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Gaming Guru

Jeff Simpson

Jeff Simpson explains that changes in MGM Mirage's top ranks also means a big change in the company's structure

27 August 2007

LAS VEGAS, Nevada -- With all of the significant Las Vegas-related business stories last week, I don't have enough space for my thoughts about each one. So I'll be try to be brief.

I was really surprised by how little attention was paid to Tuesday's announcement of MGM Mirage management moves.

The company is the state's biggest employer and taxpayer, and it announced some dramatic changes.

If you read the newspaper wrapped around the Las Vegas Sun each day, you had to be a bloodhound to find the story.

The Review-Journal ran the story as a business brief on Page 2D, reporting that MGM Mirage was shuffling a few of its top positions and giving some of its executives new titles.

President, Chief Financial Officer and Treasurer Jim Murren was re titled president and chief operating officer, and Mirage Resorts Chief Executive Bobby Baldwin was named chief design and construction officer. Baldwin remains president of CityCenter.

But what the brief didn't say was that the moves meant the company had abandoned its split organizational structure, with MGM Grand Resorts Chief Executive John Redmond managing half the company and Baldwin's Mirage Resorts the other half.

The new structure leaves Baldwin in charge of a smaller portfolio and eliminates the Mirage Resorts name.

No longer is Baldwin in charge of Mirage, Treasure Island, Circus Circus and Beau Rivage in Biloxi, Miss. He remains in charge of what will be the company's flagship campus, CityCenter, and its neighbors, Bellagio and Monte Carlo.

Those changes indicate that Murren is the heir apparent to MGM Mirage Chairman and Chief Executive Terry Lanni. Although Lanni has yet to announce he plans to leave anytime soon, and I'd be surprised if he leaves before CityCenter opens in less than 2 1/2 years, Murren clearly has been determined to be Lanni's successor.

The brief also failed to mention Redmond's retirement Tuesday from the company.

Although I've thought for a long time Murren would be the likely Lanni successor - he's a financial wizard, enjoys the confidence of Wall Street and comes from the MGM Grand side of the company - Baldwin had to be considered a possible alternative.

It will be interesting to see whether CityCenter and MGM Mirage's robust appetite for development are enough to keep Baldwin happy now that it's clear he won't be succeeding Lanni.

Dubai World's $5.1 billion investment in CityCenter and MGM Mirage was an amazing development. The Dubai government-owned company has a record of buying blue-chip companies and holding them for the long term, its ill-fated effort to buy American ports notwithstanding.

I think Dubai's investment in MGM Mirage is a big positive for the company and is another sign that Las Vegas Strip real estate has propelled the city into the top tier of world markets, exciting the globe's savviest investors.

The Culinary's deal with MGM Mirage was good news, even if it wasn't surprising. The company is too successful, and the union's workers are doing too well, to permit a work stoppage that would have hurt both sides.

The remaining 11,000 Culinary workers without contracts at downtown casinos as well as at Tropicana, Sahara and a few other places are in for a tougher time.

I've said all along that Tropicana, with penny-pinching owners who worry a lot more about costs than providing customer service, is the likeliest setting for a strike.

The company recently put its ridiculous 10,000-room redevelopment of the Trop on hold because of the troubled credit markets, and it wouldn't surprise me to see owner Columbia Sussex close the 50-year-old property.

On a less significant note, I'd like to criticize what was apparently a business decision made by an affiliate company of my employer, the Las Vegas Sun.

Las Vegas ONE, the supposedly news-centric station co-owned by the Sun, made an inexplicable programming choice on Tuesday, airing a semipro women's football game (featuring a losing team called the Las Vegas Showgirlz ), preempting its signature News ONE at Nine evening newscast as well as the 8 p.m. broadcast of " Face to Face With Jon Ralston ."

The station should stick to the news, and preempting one of Ralston's shows on a night when he had a news-breaking interview with Republican presidential candidate Mitt Romney was a particularly poor decision.

Jeff Simpson is business editor of the Las Vegas Sun and executive editor of its sister publication In Business Las Vegas.

Jeff Simpson explains that changes in MGM Mirage's top ranks also means a big change in the company's structure is republished from