MGM Mirage Crisis Averted...For Now

Earlier today, MGM Mirage CEO Jim Murren sent this memo to employees essentially blaming the media for the tumultuous week of peril, anxiety and controversy visited upon Nevada's largest private employer that ended with MGM Mirage covering recalcitrant partner Dubai World's half of a $200 million payment. In the long-term, this resolves absolutely nothing, but it gets them over the hump for this very moment.

Murren's was a baffling letter. First, he denied something the media didn't actually report -- nobody wrote that either MGM Mirage or CityCenter HAD filed for bankruptcy, only that one or the other might need to under certain circumstances and that they had retained bankruptcy attorneys, all of which is true -- and yet he also confirmed the bulk of what HAS been reported. Then he closes with an admonition to disregard "stories from others about what the future holds for us." Odd, that.

A blame-the-media campaign works pretty well in politics but not in business; nobody, least of all MGM Mirage employees, will believe that reporters had a hand in creating the situation MGM Mirage is in unless the case is being made that we didn't scrutinize the CityCenter plan better in the first place and ask harder questions about how this math could possibly add up. Otherwise, at least in this phase, we've gotten the story right at just about every turn in recent months.

Well, almost everyone has. This image and caption used to decorate AOL's presentation of the AP story on the debt payment was riddled with problems:

First, they're still stuck saying that the entire thing is just one 4,000-room resort called CityCenter. And they misspelled "project" anyhow. And this rendering, I think, must be a zillion years old. I can hardly recognize any of the CityCenter elements in it and have no idea what the tall tower in the middle is supposed to be. I'd never seen this rendering before, in fact.

But, regardless, MGM Mirage and everyone who is dependent upon the company lives to fight another day, although employees I know also tell me that their 401(k) matching stops and their salaries are frozen indefinitely starting Wednesday, April 1. Better than not having anything at all, I suppose.

This whole thing left me with a sense of deja vu until Miles reminded me that this is something like the fourth or fifth time some major crisis or calamity befell or involved MGM Mirage while I was out of town. I was also gone for the shootings at New York-New York, the car bombing at Luxor, the fire at Monte Carlo, the time the cousin of the guy making ricin at a motel prompted a partial evacuation of Excalibur and what almost was a major casino blackout last year.

So perhaps Murren is right. Maybe it is the media's fault. Or at least, this mediaman's. I accept responsibility -- hell, nobody at MGM Mirage does -- and I'm sorry.

Is Friday Doomsday for MGM Mirage?

I'm away and wasn't planning to be covering Vegas matters for the next day or two while I'm at Lackland AFB for my Little Bro's boot camp graduation, but I opened Jon Ralston's daily emailed RalstonFlash to find this as the first item:

Nugget No. 1 - Big day tomorrow in the CityCenter world. Both MGM MIRAGE and Dubai World must fund a payment and, sources say, so far Dubai World has not come through on its part of the transaction. If it does not do so, the project could be shut down Friday.

But MGM MIRAGE has other options, including funding Dubai's payment, too. And, the question looms, could the company find another partner at this point to infuse cash?

The reverberations if the project is padlocked will be felt all over the state, from the Strip to the Legislative Building.

Wowzer. The national economy is showing hopeful signs, but is tomorrow the day that Nevada actually falls off the cliff? I searched around to see if I'd missed any stories from either local newspaper on this and didn't find anything in today's R-J or Sun. But nope, nothing on either site nor on the blogs of the city's two key gaming reporters.

Am I missing something here? If Dubai refuses to pay, MGM may stop construction on CityCenter and the top headlines on local newspaper sites right now are about Legislature Democrats not having a budget plan ready by Monday and hearings on a lottery? I mean, those are worthy stories both, but does any of it matter if 10,000 construction workers lose their jobs tomorrow and 12,000 full-time jobs are thrown into jeopardy? Shouldn't both sites have countdown clocks or something?

Also strange, given this scenario, was the rather startling uptick in MGM Mirage stock right at the last few moments of trading today. See? (click on the image to make it clearer.)

Does someone know something? Or does someone think they know something and they're wrong? The stock, up 8 percent today, fell 9.4 percent in after hours trading.

I'd love to watch what happens at the opening bell tomorrow, but I'll be at a military parade for which I must leave my hotel room at 5:45 a.m. CT. "Eek!" in advance for all involved.

[UPDATE, 7:22 pm PT: At least someone besides Ralston notices this pivotal moment. The Wall Street Journal, of course.]

[UPDATE#2, 8:09 pm PT: The R-J just posted what appears to be Howard Stutz's piece for Friday's paper. No "breaking news" tag on it to denote its urgency, though. The Sun, despite having Ralston on staff and some of the reputed best minds in web journalism in their arsenal, still has nothing. Odd, that.]

How big, and how much, is CityCenter?

Sorry to revisit stuff we've covered before here, but I was struck this morning once again by the fact that the media is all over the place with the price of CityCenter. Howard Stutz in the Review-Journal refers to it as a $9.1 billion project, but Liz Benston and Lisa Mascaro, both of the Las Vegas Sun, put the figure at $8.7 billion in different stories.

Benston's piece even includes this explanation:

Dubai World says at the time of the joint venture agreement, MGM Mirage estimated CityCenter would cost $7.5 billion. MGM Mirage has since increased that estimate by about $1.2 billion, with further increases likely despite recent moves to scale back some aspects of CityCenter, the lawsuit says.

So I wrote to Alan Feldman, MGM Mirage's spokesman. As recently as Jan. 8, he told VegasHappensHere.Com: "The safest apples-to-apples would be our previously stated $9.2b less the just announced $600m in savings" from shortening The Harmon. I asked at the time if that meant $8.6 billion was the current figure and Feldman said yes.

Well, that was two months ago. Today, inquiring about who's right now, Feldman replied via e-mail: "The Sun is correct. $8.7 total, $1.2 of which we are hoping to finance."

Okey dokey, then, although the Sun and Feldman can't both be correct because the Sun was operating off of figures given to Dubai in 2007 and Feldman said two months ago that the figure was $9.2 billion less $600 million. See how this can make you crazy? And this is a PUBLICLY traded company!

To Feldman's credit, back in January he did offer this caveat: "This is a number that you need to understand is moving. We continue to bid stuff, we continue to get new pricing. We talk about these numbers as if they're fixed but they're really not."

I am not casting aspersions on Stutz or any other reporter here, so please don't take it that way. These numbers change by the week or month. It's dizzying. Especially when you receive two newspapers in one every morning and the same thicket of newsprint offers different numbers. So the best I can suggest is that journalists, every single time they write about this project, ask Feldman what the current figure is.

MEANWHILE, how BIG is CityCenter? Well, in April 2007, VegasHappensHere.Com puzzled over that, too. Different reports had it at 76, 66, or 67 acres. MGM Mirage's original literature when the project was announced said 66 acres, a New York Times reporter called it 67 acres and other media were using 76 acres.

At that point, Feldman responded: "Please use 76. There's some technical debate internally, but 76 is in use far and wide and it's not inaccurate."

Okey dokey again. But then I noticed recently that the press was using 67 acres and the signage at the condo-sales kiosk for CityCenter at the Mirage said 67 acres, too. So today I asked again. Feldman's response: "Acreage: 67 acres."

Well, where'd the other 9 acres go?

"I believe some land was transferred to Monte Carlo for a parking garage."

Must be some parking garage at 9 acres. I pressed Feldman to explain further and he said he didn't have the time. I suggested holding off on this post until tomorrow if it would make a difference. He said it would not.

So there you have it. Make of that what you will. What I make of it is that numbers are very loosey goosey in this project so critical to the welfare of Nevada that U.S. senators need to get involved in to saving it even as MGM Mirage also insists it is totally capable of paying to finish construction so chill out, Mr. Dubai Dudes and Mr. Wall Street Dudes.

No wonder, then, Dubai is so uncomfortable. None of the numbers MGM Mirage provide ever come with comprehensive explanations. The 10,000 employees that CityCenter will hire? Who knows if that's a real figure, either?