MSM tunes Steve Wynn out

Has Steve Wynn jumped the shark? That is a question I never, ever thought I’d be asking. But an interesting thing happened in the wake of Winn Wynn Resorts‘ most recent conference call. Toward the end, he went on his boilerplate, splenetic tirade against his perceived oppressors. Wynn’s angry-billionaire shtick met with a collective yawn from the mainstream media. The Las Vegas Review-Journal didn’t mention it. Neither did the Las Vegas Sun. Nor did The Associated Press.

That’s right: Wynn’s usual media outlets are changing the channel, tuning out his increasingly incoherent version of socioeconomic policy. (He continues to enjoy the mewling sycophancy of analysts like Goldman Sachs‘ Janet Lu and Nomura Securities‘ Harry Curtis, however.) It’s a tired act … but a useful distraction when you’ve missed Wall Street‘s consensus projection for quarterly earnings — and when your weekend Wynncore room rates are down 11% early in the fourth quarter. Wynn can’t blame the Democratic Party for that last problem, not when Caesars Entertainment, Las Vegas Sands and MGM Resorts International are all seeing healthy weekend-ADR increases for the same period — a trend projected to continue through year’s end. For somebody reporting a 23% revenue increase and a profit of $127 million, Wynn is unaccountably peevish.

As is his wont, Wynn bragged on projects he could build — but won’t. (That’ll show those interlopers in the White House!) Earlier this year, it was a convention center on the old Desert Inn golf course land. Now it’s a $2 billion, 40,000-job megaresort on 18.4 acres that used to be the New Frontier that he could theoretically break ground upon between April and October 2012. Mind you, Wynn doesn’t own the land in question, for which owner El Ad Properties paid $1.2 billion in 2007 and earmarked for the defunct Plaza megaresort.

According to Wynn, El Ad will basically loan him the real estate, take an ocean-sized bath on its investment (much as Donald Trump just did on his cozy California cottage), and pay Wynn Resorts to manage and develop Plaza 2.0, or whatever it turns out to be.
Let’s leave aside the fact that’s an incredibly low-ROI proposition for El Ad, whose appetite for risk must be masochistic. Even though Wynncore revenues were up 4% last quarter, El Steve — who passed on Fontainebleau, remember — can read the balance sheet well enough to see that there’s no “pent-up demand” for new resort product on the Strip. Even looking five years out, both Boyd Gaming and Carl Icahn could beat Wynn/Ed Ad to the punch by years. He’s just blowing smoke.

Although Wynn’s degree of commitment is questionable, he did flash some ankle at legislators in Massachusetts and Florida. He’s playing the coquette, including some faux hand-wringing about potential tax rates. (Both the 25% rate voted through in Massachusetts and the 10% one on the table in Florida are far below the 39% Wynn pays in Macao.) He makes a convincing case for the potential of the Miami market, too long to quote here in full, including this theory as to why it’s been a non-starter to date: “It won’t happen with racinos, that doesn’t even get on the radar. It’s a false start, and it’s been a false start everywhere that they’ve tried it. It’s regressive, it’s homely, it may make a buck or two for the operators, but it does nothing, really, for the local economy … the fiction that it helps the horsemen is exactly that, a complete fiction, and that’s been proven over and over again.” He might want to explain that to his nominal buddies at the Florida Chamber of Commerce, who are taking a very starchy, provincial stance on the issue.
Wynn magnanimously passes up the opportunity to take a shot at “my neighbor Sheldon Adelson,” whose “a little bit more conservative” projection of Florida’s revenue potential used to be downright liberal — until Sheldon realized he’d probably have to share the sandbox with other casino operators. But Wynn’s own commitment phobia toward both the Bay and Sunshine states create a serious risk that Wynn Resorts could miss the boat twice over.

Across the Pacific, construction of Wynn Cotai is still in ‘any day now’ mode. Wynn gives a detailed explanation of the intricate minuet that is land-leasing in Macao. “[Y]ou don’t get to rush it or change it,” he says, in a veiled dig at rivals operators. Wynn’s staggering recall of elaborate design and engineering minutiae is the polar of opposite of Adelson, who has a reputation for merely issuing a few vague directives (X square feet of meeting space, Y amount of retail, etc.). El Steve’s practically got his Cotai blueprint committed to memory. However …

… were he building the same casino-hotel stateside and was subjected to similarly Byzantine governmental “choreography,” does anyone believe for a minute that he’d “live with it and respect that process”? Ha! Wynn would be pounding the conference table and bellowing into the phone about “what regulatory load they’re going to heap on us,” ad infinitum.

Which brings us to the CEO’s latest blame-America-first snit. Alluding to Illinois‘ radical hike of casino taxes during the klepocratic Rod Blagojevich administration, Wynn warbled, “That wouldn’t even happen in China. I mean, that’s really rough.” Yes and it’s also representative democracy at work, whether one likes the outcome or not. You know what else is “really rough” in China? The treatment meted out to people who go onto the Internet and denounce their own government. Freedom of speech is one of many American virtues Steve Wynn is slow to appreciate.