Casino Land-Based From the top: Japan, Jim Murren’s lasting legacy April 16, 2020 By Tim Poole Tim Poole assesses Jim Murren's legacy after his departure from MGM Resorts International. Even as an objective journalist, I have developed a reputation inside the Gaming America office as being a huge fan of Jim Murren’s work. I was genuinely saddened to hear of his stepping down as MGM Resorts International Chairman and CEO, and a colleague messaged me shortly afterwards saying ‘sorry to hear about your best mate Jim.’ The long-time gaming exec certainly made an impression during our hour-long interview for the US CEO Special of Gambling Insider magazine at the Bellagio last July. Here was a man who spoke passionately about not just gaming but issues beyond it; architecture, showing humility as an executive and turning Las Vegas into a sporting capital. The fact he has taken an unpaid role heading a COVID-19 taskforce upon leaving MGM does not suprise me, such is his nature. Which is why I was rather surprised by the immediate reaction to his departure from MGM. Not only did share prices initially rise (they have since fallen) but there appeared to be A) a lack of surprise given MGM’s recent performance and B) a lot of scorn for Murren on social media. Admittedly, the latter is easily explainable – seen as the man behind both parking fees and resort fees, it’s fair to say professional gamblers didn’t take too well to Murren. Meanwhile, MGM’s Q4 results were "below expectations," with net revenue growing 4% year-on-year to $3.2bn and adjusted EBITDAR decreasing 3% to $682m. But I, without any sense of bias, would always question the panning of a set of financial results that include a 10% full-year rise to $12.9bn. My impression, and I’m sure all those reading from a neutral standpoint will agree, is these are the kind of numbers all gaming and entertainment firms would aspire to. Those Q4 results have undoubtedly meant Murren’s departure comes in far different circumstances than a Chairman and CEO would desire, i.e. going out on top (or from the top, to quote this very column). But, as many analysts have written – with former American Gaming Association CEO Geoff Freeman going as far as penning an open-letter tribute – Murren’s legacy is an important one for Las Vegas. Carrying on Kirk Kerkorian’s visionary work with MGM, Murren has left a mark on the gaming sector it will be difficult to ignore. Many of the benefits of Murren’s passions and achievements will be reaped further down the line. If Las Vegas ever hosts the Olympics, for example, Murren should be the first man thanked for his contribution to its sporting landscape. Murren, too, is a firm advocate of equality in both sport and the workplace. But, whatever your opinion on Murren’s performance as Chairman and CEO, his biggest legacy may well lie in Japan; especially considering his comments on MGM’s Q4 and FY earnings call were interpreted as a hint he could take up a role within MGM’s Japanese business in future. “I’m absolutely sure I’m going to be involved in the Japan project,” he said. “In fact, I’ll probably be even more involved in the Japan project as time goes by.” As I say, my goal – as it should be with any journalist – is to remain objective. On that basis, it’s difficult to paint Murren’s final years in the CEO role as an unwavering success, given respected industry analysts half-expected his departure following MGM’s recent performance. It is equally difficult, however, for anyone to argue Murren has not left MGM in a strong long-term position internationally. He has put true emphasis on the “International” aspect of the brand name. Having sold the real estate of the Bellagio for $4.25bn and agreed sales for the real estate of the MGM Grand and Mandalay Bay for a combined $4.6bn, Murren has left the casino operator in strong financial shape to enter the Japanese market. That financial backing does not look like going to waste, either, with MGM’s chief competition for an integrated resort (IR) license in Osaka withdrawing from the race, leaving MGM in pole position. Despite still pursuing a license elsewhere in Japan, Galaxy Entertainment withdrew from the Osaka IR race. With Genting doing the same, MGM and its partner Orix were the only survivors of Osaka’s Request for Proposal process. Murren has spared no expense in his personal bid to secure a Japanese casino license for MGM, telling Gambling Insider back in July he has been visiting Japan for some 30 years, flying over 30 times within the last three years alone. It’s a market MGM clearly prioritizes, with current President and Acting CEO Bill Hornbuckle describing it as the “largest untapped market in the world.” He explained to Gambling Insider, also in July, while he was President and COO: “It represents the economics of something like Singapore. There will be three coveted licenses. Each one will have an audience of about 30 million if they are spread out correctly. So we’re all in. We’ve taken an Osaka-first position and we want to build something extremely special." Now, should the Japanese market fulfil those expectations, MGM would be one of only three firms to benefit from a huge new source of revenue. It may even end up the only US firm to land such a license and, in terms of legacies, that’s not one to be questioned. Of course, the potential issue exists of Japan perhaps not living up to its billing financially. But responsibility for that, realistically, would land firmly on those taking charge of the project from hereon in. Murren has done everything he can to put MGM on the Japanese map and will even stay on as a consultant in the short term, with his aforementioned hint of future Japan involvement to go with it. If projections aren’t matched, it’s safe to say it won’t be because of any shortcomings on Murren’s part. While analysts can speculate over the executive's success in Las Vegas, the merits of prioritizing non-gaming revenue and Murren’s many other policies and business philosophies, his lasting legacy will be one of internationalization. You only need look at MGM’s expansion into Macau, which has been a resounding success and had Murren’s stamp all over it. An architect by nature, Murren is a man with long-term vision. One day, that vision should become a reality as MGM opens its first Japanese casino, likely in Osaka and, more specifically, Yumeshima. Much like his tenure itself, some will lavish it with praise and others criticize it. But no one will be able to change the fact it is there – the physical representation of Murren’s grand design coming to life.