In a letter to employees released today, MGM Resorts International CEO Jim Murren says he’ll be leaving the company before his contract expires but gives no reason for the premature departure.
“I did not make this decision lightly,” Murren says in the letter, without elaborating on the reasons behind his departure.
“I think that gaming both in Las Vegas and around the world has changed immensely since Mr. Murren assumed the helm of MGM, and it may be that the challenges ahead will demand a different skill set,” says gaming author and historian David G. Schwartz. “For example, gaming proliferation is now a fact rather than an avenue for expansion, and operators will have to learn how to increase revenues year after year without growing geographically. The advent of online gaming and sports betting in many other jurisdictions speaks to how the way that people gamble will change.”
Murren, who has led the company for 12 years, shepherded MGM through the recession, the aftermath of the 2017 shooting massacre on the Las Vegas Strip, and the firing of 1,000 employees last year under the banner of MGM 2020, a multi-million dollar cost-cutting effort spurred by activist investors.
A year ago, MGM named Corvex Management founder Keith Meister to the company’s board. Meister worked for investor Carl Icahn, who trades in shares of Las Vegas casino companies, and whose penchant for acquiring huge stakes in companies and forcing them to reward himself and other shareholders through stock buybacks, mergers, and sales has earned him the description “activist investor.”
MGM, under Murren’s leadership, has enjoyed a cordial partnership with Culinary Local 226, which represents some 60,000 hotel workers in Southern Nevada. In 2018, MGM was the second company (behind Caesars Entertainment) to agree to a five-year contract with the Culinary.
Last year, amid massive layoffs designed to boost MGM’s bottom line, D Taylor, president of UNITE HERE, the Culinary’s parent union, admonished Murren in a letter obtained by the Current that “Gaming expansion in most other states was predicated on the promise of stable tax revenue and good permanent jobs…”
“We support changes that protect the long-term health of the company, including the continuation of family-sustaining wages and benefits and adequate reinvestment in the properties,” Taylor wrote to Murren. “However, we will not stand by silently if the benefits of casinos and casino jobs are imperiled by the financial engineering of hedge funds and other Wall Street firms trying to extract value by cutting service levels, slashing wages and benefits, and reducing capital reinvestment.”
Murren has been criticized for public relations blunders, including suing victims of the Las Vegas shooting massacre, which took place on grounds owned by MGM and was perpetrated by a sniper perched in a Mandalay Bay suite.
MGM was the first company to eliminate free parking at its Las Vegas properties, a move other companies quickly followed. Wynn Resorts became the first company to restore free parking last year.
Murren, a Republican, has publicly supported Democrats — most notably Hillary Clinton against Donald Trump in 2016. Last year he hosted a fundraiser for former Vice President Joe Biden. He’s also criticized Trump’s travel ban in a CNN opinion piece.
“The travel and tourism industries create opportunities for middle-class workers and support one in every nine U.S. jobs. Unlike jobs in other industries, these travel jobs can never be shipped overseas,” he wrote.
Local accolades aside, Wall Street has remained hostile to Murren. Shares of MGM Resorts International rose seven percent following the announcement of Murren’s impending departure.