49°F
weather icon Clear

Murren: Coronavirus won’t have long-term impact on MGM Resorts

Updated February 12, 2020 - 2:51 pm

The coronavirus won’t have a long-term impact on MGM, chairman and CEO Jim Murren said Wednesday.

Macao was showing some improvements in early 2020 before the virus hit, Murren said in a fourth-quarter earnings call with investors.

Despite closures affecting the 41 casinos in the Macao market, Chairman and CEO Jim Murren — who stunned the industry with an announcement that he would be stepping down soon from both roles — is optimistic about the company’s future.

Murren cited a wave of positive indicators in Las Vegas, the early economic success of the company’s controversial MGM 2020 cost-reduction strategy and its plans to press ahead on nationwide sports wagering and developing an integrated resort in Japan.

“We are focused on the impacts of the coronavirus,” Murren said at the conclusion of his call. “We’re absolutely prioritizing the safety of our customers and our employees, but we feel that situation will be managed and the company is well positioned given our diversification as a global company and our balance-sheet strength.”

Murren listed several factors making him optimistic about Las Vegas’ future — a strong convention calendar; the anticipation of the National Football League Draft in April in which MGM’s Bellagio will have a major role; the record passenger count at McCarran International Airport; the arrival of the Raiders to Allegiant Stadium “in Mandalay Bay’s backyard;” and expansions by rivals Wynn Resorts, Caesars Entertainment and Las Vegas Sands with their Wynn meeting facility, Caesars Forum and MSG Sphere projects.

Meaningful real estate deals

“We’ve made a lot of meaningful progress with our real-estate transaction result in the $8.2 billion of net cash proceeds,” he said. “We’re using that dramatically reduced leverage to invest in Japan and in sports. We’re firmly on track to continue to announce additional real estate transactions this year,.”

“Our domestic business is very solid and we are very focused on these cost reductions that we know will support growth in cash flow and free cash flow per share.”

Earlier Wednesday, the company reported earnings of $2.012 billion, $3.91 a share, on revenue of $3.185 billion for the quarter that ended Dec. 31. That compares with a fourth-quarter 2018 loss of $23.3 million, 6 cents a share, on revenue of $3.053 billion. The high net income for the quarter was a result of gains MGM received with the sale of Bellagio in a $4.25 billion leaseback deal with the Blackstone Group.

Of the three Las Vegas companies with resorts in Macao, MGM is the least exposed because it partners on them with businesswoman Pansy Ho. Also, MGM has a more diverse network of casino properties domestically than rivals Las Vegas Sands Corp. and Wynn Resorts Ltd. Through 2019, Sands and Wynn have received more than 60 percent of their revenue from their Macao properties while MGM generates around 30 percent of its revenue from MGM Macao — on the enclave’s main peninsula — and MGM Cotai, just off the Cotai Strip on an offshore island.

Sands has six properties on the mainland and Cotai and Wynn has a Wynn Macao-Encore resort on the peninsula and Wynn Palace on Cotai.

Macao Chief Executive Ho Iat-seng last week ordered Macao’s 41 casinos closed in an effort to stem the spread of the deadly COVID-19 virus, which has now killed 1,118 with 45,210 confirmed cases, 10 in Macao, according to medical experts at Johns Hopkins University in Baltimore. Most of the confirmed cases are centered around Wuhan, in the Hubei district of central mainland China.

15-day casino closures

Ho indicated the 15-day casino closure could be extended, depending on developments toward stopping the spread of the disease.

Gaming industry analysts say the closure of all the Macao casinos in the market are costing their respective companies combined a total $100 million a day.

Investors boosted MGM stock during the trading day, but retreated after hours.

With volume twice the normal daily average, shares climbed 95 cents, 2.9 percent to $33.66 a share on Wall Street. After hours, gains were erased with the issue falling $1.28, 3.8 percent, to end at $32.37 a share, still near the stock’s 52-week high.

The Review-Journal is owned by the family of Las Vegas Sands Corp. Chairman and CEO Sheldon Adelson. Las Vegas Sands operates six properties in Macao and one in Singapore.

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.

Don't miss the big stories. Like us on Facebook.
Business Videos
Plans for luxury hotel on south Las Vegas Strip - VIDEO
Review-Journal real estate reporter Eli Segall speaks with Renee Summerour about a California developer's plan to help revamp the south Las Vegas Strip. (Renee Summerour/Las Vegas Review-Journal)
Two years until “I Do” - VIDEOY
Las Vegas locals Sam Cruz and Jeff Gaglione discuss their engagement, in their future wedding venue at Emerald at Queensridge in Las Vegas, on Monday, Feb. 3, 2020. (Elizabeth Page Brumley/Las Vegas Review-Journal) @elipagephoto
Chairman, CEO of MGM Resorts Jim Murren stepping down - VIDEO
MGM Resorts International CEO Jim Murren will be stepping down as chairman and CEO. (James Schaeffer / Las Vegas Review-Journal)
Wynn Las Vegas opens new convention center space - VIDEO
On Feb. 10, 2020, Wynn Las Vegas opened its new convention center expansion that more than doubled its sellable space. (Michael Quine/Las Vegas Review-Journal)
Local tattoo shop tattoos MAGIC attendees - VIDEO
Club Tattoo is giving away tattoos to the people who attend the biannual fashion convention throughout its three days at Mandalay Bay Convention Center. (Ellen Schmidt/Las Vegas Review-Journal)
New report shows January home sales jump - VIDEO
Las Vegas’ housing market had another big jump in sales from year-ago levels as prices stayed relatively flat, a new report shows. (James Schaeffer / Las Vegas Review-Journal)
Creed perfume store part of growing Las Vegas Strip luxury retail - VIDEO
Andrea DeCarlo, general manager at Creed at the Forum Shops at Caesars on the Las Vegas Strip, talks about her luxury perfume store Monday, Jan. 27, 2020. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Newest tech gadgets at store in Forum Shops at Caesars - VIDEO
A new store at Forum Shops at Caesars, b8ta, encourages shoppers to play with the hottest tech gadgets. (Elizabeth Brumley/Las Vegas Review-Journal)
Preview Las Vegas 2020 - VIDEO
Steve Hill, president and CEO of the Las Vegas Convention and Visitors Authority, hints at new branding slogan for Las Vegas, which will no longer be “What happens here, stays here.” The new slogan will be unveiled Jan. 26 during the Grammy Awards. (Renee Summerour/Las Vegas Review-Journal)
Boring Company could provide a solution to parking problems - VIDEO
LVCVA President and CEO Steve Hill believes a potential solution for parking problems is the Boring Company’s $52.5 million people-mover -- a system that could eventually be expanded citywide connecting resorts and even McCarran International Airport to the Convention Center.
The Blackstone Group has partnered with MGM Resorts to acquire more properties - VIDEO
A few months after the Blackstone Group bought the Bellagio for more than $4 billion, it has partnered with MGM Resorts on a deal to acquire two other Las Vegas Strip properties. (Michael Quine/Las Vegas Review-Journal)
CES Young Innovator Award winner explains ReDawn - VIDEO
Sofia Ongele explains ReDawn, which uses a Chatbot named Dawn to help users find resources after a sexual assault. (Las Vegas Review-Journal)
CES 2020: MedWand ties for title of Last Gadget Standing - VIDEO
Dr. Samir Qamar of Las Vegas presents MedWand, a medical device that allows physicians to examine patients remotely anywhere in the world, at CES 2020. (Elizabeth Page Brumley /Las Vegas Review-Journal) @elipagephoto
CES Flying Taxis
Bell Nexus EX4 and Hyundai SA-1 flying taxi prototypes from CES 2020. (Mick Akers/Las Vegas Review-Journal)
CES 2020 attendees rides in autonomous BMWs - VIDEO
BMW is pitching its reconfigured i3 Urban Suite, which holds a single passenger on a lounge-style seat, as the possible future of chauffeured rides at CES 2020. (Mick Akers/Las Vegas Review-Journal)
CES 2020: Small appliances unveiled in Las Vegas - VIDEO
The small appliances on show at Sands Expo at CES 2020 in Las Vegas include a Keurig cocktail maker, autonomous cooking system, nitrogen coffee ampules and more. (Heidi Knapp Rinella/Las Vegas Review-Journal)
CES 2020: The scooter that will remind you of Wall-E - VIDEO
Segway unveiled the egg-shaped S-Pod Scooter at CES 2020 that’s a seated version of their original scooter that can reach 24mph. (Rachel Aston/Las Vegas Review-Journal)
CES 2020: Before the floor opens at Sands Expo on Day One - VIDEO
CES 2020 opened its doors at 10 a.m. Tuesday, welcoming more than 170,000 attendees to the annual electronics show. (Elizabeth Brumley/Las Vegas Review-Journal)
CES 2020: A suitcase that follows you, video games to heal you at Pepcom's Digital Experience - VIDEO
Get a glance at Pepcom’s Digital Experience! a showcase of products that will be at this week’s CES convention. (Rachel Aston/Las Vegas Review-Journal)
CES 2020: Impossible Foods Inc. Debuts Impossible Pork - VIDEO
At a pre-CES news conference at Mandalay Bay’s Kumi restaurant Monday night, a company representative announced that the participants were the “first people in the world” to try the new plant-based product, which it provided as samples in the form of Impossible Pork banh mi, char siu buns, dan dan noodles, pork katsu, pork shumai and sweet-sour-and-numbing meatballs.
CES 2020: Impossible Foods debuts Impossible Pork in Las Vegas - VIDEO
Before a packed press conference at Mandalay Bay in Las Vegas, Impossible Foods executives introduced Impossible Pork, its newest product. (Heidi Knapp Rinella/Las Vegas Review-Journal)
CES 2020: The Future of Transportation - VIDEO
Many automotive companies at CES unveil their plans for the future of transportation including safer driverless cars, safety features and a partnership between Uber and Hyundai. (Las Vegas Review-Journal)
CES 2020: What you've missed so far - VIDEO
Catch up on the tech and events presented at CES 2020. (James Schaeffer/Las Vegas Review-Journal)
CES 2020: Samsung debuts 8k TV, MicroLED TV - VIDEO
2020 is set to be a major year for 8k screens, according to Samsung executives. (James Schaeffer/Las Vegas Review-Journal)
Las Vegas resorts welcome dogs to stay
Las Vegas properties are welcoming dogs more than ever. MGM Resorts International announced a new dog-friendly program across all of its Las Vegas properties in December. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Musk 'hopeful' for 2020 completion of underground Las Vegas project - VIDEO
Elon Musk tweeted Friday night that The Boring Company’s underground tunnel project in Las Vegas will be “hopefully fully operational” within the next year. (James Schaeffer / Las Vegas Review-Journal)
World Market Center celebrates topping-off ceremony - VIDEO
Las Vegas elected officials including Councilman Cedric Crear attend topping-off ceremony for the Expo at World Market Center in Las Vegas.
MSG Sphere in Las Vegas will be the largest spherical building in the world - VIDEO
The Madison Square Garden Sphere at The Venetian has now been under construction for about one year and is expected to be completed in 2021. (Michael Quine/Las Vegas Review-Journal)
Aria still thriving after 10 years - VIDEO
The Aria opened on the heels of the Great Recession and managed to survive. It is now known for its art, environmental sustainability and poker. (Rachel Aston/Las Vegas Review-Journal)
Opening ceremony of the first Chick-fil-A restaurant inside a casino
Opening ceremony of the first Chick-fil-A restaurant inside a casino at the Golden Nugget on Monday, Dec. 2, 2019. (Bizuayehu Tesfaye/Las Vegas Review-Journal) @bizutesfaye
THE LATEST
VICI Properties looking to expand in 2020

Executives said they’re interested in working with operators that have high customer loyalty, low cyclical risks and the ability to provide services that aren’t threatened by online companies like Amazon.