Although MGM Resorts International, like all other gaming companies, are bleeding cash left and right in Macau, the company is doing very well, according to CEO Jim Murren. While many analysts and skeptics feel the worst is yet to come, it’s important to step back and realize if the region “only” pulls in billion this year, that’s still billion.
That is the sentiment Jim Murren has shared when asked about how worried he may be about the company’s performance overseas. This quarter saw Macau casinos gambling revenue fall 37 percent to $8.1 billion. Murren goes one step further to predict the gaming industry in Macau will stabilize in 2016.
Unfortunately for Murren, not everyone involved with the company shares the same feelings. One of those people, who has been a thorn in the side to gaming giant in recent months is Jonathan Litt, founder and chief investment officer of Land and Buildings, who also own a sliver of MGM. Litt made headlines of late when his company proposed a deal which would place MGM into a REIT, which seems to be the hot move in gaming these days.
Murren and his finance people have stated time and time again their feelings on REITs, which they see as short-term solutions which long-term detriments. Not only does Litt continue to press the issue, he also has proposed for the removal of board members Bobby Baldwin, Roland Hernandez, Alexis Herman, and Rose McKinny-James.
Litt wants to see the seats replaced by himself, Matthew Hart, a former Hilton and Marriott executive, Richard Kincaid, former CEO of Equity Office Properties, and Marc Weisman, COO of J.D. Carlisle LLC.
The Tracinda Corp., Las Vegas legend Kirk Kekorian’s privately held investment company, who also is MGM’s largest shareholder, has quickly stood up in defense of the four board chairs. “We are very confident that the current board and management team are committed to, and more than capable of, evaluating all avenues to deliver sustainable value, including determining whether some form of a REIT conversion would make sense,” the company said in a statement.
MGM currently is developing MGM Cotai, in Macau, along with projects in Washington D.C. And Massachusetts, a 350,000-square-foot expansion of the Mandalay Bay Convention Center, and the highly anticipated 20,000-seat MGM/AEG arena currently under construction behind the New York, New York casino, next to I-15 in Las Vegas.
