Friday, July 30, 2010

Steve Wynn (WYNN) Second Quarter Conference Call Gives Good Color on Las Vegas

Kid Dynamite blog has turned me on to the Steve Wynn (WYNN) conference calls, which - because Wynn is more straightforward than typical CEOs - are a great way to get color on Las Vegas and thereby MGM Resorts (MGM).

He gets in a couple really good jabs against his competitors - he may even be referring to MGM specifically here:

"One of the things that's happening here as the market softened and many of these companies with very bad capital structures neglected their properties rather severely. And the properties are all showing the wear and tear. They're showing the lack of capital expenditures. And the public, of course, takes note of this immediately. There's no secrets. The minute the place is not clean or it's getting threadbare, it has a very bad effect on your clientele. We go in the opposite direction, take advantage of our capital structure and make sure that we're pretty and all fluffed up all the time."

"And secondly, the reason our customer acquisition cost is up is that when companies, namely, our competitors, get desperate, there’s two things happen. They stop taking care of the building, and they increase their promotional allowances, to no avail, I might add. It's a one-way street to oblivion. But that's the natural knee-jerk reaction when they get desperate. They don't take care of their building, and they grasp for customers. And then it has an effect in the marketplace, and it takes everybody down."

WYNN has the healthiest balance sheet, and cheapest valuation, of the big three public casinos (WYNN, MGM, LVS).

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