Strip megamergers benefit small businesses, Jones says

Michelle Swafford

Thursday, March 10, 2005 | 11:09 a.m.

The pending casino megamergers shaking up the Strip won't hurt small businesses in the Las Vegas Valley.

In fact, they'll enhance opportunities for small companies, former Las Vegas Mayor and Harrah's Entertainment spokeswoman Jan Jones told Las Vegas Chamber of Commerce members.

Overall, chamber members at Wednesday's chamber luncheon at the Four Seasons said the merger of Harrah's Entertainment Inc. and Caesars Entertainment Inc. as well as the merger of MGM Mirage with Mandalay Resort Group would be good things for their small businesses.

But a few small-business owners remain cautious about the changes for fear the number of vendor opportunities would be reduced.

"Mergers are very much in the best interest of the city," Jones said. "They're an opportunity to grow revenue. When you maximize revenue you have capital to reinvest in the community and keep it vibrant."

Improving and expanding Harrah's diversity program for women and minority-owned businesses is a priority this year, Jones said. That includes hiring five additional employees for the diversity program and identifying vendors who may not have the lowest prices, but are great partners, she said.

"We want to make sure our vendors and our employees are representative of the community," Jones said.

Until the mergers are completed, companies are limited in what they can say and do, so vendors should be patient, she said.

Hugh Anderson, chairman of the Las Vegas Chamber, said small businesses would benefit from the mergers.

"As gaming enterprises grow, it will force small businesses to do what they do best: to be innovative, creative and entrepreneurial and respond to the needs of the big gaming companies," he said.

Shaundell Newsome, vice president of marketing and sales for Hands Ink Advertising, said his small firm would continue to struggle to gain advertising contracts with the mergers.

"In advertising, it has always been tough for small businesses," Newsome said of vendor opportunities. "They don't have the money to compete with the larger companies."

"What I think is important is the relationship," he said. "Does the opportunity shrink now? Will they sit back and think about small businesses?"

He said he hopes the casinos would consider advertising projects to give small advertising firms a chance at contracts, similar to the subcontracts that occur in the construction industry.

Chris Steely, vice president of Harrington & Reed Inc., said he is concerned about the number of opportunities for small-business owners. His company finds executives and managers for companies and links outgoing local talent with new companies.

"I think it will be a little more difficult for businesses like ours to get in to these corporations," he said. "Corporate entities making more global decisions doesn't promote and foster small business."

Although he worries it would be more difficult for small firms after the mergers, it would also be an opportunity for small businesses, Steely said.

"It's going to require a lot more persistence and tenacity to get there," he said. "It's more frustrating, but if they want their businesses to grow, they have to stick with it."

Cornelius Eason, president of Priority Staffing USA, said his company would likely benefit from the casino mergers. He currently provides temporary workers for Caesars, MGM Mirage and Mandalay.

"For me, it's a very positive thing," he said. "It's increasing our volume because, I think they've stopped hiring and are using temporary workers while they sort things out."

The resorts are mindful of small businesses, Eason said.

"There's generally anxiety when you have a large deal that is going to happen," he said. "This is not unique where you have an industry maturing and consolidating."