Not to be confused with the Las Vegas, Nevada based casino/resort operator Resorts International Holdings.
| Type | Public (NYSE: MGM) |
|---|---|
| Industry | Gambling Hotels Entertainment |
| Founded | 2000 |
| Headquarters | Paradise, Nevada, USA |
| Key people | James J. Murren Chairman of the Board CEO |
| Products | Casino Hotels |
| Revenue | $ 5.978 billion - 2009 |
| Operating income | $ -963.876 million - 2009 |
| Net income | $ -1.292 billion - 2009 |
| Total assets | $ 22.518 billion - 2009 |
| Total equity | $ 3.870 billion - 2009 |
| Employees | 46,000 - December 2009 |
| Subsidiaries | List of Subsidiaries |
| Website | www.mgmresorts.com |
MGM Resorts International (NYSE: MGM) is a Paradise, Nevada based corporation that brands itself as a global hospitality company. It is the second largest gaming company in the world by revenue - about US$6 billion in 2009. It owns and operates 15 properties in Nevada, Mississippi and Michigan, and has 50% investments in four other properties in Nevada, Illinois and Macau, China.[1][2]
The company began as MGM Mirage on May 31, 2000, with the merger of MGM Grand Inc. and Mirage Resorts Inc. In the mid-2000s, growth of its non-gaming (lodging, food, retail) revenue began to outpace gaming receipts and demand for high-rise condominiums was surging, with median property prices in Las Vegas twice the national average.[3][4] The company shifted its business model from fully owning and operating resorts and casinos, to being more real estate focused - launching the massive Citycenter mixed-use project.[5][6] Unfortunately, the latter's development coincided with vast overbuilding on the Strip and a global financial crisis, causing large losses and writedowns in valuation.[7]
In June 2010, the company changed to its present name, to reflect its latest strategy of expanding worldwide, including licensing its brand and expertise to develop non-gaming hotels and residences. Through 6 global offices of its subsidiary, MGM Resorts Hospitality, it has agreements to develop and manage nongaming Bellagio, MGM Grand and Skylofts hotels in countries such as Dubai, Abu Dhabi, India, Vietnam, Egypt and China by 2013.[8][9][10]
Billionaire investor Kirk Kerkorian and his Tracinda Corporation were, until May 2009, the majority shareholders of MGM Mirage; Kerkorian was the former owner of the Metro-Goldwyn-Mayer movie studio, from which the predecessor corporation, MGM Grand Inc. derived its name. Following a one-billion-dollar stock offering by MGM Mirage amidst the global credit crutch, Tracinda's shares were diluted from 53.8 percent to 39 percent.[11][12] In May 2010, hedge fund Paulson & Co acquired 40 million shares (about 9%) to become MGM Resorts’s second-largest shareholder.[9]
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The company began operations as MGM Mirage on May 31, 2000 after the completion of a US$6.4 billion merger, the largest ever in the industry. At the time of the merger, MGM Mirage was the largest gambling company in the world; it was subsequently succeeded by Harrah's Entertainment. Before the merger, MGM Grand had been in operation since the 1960s and Mirage Resorts (formerly Golden Nugget Companies, Inc.) had been in operation since the 1970s.
On January 26, 2004, MGM Mirage completed the sale of its two Golden Nugget casinos—the Golden Nugget Las Vegas and the Golden Nugget Laughlin. The downtown Las Vegas location is notably the first casino owned by Steve Wynn, and was the foundation on which he built the MGM Mirage predecessor, Mirage Resorts. The Golden Nugget properties were initially purchased by Poster Financial Group, Inc. for approximately $215 million, and ultimately acquired by Tilman Fertitta's Landry's Restaurants.
On June 4, 2004, MGM Mirage announced a bid to acquire one of its major competitors, Mandalay Resort Group, for $68 per share plus assumption of debt. The ensuing negotiations between the two companies included at one point an announcement that the Mandalay board was rejecting the offer because of antitrust concerns. On June 15, 2004, however, both companies' boards approved a revised offer of $71 per share. The agreement called for MGM Mirage to pay $4.8 billion and to assume $2.5 billion in debt. The transaction was completed on April 26, 2005 for $7.9 billion.
On June 23, 2004 MGM Mirage completed its $140 million sale of the MGM Grand Darwin to Skycity Entertainment Group.
Announced on November 10, 2004, Project CityCenter on the Las Vegas Strip, is a 76 acres (31 ha), $7 billion, project on the site of the Boardwalk Hotel and Casino and adjoining land is planned as a multi use project. It consists of hotels, casino, condominiums, retail, entertainment and other uses. The development was officially opened in December 2009.[13]
As of 2005, the company owned 831 acres (336 ha) of property on the Las Vegas Strip.
On May 31, 2005 MGM Mirage started construction on the MGM Grand Macau.
On April 25, 2006, MGM Mirage announced with Foxwoods Resort and Casino a joint partnership in developing an expansion plan at Foxwoods that will include a casino using the MGM Grand brand.[14]
On October 16, 2006, MGM Mirage announced that it planned to sell the Colorado Belle Hotel & Casino and Edgewater Hotel and Casino to a partnership of Anthony Marnell III and Sher Gaming. The sale price was $200 million.[15] The sale closed on June 1, 2007.
On October 31, 2006, MGM Mirage announced plans to sell Primm Valley Resorts to Herbst Gaming for $400 million. The proposed sale would not include the Primm Valley Golf Club.[16] The sale closed on April 10, 2007.
On April 19, 2007 the company announced that it planned to purchase a 7.6-acre (31,000 m2) site from Concord Wilshire Partners for $130 million and a 25.8-acre (104,000 m2) site from Gordon Gaming for $444 million. The two parcels give the company complete control of the southwest corner of the Sahara and Las Vegas Boulevard intersection. When combined with underused parts of the Circus Circus site, the company will have a 68-acre (280,000 m2) site for future development. The Concord site had been the proposed location for the Maxim Casino.[17]
On August 22, 2007, Dubai World said it will buy a 9.5 percent stake in MGM for about $2.4 billion. It will also invest about $2.7 billion to acquire a 50 percent stake in MGM's CityCenter project, a $7.4 billion, 76 acres (31 ha) Las Vegas development of hotels, condos and retail outlets due to open in 2009. Dubai World will pay MGM Mirage an additional $100 million if the project opens on time and on budget. The investment firm will buy 14.2 million shares from MGM Mirage at $84 each, a premium of about 13 percent over Tuesday's closing price. The firm will also issue a public tender for an additional 14.2 million shares at the same price. The public tender is due to begin during the week of August 27, 2007.[18]
In December 2007, it opened MGM Grand Macau, its first overseas property, owned and operated through a 50/50 partnership with Pansy Ho, the daughter of Macau's gambling tycoon Stanley Ho.[19]
On October 29, 2008, MGM Mirage halted a $5 billion Atlantic City project on land next to the Borgata Hotel and Casino, which it shared effective half-ownership with Boyd Gaming at that time. The announcement came on the same day MGM Mirage reported a 67 percent plunge in third-quarter earnings, largely because of sluggish revenue from its properties on the Las Vegas Strip.
At about the same time, New Jersey gambling regulators were set to deny MGM Mirage's suitability to operate casinos in New Jersey, as they were unconvinced that MGM Mirage's Macau partner, Pansy Ho, could operate independently from influence of her father, Stanley Ho. The latter is often accused of ties with Chinese organized crime and letting the gangs operate in his casinos' VIP rooms. Faced with not complying with New Jersey gaming regulations, MGM Mirage decided to sell its highly profitable Borgata hotel casino in Atlantic City in order to continue pursuing the even more lucrative Chinese market.[19] MGM Mirage subsequently transferred its 50% share in the Borgata to a divestiture trust through which it receives all benefit of the ownership. The trust will be responsible for selling MGM's interest within 30 months, although MGM will have the right to direct the trustee during the first 18 months.[20][21]
On December 16, 2008, MGM Mirage announced the sale of its Las Vegas Treasure Island resort and casino to billionaire Phil Ruffin. The sale was completed on March 20, 2009, where Ruffin took possession of the property and its operations. $600 million in cash was wired to MGM Mirage with a $175 million secured note bearing interest at 10% payable not later than 36 months after closing, for a total sale price of $775 million.[22]
On March 23, 2009 Dubai World the United Arab Emirates domestic and international investment arm of the Dubai emirate government announced that it and a wholly owned subsidiary Infinity World have filed a lawsuit in the Delaware Chancery Court claiming that MGM Mirage breached its CityCenter joint venture agreement after the company filed its 10-K report with the U.S. Securities and Exchange Commission which states in part "There is substantial doubt about our ability to continue as a going concern." and "it cannot provide assurance that its business would generate sufficient cash flow from operation." Dubai World through Infinity World owns 9.5% of MGM Mirage's stock and has invested a significant amount of funding into CityCenter giving it part ownership of the project are asking the court to relieve it of any obligations under the agreement.[23][24][25]
Starting on April 6, 2009 news reports began to surface that MGM Mirage hired investment firm Morgan Stanley to assist the company in finding possible buyers for the MGM Grand in Detroit, Michigan and the Beau Rivage in Biloxi, Mississippi.[26][27]
On June 15, 2010, shareholders voted for MGM Mirage to change its name to "MGM Resorts International", which emphasize the brand's global scope and increased non-gaming strategy. Chief Executive Officer Jim Murren said that hedge fund Paulson & Co had acquired 40 million shares (about 9%) to become MGM Resorts’s second-largest shareholder.[9][28]
On April 18, 2011 an Initial Public Offering was announced for the MGM Macau property. Under the agreement, Pansy Ho Chiu-king, would receive a 29 percent stake in the company, MGM China Holdings Ltd, which has been created as a listing vehicle for the IPO. MGM Resorts would hold 51 percent and the public would receive 20 percent. MGM Macau casino operator raised $1.5 billion from its Initial Public Offering on the Hong Kong Stock Exchange.[29]
All properties are wholly owned by MGM Resorts International except where indicated.
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