“We are certainly not looking to aggressively sell assets, but the point is that we do have assets that are attractive and we are going to be very responsive.”
That's MGM Mirage CEO Jim Murren's way of saying that he's not going to hold a fire sale … but don't be shy with those purchase offers, either. He's identified drastic debt reduction as his top priority, which partly explains why the company is spinning its undoubtedly mortifying The Harmon fiasco as A Good Thing, Really, as it brings the moving target which is CityCenter's budget down to a svelte $8.6 billion … assuming they don't have to refund those $88 million worth of Harmon deposits. (Murren may have conceived CityCenter but it is his perceived rival, CityCenter CEO Bobby Baldwin, whose resumé is much likelier to be blotched by the forced truncation of a planned 47-story tower into a 25-story stump.)
CityCenter: Now with 50% less Harmon!
Elsewhere, Murren contends that MGM could have gone back and finished The Harmon at its intended height. Well, yes … but even if the bankers are reopening their checkbooks, as Murren says, it's difficult to imagine a scenario in which they happily agree to pile additional hundreds of millions in debt onto a project that still isn't fully funded. Unspecified Chinese banks are reportedly being supplicated for those elusive last few (millions of) dollars.
Perhaps Murren was being a mite tongue-in-cheek, as the odds of financiers underwriting a Harmon do-over are probably somewhere in the same realm of probability as flying pigs and Guy Laliberté admitting that Cirque du Soleil screwed the pooch with Believe. (Mais non, it's nothing that as much as six months of "fixations" can't cure, mes amis.)
The James Packer Jinx redux? This isn't reassuring: Soon-to-be Cannery Casino Resorts owner James Packer's Crown Ltd. is promising "a new Las Vegas-based senior management team and board" and that "many" current managers and employees will stay. Furthermore, the company will apply business models that have worked for it in Australia, Canada and Macao to improving the not-exactly-struggling Cannery performance.
Now, this is what's called fixing what isn't broken. Nor has the Vegas market been kind to operators who have come here from overseas and attempted to reinvent the wheel. One cautionary example Packer hopefully will heed is that of Swiss Casinos, whose somewhat pretentious Resort at Summerlin tanked unmercifully, to much glee within the industry. Swiss Casinos made it plain it didn't want to hear Word One about what worked in Las Vegas, they had it all figured out. Their pride went before a fall into Chapter 11. Ironically — or prophetically, perhaps — Packer will inherit the erstwhile Resort @ Summerlin, which Cannery manages in its current guise, the Rampart Casino.
Less the value of that management contract, Packer is paying $600 million apiece for two locals casinos and a Pennsylvania racino. That seems more than a bit steep, even in a good economy, but looked like a much better idea at the time it was hatched, before Wall Street did a face-plant and hindsight became 20/20.
Well, at least Packer was able to get a plane ticket to Las Vegas this time. (He missed his previous scheduled appearance.) That's a good start.
