Murren sacked

MGM Resorts International canned CEO Jim Murren yesterday, while nobody was looking, promoting Bill Hornbuckle acting CEO and president. Hornbuckle should have been Murren’s heir apparent but the exiled CEO had preferred to go on a candidate search. MGM explained the coup d’etat as “to provide continuity of leadership for the Company,” which doesn’t make much immediate sense on the face of it. Replacing Murren as chairman of the board is Paul Salem, who chairs the real estate committee of the company, which has precious little real estate left to sell. Salem said, “The nation is facing an unprecedented crisis, causing the travel and hospitality industry to grind to a near halt. It is clear that once the threat to the public health has subsided and we are ready to reopen our resorts and casinos, it will take an incredible effort to ramp back up. We believe continued steady, skilled leadership is needed in this time of great upheaval and uncertainty. Bill is one of the most experienced operators in the business and we have confidence in his ability to bring this company back online.”

The implication is certainly that that the uncertainty over when Murren would actually leave was complicating the decisionmaking process. But did the outgoing CEO provoke the board’s ire by nixing an (ill-advised) $1.25 billion stock buyback? MGM’s going to need that cash now and Murren was wise to reserve it. Either way, Murren fell on his sword gracefully, saying, “I fully support accelerating the planned leadership transition to help MGM Resorts address the rapidly changing environment. I have great confidence in Bill Hornbuckle [right],” even though he snubbed him for CEO presumptive, “and the management team to lead MGM Resorts at this critical juncture, as we have together through numerous hardships of the past.” Hornbuckle has certainly earned his spurs, having been president of Mandalay Bay for four years and chief marketing officer for three. He’s also one of the last holdovers from the Mirage Resorts era, having helped open The Mirage in 1989, and been COO of both Treasure Island and Golden Nugget Laughlin. He even ran Caesars Palace for an interim in the Nineties. The MGM board has chosen well. Mr. Salem, however, hails from private equity, a sector whose influence on gaming has been disastrous and which loves nothing better than debt. Let’s hope Salem is an exception to that rule.

As for Murren’s immediate future, Nevada Gov. Steve Sisolak (D) provided a soft (?) landing by appointing the ex-CEO as leader of his Covid-19 Response, Relief & Recovery Task Force. We can’t imagine a better choice.

Coronavirus won’t be cheap for Silver State casinos and hotels. Nevada Resort Association President Virginia Valentine forecasts $38.9 billion in lost business from Sisolak’s 30-day quarantine. She says the Las Vegas Strip is already out $2 billion in defunct convention traffic. In case you think Sisolak overreacted, we point to Massachusetts, where—after 646 reported cases and five deaths—Gov. Charlie Baker (R) is imposing a similar shutdown. You don’t hear Wynn Resorts CEO Matt Maddox complaining and rightly so. This disease is moving faster than governments can get out in front of it.

An unknown number of layoffs have taken place at Trump International Las Vegas. To his credit, the resort’s namesake has not rushed to bail it out, saying, “I just don’t know what the government assistance would be for what I have. I have hotels.”

* Macao‘s (at the time) seemingly draconian response to Coronavirus is now being looked at as an exemplar. The government has even put idled hotel rooms to good use, employing them house quarantined Macanese. As local hotelier Gert Noordzy writes, “Local residents are reassured that the authorities in Macau S.A.R have taken the crisis seriously from the beginning, based on lessons learned from SARS. We are watching in disbelief how Europe, Africa and the Americas have NOT used remaining time, resources and lessons learned to prepare for outbreaks locally.” For those who do, Heaven forbid, contract Covid-19, rest assured that there’s light at the end of the tunnel.

* Sir Sol Kerzner has died at age 84. The pioneering gaming mogul was primarily active in South Africa and the Bahamas, which put him off the S&G radar. However, he flirted heavily with Las Vegas during the boom years, tentatively partnering with MGM for a “CityCenter II,” to be built at the north end of the Strip (land now owned by Phil Ruffin). Kerzner was a child prodigy who simultaneously pursued boxing and a seat in the Johannesburg Symphony Orchestra. His most famous accomplishment was the Sun City resort in South Africa, a gaming mecca built in what was then the middle of nowhere. Of Kernzer’s accomplishments Nelson Mandela said approvingly, “He makes a difference everywhere he goes.” One of those places was Mohegan Sun, which got its footing thanks to finance from Sol and son Butch Kerzner. It was a risk that paid off handsomely.

* It looks like convicted felon Harvey Weinstein has found a way to avoid extradition to Los Angeles for further prosecution of his misdeeds.