Specialist
Former SVP & Treasurer at MGM Resorts International
Agenda
- US gaming industry update
- Competitive landscape – Wynn Resorts (NASDAQ: WYNN), Las Vegas Sands (NYSE: LVS), Caesars Palace, MGM
- Expansion update, margin health, cost-cutting
- Economic downturn scenario analysis 5. 12-18-month outlook
Questions
1.
What key headwinds and tailwinds should the investment community be monitoring in the gaming industry? How are MGM and other players exposed to these trends?
2.
How would MGM securing or not securing the Osaka-area licence change the company’s spend outlook?
3.
Can we explore a scenario in which MGM does not secure the Osaka-area licence? Would you expect the company to move more towards M&A, to compete more with the Eldorado-Caesars deal and just for overall growth avenues? If so, what might be available to add to the portfolio?
4.
What are your thoughts on the proposed real estate sale of MGM’s Bellagio and the MGM Grand? How should we evaluate that process, and what the proceeds might be used for?
5.
What are the implications of that potential Bellagio and MGM Grand sale on MGM’s EV and EBITDA multiples, if the company is viewed more as an operator? Would you expect any change, or a limited impact if the plan has always been to eventually sell those assets?
6.
What is your updated view on this mature gaming market being so levered? How might the expansion of online sports betting rippling throughout the domestic market be impacting players and their balance sheets?
7.
You mentioned MGM needs to be disciplined with its M&A to ensure it has an additive ROIC. This goes against the optimal capital structure, it might be a little bit undercapitalised. Which one would it prefer? Could it expand to regional or Brazil or Asia, or just have this less optimal capital structure?
8.
How should we assess overall spend by consumers and gamers on gaming and non-gaming revenues in Vegas, or for MGM overall? How can operators respond to the millennial base and capture their spending preferences?
9.
Can we examine that convention booking revenue for MGM? How much is the “in the year, for the year” for smaller companies vs big, pre-booked players that are a few years out? How do you foresee that trending?
10.
Can we explore MGM’s 2020 progress? I believe the headcount reduction is pretty much complete. What is the potential short- and long-run impacts of having less labour on guest experience, efficiency? What implications of the cost-cutting might not initially be apparent?
11.
How have marketing budgets trended in the gaming industry? How should we evaluate them being cut, and what would you say is an ideal marketing budget as a percentage of revenue? How does the loyalty programme fit in here?
12.
How have additional fees such as parking or resort fees played out for MGM and other players in this industry? As competition continues in a mature market, should we expect more of a push down on these extra, pure margin revenue drivers, and how does that impact earnings?
13.
How significant are these parking fees are, and let’s say they are eliminated in a downturn. Are they going to be spending that money anyway, for entertainment and for gambling, or would they be more frugal in that scenario?
14.
What are your thoughts around a bear-case scenario for MGM?
