MGM may change name to reflect Mirage brands

David Strow

Friday, June 2, 2000 | 10:53 a.m.

One day after his company swallowed Mirage Resorts Inc. in a record $6.4 billion deal, MGM Grand Inc. Chairman J. Terrence Lanni said the company is considering a name change.

Lanni wouldn't reveal what names were being considered, but hinted that the new name would draw off the Mirage portfolio of brand names.

"We think we should take advantage of the great brands that we acquired from Mirage," Lanni said Thursday in his first news conference since the merger closed. "(Gaming executives) in every part of the world would love to have one-half of the brands that we now have."

Though MGM Grand's name may be on the way out -- and Mirage's shares traded for the last time on the New York Stock Exchange Thursday afternoon -- Lanni was quick to emphasize that customers will notice little difference in the resorts operated by both companies.

"We obviously want this to be as seamless as possible," Lanni said. "We want (customers) to think this transition never took place."

The merger created one of gaming's most diversified companies. Properties now owned and operated by MGM Grand range from the palatial Bellagio resort to the low-end properties in Primm on I-15 at the California-Nevada border some 35 miles south of Las Vegas. In size, its properties range from a tiny resort in Darwin, Australia, with less than 100 rooms, to the 5,000-room MGM Grand hotel-casino on the Strip.

Still, Lanni was adamant in his belief that it does make sense to have such a diverse range of properties -- and repeated his commitment not to sell any casinos as the company pares down debt.

"We have not entertained any offers for any operating assets of the company," Lanni said. "I want to see this company address all aspects of the destination resort crowd.

"We don't have all Bellagios or Primms in this company."

In fact, Lanni said the company is already focusing on new growth opportunities. Two of the most immediate are plans for a "Generation X"-focused casino on land just south of the Bellagio -- which could break ground within 18 months -- as well as expanded plans for the Borgata, a $750 million Atlantic City resort being built in partnership with Boyd Gaming.

"We like the idea of (the Borgata) going from 1,200 rooms to 2,000 rooms, and we're very supportive of that idea," Lanni said.

Lanni also said he wouldn't mind seeing MGM Grand become the sole owner of the Monte Carlo resort on the Strip, now owned in partnership with Mandalay Resort Group.

"We're very happy with 50 percent ownership in the Monte Carlo," Lanni said. "We'd certainly love owning 100 percent of Monte Carlo, but that's nothing more than a thought on my part."

In order to finance these new projects, MGM Grand will have to begin reducing debt. Lanni said the company may start announcing as early as today the first in a series of asset sales. Of particular interest are a wide range of land parcels owned by Mirage, in places ranging from the Pocono Mountains of Pennsylvania to 547 acres of land next to the Shadow Creek Golf Course. Other asset sales will include such items as aircraft, corporate apartments and pieces of artwork from the Bellagio.

Though MGM Grand's intention is to keep as much of the Mirage culture intact as possible, some organized labor groups say a new owner gives them opportunity for expansion into the Mirage properties.

The Culinary Union is already well established at both MGM Grand's and Mirage's properties along the Strip, and enjoys close relations with MGM Grand management.

But the situation is different with other unions. One union -- Operating Engineers Local 501 -- has won recognition at the MGM Grand and the New York-New York, but was not successful in organizing at any Mirage properties. Two other unions -- the Teamsters and the Nevada Carpenters Union -- have made no secret of their desire to organize at Mirage properties, but have not been successful to date.

But Mike Russell, business representative with Operating Engineers Local 501, said there's reason to be optimistic now that MGM Grand is in charge of the Mirage properties.

"We've been contacted by some of the engineers at those (Mirage) properties, and there's a showing of interest," Russell said. "We don't think (MGM Grand) will roll out the red carpet, but I don't think they'll bar the door.

"They're straight shooters. It's been a good relationship, and hopefully down the road it can get better."

Teamsters Local 995 is currently in talks with MGM Grand about representing workers at a number of MGM Grand properties, including some in the Mirage portfolio, said local secretary-treasurer Mike Magnani.

"It's a delicate issue, and I'm not sure I want to discuss it at this point," Magnani said. "We are talking to MGM, trying to work out something. At this point, everything is up in the air."

The most visible organizing campaign is being led by the Nevada Carpenters Union, which is in just one Mirage property, the Golden Nugget. The union claims a majority of carpenters and upholsterers at the Mirage hotel-casino have signed petitions calling for representation by the union, and has asked the National Labor Relations Board to force the Mirage to recognize the union.

"I really don't know what to expect," said Bill Harris, business representative with the carpenters union. "They allowed elections at the MGM and New York-New York. I don't know what to expect, but I am looking forward to dealing with them (MGM Grand)."

Dan Wade, co-chief executive of MGM Grand, said the company will rely on Mirage CEO Bobby Baldwin for direction in dealing with Mirage's business operations -- including dealing with labor matters at the properties.

"We're not anti-union," Wade said. "It's up to the employees. We want to be very cautious ... that (organization) is what the employees want."