Thursday, February 10, 2011

Why Wynn Really Closed Alex

Oh, dear.

I just got through listening to Steve Wynn on a conference call with gaming analysts and shareholders regarding earnings, which were robust thanks, of course, to China. I'll get back to that in a moment.

First, though, some breaking news. It's Marilyn's fault. Asked about how new Wynn Las Vegas president Marilyn Winn Spiegel was fitting in, he sang her praises and offered this example:

I remember one conversation I had with Marilyn was about six weeks after she came. She came to my office and said, "You know, Steve, we have tremendous success with nightclubs and our very popular, hip restaurants. I think our steakhouse, SW, is the most successful restaurant in Nevada." She said, "The public taste has changed. We have a five-star restaurant, a Michelin-star restaurant, a five-diamond restaurant in Alex. People don't want to sit for three hours and eat dinner that way anymore. I'd rather repurpose that restaurant. I know that you love the idea that one of the restaurants has all those Michelin stars, and we've got three of them in the building. This one in particular, this gourmet kind of restaurant, I'm not sure we can't use that space more effectively in another way." And frankly I would have never questioned that restaurant on my own. Marilyn made me question that restaurant and she was right. It's a simple example of that was something she brought to my office that I would have missed. There's been more of that sort of thing.

So there it is. Yes, John Curtas, Alex was sacrificed on the altar of the nightclub set. By my calculation, Marilyn would have come to Wynn with this idea in late December and Alex was shut down not a month later. Spiegel came to Wynn from being a regional president for Harrah's. She's intimately involved with what's become of the Rio as well as Caesars Palace since the company took it over. I shudder to think of what she might have done with Bellagio's Conservatory had she been in charge back in the day. What a waste of non-money-making space! I fear Wynn is losing touch with his own philosophy that not everything needs to make money in order to add something intangible to the overall package that is his resorts.

If I were Paul Bartolotta, by the way, I'd be hugging ol' Marilyn even closer right about now. Seriously.

Meanwhile, the earnings call was fascinating, too, for how disturbingly, uh, solicitous Steve Wynn is towards the Chinese government. He said the Macanese authorities are very involved in the design of his resorts there by telling him what they'd like to see. You think even they buy that?

And then, a bit later, he said this:

About six weeks ago, Mr. Wen Jiabao (the Chinese premier, left) came to Macau and he said he hoped that the prosperity that was being enjoyed by the resort industry in Macau was being shared by the workforce. That was followed immediately by public comments by the (Macanese) chief executive. When our company hears those kinds of comments, we don't wait for a week or a month, we respond instantly and we increased the line employees ... by 6 percent. We were the first to do that not because we wanted to be first but because we respond directly to leadership given to us by the government. that's an important part of our strategy, of our identity in that community. Our job is to constantly refresh the notion that we are humble, proud and grateful to be allowed to be part of that scene and the way to do that in China is to take good care of your employees.

Why if I didn't know better, I'd think Mr. Wynn got ahold of the talking points of the Democratic caucus in the Nevada Legislature or the Culinary 226! Can you even imagine if Brian Sandoval or Barack Obama weighed in on what he might do with his profits? It gives me a headache, imagining it.

I know he's saying this stuff for the benefit of the Chinese media. But it is still very peculiar to American ears, especially knowing his list of grievances with the Obama Administration and others. He's bowing to Chinese demands because the nation can confiscate his business overnight if it so chooses. That's all.

11 comments:

Hiker said...

How to do say hypocrite in Chinese?

Max said...

Well analyzed, and quite plausible that your theory is correct. It is all still speculation, of course. Why not just ask the man? Max

THE STRIP PODCAST said...

Max - this isn't a theory. Those italic words are direct quotes from Steve Wynn. He's telling the story of how all of this went down.

detroit1051 said...

"People don't want to sit for three hours and eat dinner that way anymore. I'd rather repurpose that restaurant."
I can't believe Steve would fold just because Marilyn Winn Spiegel said that. What has happened to Steve? Has Andrea turned his brain to mush? How are Guy Savoy and Joel Robuchon doing?

And, why would Steve admit to doing what Marilyn suggested considering the properties her former employer operated? Pathetic.

Finally, anyone who uses the word "repurpose" is off my list.

briguyx said...

Actually what they're really saying is we don't want you to eat dinner for three hours when you could be out on the casino floor gambling or buying overpriced booze in our nightclubs!

Anonymous said...

Thankfully, I've heard that both Robuchon and Guy Savoy are doing very well. But, they also both recieve notable publicity from their resorts that Alex did not recieve...

Anonymous said...

For me the most interest part of the call was that on the first day of Chinese New Year, Wynn Macau won $46 million - in a single day - just on the tables. Compare that to Aria's most recent quarter, where they averaged $1.4 million per day in casino win.

Anonymous said...

That's the cost of doing business in a dictatorship. Thankfully, we don't live in one.

leelandreth said...

Wen Jiabao knows his political psychology...

Anonymous said...

Well with Marilyn Winn behind the wheel, it's only time before they begin "repurposing" other venues. Such as a bartolotta or completely shutting down the employee cafeteria and give maybe extra minutes for breaks for encore employees to eat at wynn hotel.

As for working underneath this windbag for nearly 4 years, i cant say there was anything she did do that benefited the company other then cut back and save for alot of profit to be saved and culiminated elsewhere.

Anonymous said...

I, for one, cannot wait until the Chinese government starts confiscating these American businesses. The day is coming. It can't possibly hurt Las Vegas any more than it's already hurting, thanks to the silent but massive outsourcing and off-shoring that casinos and gaming companies have done: Wynn, IGT, Bally, MGM Mirage, etc. It's happened, it's happening and not one single local journalist has written about it.

Wynn's comments are disgusting.