MGM’s Outgoing CEO Jim Murren To Stay “Involved” as Company Expands in Japan
Posted on: February 13, 2020, 07:52h.
Last updated on: February 14, 2020, 09:22h.
MGM Resorts International Chairman and CEO Jim Murren, who this week announced his eventual departure, said he will remain “involved” with the company’s efforts to open an integrated resort in Japan.
“I’m absolutely sure I’m going to be involved in the Japan project,” Murren said Wednesday in a Q4 conference call with analysts. “In fact, I’ll probably be even more involved in the Japan project as time goes by.”
Likely in May, Murren — who has led MGM since 2008 — will lead a company group to Osaka which will explain “why MGM and ORIX is the preferred partner,” he said. ORIX is a Japanese financial services firm which has an office in Osaka.
MGM is eyeing the capture of one of three gaming licenses to be granted by the national government. Murren’s focus has been on Osaka.
As of November, Melco Resorts is “all-in” on Yokohama, Japan’s second-largest city, while Sands and Wynn have also expressed interest in that area, as well as Tokyo.
Murren is leaving his MGM contract before it expires at the end of next year. The news stunned analysts and the gaming industry alike. But he pledged to stay on as chairman and CEO until a successor is named
“I really feel, after 12 years, especially after the last couple of years, we’ve really changed the dynamic of this company,” Murren said when asked by analysts about his early exit.
“And when I thought through how I could best serve MGM going forward, I thought it was pretty clear that a leader should help lead a company into the next decade or two. And so, I wanted to make sure the Board had the time … to do a robust search and find my successor,” he added.
Murren Names Some ‘Great’ MGM Colleagues
He also highlighted several “great” company colleagues during the analysts’ call, such as President and COO William Hornbuckle, Treasurer and Chief Financial Officer Corey Sanders, and President of Commercial and Growth Atif Rafiq.
“I don’t want to get ahead of the Board’s process,” Murren added about a successor. “They’ve developed a committee. They’ll hire a search firm. They’re going to go out and find the best possible candidate internally, externally or otherwise.”
Another key company official working on MGM’s expansion in Japan is former Nevada Governor Brian Sandoval. He is MGM’s President of Global Gaming Development — and one of his key responsibilities is public policy efforts around sports gaming and other sports betting initiatives in the East Asian nation.
MGM 2020 Respected in Japan
Last year, the company initiated MGM 2020, a strategy which is leading to layoffs of a limited number of employees. Most of those let go are in management.
The goal is to increase annual adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) by $200 million, and an additional $100 million by the end of 2021.
The 2020 initiative will likely gain the respect of the Japanese, MGM officials have said. “The bottom line is if they’re aware of it, it’s about making MGM a stronger, more nimble company, and it’s actually going to benefit our work in Japan,” Sandoval was quoted by the Las Vegas Review-Journal.
MGM also recently pulled 2020 guidance, as Macau casinos closed temporarily because of the coronavirus outbreak.
When asked for insight into Murren’s early departure, the Rev. Richard McGowan, a finance professor at Boston College who researches national gambling trends, noted to Casino.org how the news comes as “It appears that MGM’s debt was too much for them to make bids for more lucrative casinos sites, such as Japan.”
McGowan explained that the new CEO “will be operating casinos in very diverse places.” Murren’s successor will also have to address such issues as — can MGM’s foreign casinos’ strategy work, and can MGM pay down its debt and still take advantage of foreign opportunities?
“MGM has a huge debt to pay for casinos such as MGM in Springfield, Massachusetts, that have not succeeded as planned at all,” McGowan added.
The company is selling such US properties as the MGM Grand and Mandalay Bay on the Las Vegas Strip to a joint venture in deals totaling $4.6 billion. It also sold Circus Circus to billionaire Phil Ruffin for $825 million, as well as the Bellagio to Blackstone Real Estate for about $4.2 billion.
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