Authors ‘dead wrong’ about media coverage

Friday, March 30, 2001 | 4:39 a.m.

Sally Denton and Roger Morris are "dead wrong" in their assertion that the Las Vegas media sugarcoated its coverage of MGM Grand Inc.'s takeover of Mirage Resorts Inc.

That's the position of the Las Vegas Sun editors who shaped the newspaper's coverage of the stunning corporate takeover last spring.

Managing Editor Michael J. Kelley and Business Editor Steve Green said the authors of the new book, "The Money and the Power: The Making of Las Vegas and its Hold on America," based their conclusion on poor research, shoddy reporting and their own bias against Las Vegas and its media.

Denton and Morris claim that MGM's $6.4 billion purchase of Mirage Resorts, which they call "the single most important business transaction in the annals of the Strip," was "largely unexplored" by the local media.

"The minimal coverage was one more sign of how much America's most prosperous, fastest-growing city had become captive to the corporate lords of gaming," they write.

Former Mirage Resorts Chairman Steve Wynn, known for his lavish lifestyle, and media-shy billionaire Kirk Kerkorian, MGM's largest shareholder, were portrayed as politically connected untouchables immune from criticism in Las Vegas.

The authors made a similar assessment of the Las Vegas media in a November 2000 article promoting their book for the Columbia Journalism Review, one of the industry's top trade publications.

Kelley and Green later responded in separate letters to CJR.

Kelley said the Sun's reporting was anything but minimal.

"That is not only dead wrong factually and contextually ... but it is also insulting in the extreme," he wrote.

He described the coverage as "thorough, complete and knowledgeable."

From Feb. 23, 2000, when MGM made its offer for Mirage Resorts, through the aftermath in September, the Sun published 71 staff-written stories on the merger and 10 wire stories, Kelley said.

Denton and Morris easily could have discovered the truth about the Sun's reporting, he said..

"Steve Green and I would have made ourselves, anyone else they wanted and our archives available to them," he said. "But it appears they already knew what they wanted to write, and our facts wouldn't have fit their preconceptions."

Kelley said he was "stunned, dismayed and, for CJR's sake, saddened by the careless, yet seemingly intentional hatchet job" the authors did on the newspaper.

The CJR article, he added, was "riddled with errors of fact and conclusion" and showed no evidence that the writers actually examined the Sun's coverage of the Mirage takeover.

Denton and Morris made some of the same errors in their book, which did not give the Sun editors a chance to respond.

They write in "The Money and the Power" that the "customarily polite Las Vegas press" failed to pick up on the warning signs of the merger.

"Despite national or foreign accounts of Mirage's vulnerability, Kerkorian's takeover struck Southern Nevada like a thunderbolt out of a clear desert sky," the authors say. "Neither the Review-Journal nor the Las Vegas Sun had delved into how shaky Wynn's hold had become, and many readers were stunned by the purchase."

They refer to a column that Sun President and Editor Brian Greenspun wrote several days after the takeover.

"I am still in shock," Greenspun is quoted as saying. "We barely had time to figure out who was on what side."

But Green said in his letter to CJR that influential national news organizations joined the Las Vegas media in its astonishment over the deal.

"I am aware of no story in major publications, such as the New York Times, Wall Street Journal or Business Week, declaring Mirage Resorts a merger target in the months preceding Kerkorian's takeover bid of Feb. 23," Green said.

The Wall Street Journal, he said, published two lengthy stories on Mirage Resorts just prior to the takeover bid, but neither said the company was primed for a takeover.

"Both stories were comprehensive -- but again they built upon issues already covered in the Las Vegas dailies," he said. "In fact, when Kerkorian's takeover offer was announced, it came as a surprise not only to the Sun and Review-Journal but also to the Wall Street Journal, Dow Jones (and) the Los Angeles Times ..."

Green said Wynn's hold on Mirage Resorts last year wasn't shaky at all, as Denton and Morris claim.

"In fact, despite Mirage's well-publicized problems during 1999," Green wrote, "Wynn was solidly in control of Mirage in early 2000 and could have kept control of the company if he had wanted to."

The Sun reported extensively on Wynn's options, Green said. And when the Mirage boss accepted the sweetened MGM offer, the Wall Street Journal reported: "His decision to sell the casino company he founded 27 years ago stunned people from Wall Street to the Las Vegas Strip."

Both Kelley and Green said the authors also wrongly claimed that the Sun and the rest of the Las Vegas media did not do any serious reporting about the goings-on at Mirage Resorts leading up to the merger.

Green pointed to a long list of stories detailing Mirage Resorts' financial problems in 1999 and 2000 that Denton and Morris ignored.

The authors describe the sale as "nothing less than a hostile takeover of a company and the corporate humiliation of a tycoon who had been off limits to critical reporting."

But Kelley responded: "To say Wynn has been 'off-limits to critical reporting' by the Sun is patently, provably untrue. On the other hand, we have also written that Wynn is a businessman whose vision was instrumental in creating the current, and highly successful, Las Vegas that has grown from 750,000 to 1.4 million people in the last 10 years."

Green said Denton and Morris also made an incorrect assumption that the MGM takeover of Mirage Resorts was hostile.

Nevada gaming regulators and the state's corporation-friendly laws likely would have prevented such an occurrence, he said.

"The fact is the takeover never became hostile because Wynn and Kerkorian sat down and negotiated the final sales price," Green wrote.

"As for other coverage of Wynn," Green said, "both Las Vegas daily newspapers have reported extensively on the controversial Korean debt-collection practices of Mirage, which resulted in a flurry of lawsuits, a $350,000 fine against the company and charges that its chief counsel lied to regulators.

"Both Las Vegas dailies have reported extensively on the controversy over tax breaks sought by Wynn for his art collections at Bellagio and the Desert Inn."

"The Sun," he added, "regularly published criticism of Wynn by his competitors, including Donald Trump and the late Arthur Goldberg."

If there was any inadequate reporting about Wynn, it was done by the authors of "The Money and the Power," Green said.