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Alana Roberts

Lanni: Mandalay Purchase Hurt MGM's Diversity Stats

9 June 2005

LAS VEGAS – MGM Mirage's diversity numbers aren't as good as they were a couple of months ago.

That's because newly acquired Mandalay Resort Group's numbers didn't measure up to MGM Mirage's, said Terry Lanni, chairman and chief executive of MGM Mirage, to a group of gaming and work force leaders. He said since the company's merger with Mandalay Resort Group the company's minority management numbers have fallen slightly.

"We acquired a company that wasn't as aggressive," Lanni said.

He delivered his remarks at the Southern Nevada Workforce Investment Board gaming summit at Wynn Las Vegas.

Lanni said since the merger with Mandalay Resort Group, the company's percentage of minority managers and above has dropped slightly from 31.3 percent to 28.6 percent. The company's employee ranks have grown from 40,000 before the merger to 70,000.

However, Lanni said the newly merged company's diversity program should be up to speed by early next year.

"By Jan. 1 we will be totally together with our program in terms of diversity," Lanni said.

The company reported in April that minority participation at the management and above level rose from 26.31 percent in 2001 to 31.16 percent in 2004.

Lanni said diversity in employment is important, but it's not just about overall employment numbers.

"When we talk about employment, it's not just numbers," Lanni said. "But how many managers do you have?"

The company's minority participation in its entire workforce has grown from 50.48 percent in 2001 to 54.38 percent in 2004.

Employment is a part of the company's commitment to diversity. However, Lanni said the company's diversity initiatives are also focused in the areas of purchasing, construction, philanthropy, advertising, marketing and sales.

In the company's diversity report released in April, MGM Mirage said it increased the amount of money it spends with minority, women and disadvantaged-owned suppliers and contractors as well as the amount of philanthropic contributions it makes to help diversity initiatives.

The company's expenditures with minority, women and disadvantaged-owned suppliers grew from $24.3 million in 2001 to $77.4 million in 2004; the company's expenditures on minority, women and disadvantaged-owned businesses in the area of construction grew from $8 million in 2001 to $79.3 million in 2004; the company increased its corporate philanthropic contributions to diverse philanthropic initiatives from 15 percent of all contributions to 49 percent. Lanni also said construction on MGM Mirage's $4.7 billion CityCenter project will offer many opportunities for minority contractors and suppliers.

Lanni said the company made a commitment in 2000 to ensuring that in every construction bid there is participation by businesses that are designated as either women, minority or disadvantaged-owned.

"We made a commitment that we would not accept a bid unless it had a women-owned, minority-owned or disadvantaged-owned percentage in it," Lanni said.

Lanni said that commitment will extend to the CityCenter project, under the supervision of Bobby Baldwin, Mirage Resorts chief executive.

"Bobby Baldwin heads it," Lanni said. "He's very committed to diversity."

He said the 66-acre project is likely to grow from the projected cost of $4.7 billion to $5.2 billion.

Lanni said a strong diversity program is good for business. He said because of the strong focus the company has on diversity MGM Mirage has been able to attract large groups of minorities to meet and stay at company properties, such as the black Delta Sigma Theta sorority which met last summer in Las Vegas and brought 28,000 people to the city.

"It's not only the right thing to do, but we said we're going to get a lot more buy-in from our people if it can affect the bottom line," Lanni said. "We're in business to make money."

Lanni said Wednesday that the company has also made efforts to include more images of diverse people in its advertising.

"We had a lot of advertising with a lot of white men and women, not a lot of people of color," Lanni said.

Lanni's speech capped off a half-day event that included a speech by Arte Nathan, chair of the Nevada Workforce Investment Board and chief human resources officer for Wynn Resorts.

The Rev. Chester Richardson, vice chairman of the Southern Nevada Workforce Investment Board, said the group is seeking to reach out to the gaming industry to ensure those companies are adequately using the resources the board provides. The board distributes federal labor funds to organizations that train and prepare people for jobs.

He said there are many workers in Southern Nevada who are unskilled and unemployed who could become employable if the gaming companies sought out the board for help with their staffing needs. The group is able to provide training for workers and can help assist them in social services such as temporary rent assistance to ensure they can become productive workers.

"They spend a lot of time and money recruiting, screening and training," Richardson said. "We can save them money."

Lanni: Mandalay Purchase Hurt MGM's Diversity Stats is republished from