrah’s, Sands and Boyd were all rated as “Contenders” (i.e.. #7-10 in their sector), which shows that — in Fortune‘s world — you can be a contender and a bum, with apologies to Marlon Brando.
Who cares? Fortune and its rival Forbes are the People magazine and Us Weekly of business. These beauty contests are meaningless. The real question is who is still standing at the end of the recession with a reliable customer base, and who ends up losing its properties in a series of fire sales because they can’t service their debt. After MGM has to sell a few of its resorts or surrender them to creditors, these accolades will be long forgotten.
Re Shakespeare: Fortune’s report, at least without any objective evidence to back it up, is “a tale full of sound and fury, signifying nothing.”
Any ranking that does not put Stations and Harrahs tied for last in the admiration rankings is suspect IMHO.
Most of Boyd Gaming’s properties in Las Vegas are for locals and in my opinion the locals market in Las Vegas will recover after the casinos on the Strip do. That could be 2-3 years or so down the road.
But if Fortune magazine put Boyd Gaming on the “gutter” list Stations Casinos also has to be on that list because just like Boyd they also cater to the locals market in Las Vegas, as Kevin Lewis mentions above. Boyd and Stations are in the same boat and it does not look pretty in the short term. They might need a buoy for some help.
Now on to Harrahs. Actually Mr. McKee summed up Harrahs nicely with his blog from a couple days ago entitled, “Pennsylvania: Give Adelson a Break; Harrahs latest excuses”.
As usual, Mr. Shakespeare says it best.