My favorite exchange in one of my favorite current TV series, Mad Men, takes place when weasel-like junior exec Pete Campbell (Vincent Kartheiser) goes to rat out his boss, Donald Draper (Jon Hamm), to company owner Bertram Cooper (the cunningly cast Robert Morse). “Draper” is, Campbell has discovered, a Korean War deserter who has risen to the upper reaches of Madison Ave. circa 1960 under an assumed identity.
Cooper takes all this in imperturably, bestows upon the youngster a pitying gaze and says, “Mr. Campell … who cares? This country was built and run by men with worse stories than whatever you’ve imagined here. The Japanese have a saying: ‘A man is whatever room he is in’ — and right now, Donald Draper is in this room.”
Which was pretty much my reaction to the J. Terrence Lanni resumé-inflation flap (it came and went too quickly to qualify as a scandal). The casino industry was built by men who did far worse things than list a nonexistent MBA on their curriculum vitae. Heck, Harrah’s Entertainment is operated by a Ph.D late of the Harvard University faculty and it’s not exactly an advertisement for fiscal well-being these days ($415 million lost in 2008, and counting). For that matter, we’ve entrusted our country for the last eight years to men with MBAs who said they’d run it like a corporation. How’d that work out?
And even if Lanni deliberately padded his resumé to get ahead … who cares, Mr. Campbell? At worst, the reins of MGM Mirage might have gone to somebody more obviously “qualified” … like a Gary Loveman or a Frank Fertitta III. MBA or no, Lanni was good enough for owner Kirk Kerkorian, a man with a Ph.D from the School of Hard Knocks.
Simply put, at a time when Mob-tainted Clifford Perlman is in the American Gaming Association‘s Hall of Fame (presumably soon to be joined by the late Lefty Rosenthal) and when Columbia Sussex CEO William J. Yung III got run out of New Jersey for running a rogue outfit in Atlantic City, but retains casino licenses in Nevada, Louisiana and Mississippi, outrage is difficult to muster.
Which is not to excuse the whitewash (Steve Friess has an even harsher term for it) that ran in Sunday’s Las Vegas Review-Journal. Basically, the story amounts to a regurgitation of MGM’s company line, which boils down to, “We (sort of) planned it this way.” Less charitably, the R-J lends its credibility to an attempt to sweep Lanni’s speedy and inglorious exit under the nearest available rug.
“(T)here is never a perfect time” for MGM’s CEO to step down, we are told. No, but ringing up Kerkorian on the evening of Nov. 12 and giving him two weeks’ notice is something less than the “smooth transition” MGM and the R-J are trying to depict. CEO-in-waiting Jim Murren stepped gracefully into Lanni’s shoes but the timing and alacrity of Lanni’s departure leave many questions hanging.
Given the extreme proximity between the Wall Street Journal‘s exposé on Lanni’s credentials and his resignation, the official stance that it was all just a big coinky-dink, while possible, is difficult to swallow. (After all, a plan for Lanni to remain on the MGM board was quietly withdrawn when casino-oversight three states, including Nevada, began to probe the academic-credential issue.)
But let’s give everybody the benefit of the doubt on that one and consider what else might have propelled the CEO toward the exit:
Perhaps Lanni, a man well-served in Asian sensibilities, was falling on his sword for the good of the company. After all, Nov, 12 marked the first time in at least five years that MGM stock closed at $10/share. Maybe, as Jeff Simpson has suggested, Lanni placed a “sell” order on himself once the stock price hit that inauspicious threshold.
The massive Harmon screw-up was already known to him. Or perhaps the sale of Treasure Island and writedown of $1.2 billion related to the Lanni-supervised takeover of Mandalay Resort Group were already done deals, and Lanni foresaw himself presiding over the partial dismantling of an empire he’d helped build.
Or maybe he just woke up that morning and, channeling Danny Glover in the first Lethal Weapon movie, growled, “I’m getting too old for this shit.” That, at any rate, is The Official Story (minus the scatology).
It appears we will never know what ultimately prompted Lanni’s leap … or at least not for a long time. I’m with those who say, “he will be judged on his leadership.” He certainly did much more than any executive I can think of when it comes to making diversity a priority in a boy’s-club industry. He extended the company’s reach into new overseas markets. And if MGM’s reach exceeded its grasp toward the end of the Lanni Era, it did not do so to the extent that has Harrah’s, Station Casinos and several other companies presently skirting the edge of bankruptcy.
Heck, we only demand honesty from CEOs on a selective basis. On Oct. 29, Lanni said no asset sales were on the table at MGM. Two weeks after Lanni left, Phil Ruffn plunked down $775 million for Treasure Island. Perhaps that deal really did come together in a fortnight, although it’s not been MGM’s style to move so fast. If, for purposes of argument, Lanni had been in talks with Ruffin in late October and told the press that asset sales were being discussed, what would have happened? MGM stock might easily have dropped like a brick. So if Lanni did fib about the Ruffin talks, do we further discount his credibility or do we say that it was his fiduciary duty to fudge the truth every so often?
One could go further about Lanni’s accomplishment (which also include the complete domination of the Detroit market and the development of a strong executive team), but let it suffice to say that J. Terrence Lanni was “in the room.”
Nor did he deserve the non-person status he fell into upon his resignation. His name was scarcely even mentioned at the most recent G2E and, when it was, it was sort of muttered in the corners of the press room. Honestly, there was neither a death in the family nor anything about which to be embarrassed — and casino regulatory bodies have matters more material with which to deal than with the occasional fudged resumé. The probity and financial solvency of the mergers and alliances they are asked to bless might be a good place to start.
Secured creditors of Tropicana Entertainment are being asked to take haircuts of 14-27%, as details continue to emerge of the company's reorganization proposal. The bigger shave would go to debtors of the company's 10 non-Vegas properties, the value of whose stake would be written down to $915 million.
