Moment on Fox turns TMZ for Murren

You might have thought MGM Resorts International's best quarterly earnings report since before CityCenter opened in December 2009 would have Wall Street buzzing.

Not exactly.

When company Chairman and CEO Jim Murren did his victory lap with the national media following MGM Resorts' second-quarter earnings earlier this month, what do you think the press asked about?

The Kardashians.

It was almost, dare I say, Steve Wynn-esque.

Murren was at least in a good mood when he appeared on Fox Business with Neil Cavuto. MGM Resorts had reported
net income of more than $3.44 billion, thanks to a
$3.5 billion initial public offering on the Hong Kong Stock Exchange.

Murren wanted to discuss Macau. In the quarter, the MGM Grand Macau more than doubled its revenues to $668 million while property cash flow increased 177 percent. The 600-room resort has become one of the most profitable hotel-casinos in the market.

In an interview following MGM Resorts' earnings conference call, Murren
told me he expects Macau's $23.5 billion gaming market to double in size over the next seven years.

To open the Fox interview, however, Cavuto asked about reality television stars Kim and Kourtney Kardashian and their mother, Kris Jenner. They will soon open "Kardashian Khaos," a retail outlet that will "specialize in media and women's health, fitness and lifestyle,'' at The Mirage.

The Kardashians are more TMZ than Fox.

But Murren played along.

No, Murren, told Cavuto, he did not negotiate the deal. He hasn't even met the family. But he would visit the store when it opens.

Murren deftly turned the line of questioning toward his key message point: Las Vegas is on the rebound.

A new retail outlet at The Mirage is just a small example of business returning to the Strip. Customers, he said, are spending more.

"What's going on is that Las Vegas is coming back," Murren said. "It's been a long time coming."

With 10 Strip resorts, including The Mirage, MGM Grand, Bellagio, Mandalay Bay and CityCenter's Aria, as Las Vegas goes, so goes MGM Resorts. Two weeks ago, Murren visited with Wall Street. The hedge fund operators, he said, get spooked every time the market roller coaster ride takes a dip. They worry that a bad stock day causes potential Las Vegas visitors to cancel.

That isn't so, Murren said. Advance bookings at MGM Resorts' Strip casinos are continuing to rise and the company's convention business is on an upward trend through 2013.

"What's happening in Las Vegas is a good story," Murren said.

MGM Resorts real growth potential, however, is in Macau.

Following the IPO, the company took 51 percent ownership of the MGM Grand Macau. Hong Kong businesswoman Pansy Ho has 29 percent of the property. Shareholders own the remaining 20 percent.

The company's new controlling stake allows investors a greater view of the financial details and profitability surrounding the MGM Grand Macau.

Murren said the second half of 2011 has also started strong.

"There is no question the Asian markets are growing more rapidly," Murren said. "There is a tremendous amount of wealth creation in China."

Both the Chinese and Macau governments are spending billions of dollars to create the infrastructure necessary to visit Macau. That is one reason MGM Resorts is working with Macau to secure a site on the Cotai Strip for another company-operated hotel-casino.

MGM Resorts has another growth market through its luxury hotel division, which is bringing the MGM Grand and Bellagio brands to China, the Middle East and other foreign destinations.

The first MGM Grand Hotel opens this year in Sanya in Hainan Island. Other properties are planned for Beijing, Chengdu, Tianjin, Nanjing and other cities in the region.

Maybe the Kardashians will want to open stores there, too.

Howard Stutz's Inside Gaming column appears Sundays. He can be reached at hstutz@reviewjournal.com or 702-477-3871. He blogs at lvrj.com/blogs/stutz. Follow @howardstutz on Twitter.