This is a partial transcript from "Your World with Neil Cavuto," June 16, 2004, that was edited for clarity.
NEIL CAVUTO, HOST: Well, the deal now official. The folks at MGM Mirage are popping open the champagne today after Mandalay Resort agrees to the $4.8 billion offer. The combination catapults MGM to the top spot in the gambling world, where on the Vegas strip alone it will control a third of the casinos and about half of all hotel rooms.
Joining us now is the president and the CFO of MGM Mirage, Jim Murren.
Mr. Murren, good to have you.
CAVUTO: Will they approve this?
MURREN: Well, I don’t think we’d go this far if we didn’t get pretty good legal advice. And our counsel has made our board quite comfortable that this will pass regulatory muster.
CAVUTO: All right. But now it isn’t a slam-dunk, right? I mean, there was some concern obviously on the part of Mandalay that it might not go through. And they wanted some assurances of that. Ultimately, some of those assurances were waived. Where does this stand and how long would it take to approve?
MURREN: Well, I think that was a bit of a confusion. Mandalay never said — or I think would say today — that they were concerned that it would go through. They simply said that they wanted all regulatory requirements to be assumed by MGM Mirage. And as we got into it, we understood, and we accept that responsibility.
So I wouldn’t say that Mandalay was concerned about that. They just wanted us to bear that responsibility, and we are happy to do so.
CAVUTO: Mr. Murren, what will be your boss, Kirk Kerkorian’s, role in this undertaking?
MURREN: What will be Kirk Kerkorian’s role?
CAVUTO: Mm hmm.
MURREN: Well, he is a very large shareholder. He owns about 56 percent of MGM Mirage, and he will be a very large shareholder of the combined company.
CAVUTO: Will he have day-to-day authority over this.
MURREN: He doesn’t today and he wouldn’t then.
CAVUTO: All right. But when you control that much stock, you are not exactly a passive player, are you?
MURREN: Well, he’s on the board of directors. He is on the executive committee. But I think that most people have characterized MGM Mirage as an independently run company. It’s run for the shareholders. And, of course, he’s a large shareholder, and so am I — a much smaller shareholder — but we are running the company for the stakeholders.
CAVUTO: All right. Well, you are not exactly chump change, Mr. Murren. Let’s talk a little bit about — we’re taking a look at your stock, and then we’ll take a look at Mandalay here.
The gambling environment, particularly in Las Vegas right now, how would you define that? It seems to have picked up. The improving economy I’m sure helps, more travel, vacationers who have other things in mind than just going to hit a casino. What is driving this?
MURREN: Well, I think you just touched on it, that I think people mischaracterize us as a gaming company. We really are much more than that. And over half our revenue comes outside of the casino even now. And in this combination, it would be closer to 60 percent.
So, a few years from now, I don’t even think you’ll call us a gaming company. You’ll call us an entertainment company, because that is the direction we are going. And that is really why Las Vegas is doing so well and why we’re having record earnings, Mandalay is having record earnings, and the city at large is doing better than ever before, because we’re on the radar, globally, from an entertainment perspective.
People kind of want to come out here. And it is a fun place and it’s a good value. And a lot of people don’t even bother playing in the casino, and that’s OK with us, because we do well in those other areas.
CAVUTO: Could I ask you — it’s a goofy question, but I have heard it passed along for me from viewers, that it is hard to book a weekend in Las Vegas now, even with all those properties. And you cover the high, medium, slightly below medium end — that it is hard to get a room on the weekend. Is it that bad?
MURREN: Well, it is. And I think that touches on the competition issue. We are building as a community as fast as we can. Steve Wynn is going to open a beautiful property next year. Venetian, the Mandalay properties, the MGM properties, Caesar’s, Harrah’s, Rio, we are all expanding, and we can’t keep up with the demand.
And it’s tough to get a room. If you would have told me when I was on Wall Street that, you know, a 5,000-room hotel would be sold out most every night, I would say — I’d say you’re nuts. But that is the reality today.
CAVUTO: Yes. I think you are right. Mr. Murren, thank you, again. Congratulations. Good luck to you.
MURREN: Thank you. Thank you very much.
CAVUTO: Jim Murren, the MGM Mirage president.
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