Analysts tired of Steve Wynn’s rants

By Liz Benston

Monday, Nov. 15, 2010 | 2 a.m.

In the otherwise dull world of quarterly conference calls, analysts can count on Steve Wynn — the eloquent, philosophical and opinionated CEO of Wynn Resorts — to go off script, much to their consternation.

Wynn again delivered on those expectations this month during the company’s conference call to discuss third-quarter earnings. In between Election Day discussions of financial results and growth plans in China, Wynn launched into a lengthy rant directed at the Obama administration and Congress for “anti-business” legislation.

“I think that this stinging rebuke that the president is going to get tonight has to have a proper effect on him and other like-thinking hypocrites,” Wynn said during the call, in reference to that day’s midterm elections and the unfolding Republican gains in Congress.

Wynn’s latest criticism of Washington is a variation on a theme that began nearly two years ago when Wynn reacted to President Barack Obama’s comment that companies receiving federal bailouts shouldn’t travel to Las Vegas. Casino and tourism officials roundly criticized the remark, saying it hurt corporate meetings and incentive trips that make up a crucial business segment for Las Vegas.

Lately, Wynn has focused his ire on what he views as two major threats to the moneyed Americans who are current and future customers: the repeal of the Bush-era tax cuts and health care reform.

It’s a delivery that’s not only wearing thin for some listeners but raising concerns about the business wisdom of making typically private political views public.

Casino executives, including Wynn, have criticized lawmakers and regulators in states that have not embraced their industry with low taxes and other business-friendly measures. Executives have publicly denounced states such as Illinois and New Jersey, saying they have bungled efforts to encourage competition and casino profit.

And yet, this state-regulated industry prefers to lay low so as not to invite federal scrutiny. Like most businesspeople, casino operators may support a particular political party but prefer to keep their views to themselves so as not to alienate potential customers.

“It’s probably inappropriate for someone at a publicly traded company in a sensitive industry” to complain so loudly about the president, said Bill Eadington, a UNR economics professor and director of the Institute for the Study of Gambling and Commercial Gaming.

In October, Wynn appeared on “Fox News Sunday” to criticize the administration’s handling of the federal stimulus and health care reform — topics that have also surfaced on previous company conference calls.

Wynn has rung up Nevada’s congressional delegation to complain about the Democrat-led health care legislation. And he has regaled reporters seeking information on business matters with his dim view of Congress and the president.

On the latest call, Wynn said he expects his company’s health care costs to rise by as much as 12 percent — more than the 8 percent a year increase the company has experienced so far — as a result of the Democrat-led health care reform legislation. And he blamed the administration’s policies for tightened spending at his Las Vegas resorts, calling the public response “a major factor in prolonging the recession.”

“(O)ur customers are discriminating, well-to-do, very intelligent people. And they have money. And in the United States of America, people with money have been in the defensive crouch if they run a business because of the administration in Washington. It’s ... socialistic and aggressively anti-business.”

Wynn said his potential customers more appropriately feel “consumer disgust” and “fear” rather than a relative measure of consumer confidence.

“Nobody wants to take their bankroll out of their pocket because they don’t know what’s going to happen to them,” he said.

Some Wall Street analysts say they are tiring of indulging Wynn on politics when they have work to do.

“We know he’s mad at Obama,” said one analyst, who found it more productive to exit the Wynn Resorts call midstream and crunch numbers instead. “But this is not helping us learn about his company. It’s not considerate of our time.”

“For one hour every quarter we get to take his (business) pulse. He takes away from that” by talking politics, another analyst said. “I understand where he’s coming from. Half of the people on the call would probably agree with him. But it’s not the proper forum.”

Politics aren’t the only thing Wynn is passionate about these days. He has become an evangelist for the vegan diet among friends and colleagues and even developed vegan-friendly menus at all his Las Vegas restaurants.

“These kinds of things demonstrate the amount of intensity he carries with him. He is very high strung, intense and opinionated — an artiste in the classic sense,” Eadington said.

Like many executives at the top of their game, Wynn probably lacks people in his inner business circle who can check his emotions, Eadington said.

“These tirades are a reflection of what he believes in his heart. And a person of his authority is usually surrounded by people who are going to support his opinions.”

Politics, however, is a stickier subject, especially for companies scrambling to curry favor in countries weighing casinos. With profits flat-lining in many U.S. markets, casino executives are increasingly seeking expansion opportunities abroad.

“Getting into a political tiff with the president of the United States might be something the leadership of other countries thinks is unwise,” Eadington said. “It has the undertone of being a loose cannon. It might create nervousness in circles where they like quiet, button-down executives.”

The anti-Obama comments might play well in China, where Wynn Resorts makes most of its money and is planning its third resort, said Michael Green, a history professor at the College of Southern Nevada.

“This might be more of a wink toward Macau and how much he loves it there,” he said.

Both Wynn and his chief competitor in Macau, Las Vegas Sands CEO Sheldon Adelson, have frequently praised the Chinese government and casino regulators there — comments that analysts attribute as much to necessity as to Macau’s business-friendly climate and swelling casino profits.

“(T)here’s a stability, there’s a predictability there,” Wynn said during the conference call. “It’s not like here where nobody knows what to expect tomorrow.”

It’s unclear whether Wynn’s views have had much effect, positive or negative, on his casino empire. A handful of tourists contacted the Sun to complain about his comments on Fox, for example, hardly a groundswell of disapproval.

The conference call in question also included praise from Tom Marsico, a major shareholder who commended Wynn for “taking a public stand” and accurately assessing the sensibilities of his customers.

Trying to speak for your customers — especially a group as diverse as those who stay at Wynn Las Vegas — could backfire, Green said.

“Wynn is obviously entitled to his opinions,” he said. “But you can also beat a dead horse. And you can beat it so hard that people start questioning whether they want to have anything to do with you.”