Pundits are cold on MGM Date: 8/25/2016 I like to see what other people think about the MGM Springfield project and turned up a piece by analyst Howard Jay Klein writing on the investment site Seeking Alpha.
Klein was looking at the management tactics on the company and compared the MGM approach to plate spinning. If you’re close my age you might remember those acts on “The Ed Sullivan Show” where a guy would first balance plates on tall rods and then set them spinning. His skill was keeping the plates spinning and not falling.
Klein questioned whether or not MGM management has too many plates spinning and what this would mean for stockholders.
Klein had the following to say about the company’s current new casinos in the United States: “MGM National Harbor (Maryland) due to open at the end of 2016 or at latest February 2017. The design, location, feeder population base, market diversity are superb. Its competitive set will be Horseshoe Baltimore (Caesars) and Maryland Live! essentially. We’ve reconnoitered the area by car recently, seen the property and along with other members in our grading panel mark this one an A.”
Okay, that sounds optimistic.
Klein continued, “MGM Springfield. This is a downtown site in the heart of this old Western Massachusetts city with its principal feeder market coming from Hartford/New Haven. It’s due to open in mid 2018. It will be competing with a Penn National Gaming slot parlor near Boston already open and doing just about all right, and a mega property from Wynn to be opened in 2018 at Everett near Boston. The two Connecticut tribal properties are combining a proposal to build a casino on their side of the state line as a fighting brand to blunt the poaching of their market by MGM.
“This one’s facing very rocky soil in our consensus view and is an expression of an MGM management that does seem to want to dance at every party. Plate-spinning as a management mantra? It will wind up in MGP as a REIT asset and at best be a marginal contributor. We grade this a D.”
Wow. Now I don’t play the stock market, but it doesn’t sound very good.
Granted this is one guy’s opinion, but what he has written has been consistent with what I’ve read in the past. Some pundits believe the challenge for Massachusetts is the number of casinos the Legislature has licensed in a small state and one that is surrounded by other states with casino gaming.
Of course it’s too late to put the genie back in the bottle. The only way to decrease the number of casinos is probably through business failure and I can say I certainly don’t want to see that, especially in my hometown.
So what to do? I suppose we better hope the pundits are wrong. Regionally we need MGM Springfield to be a hit.
How would you represent your hometown? The folks at the Springfield Public Library have a wonderful contest going: “The Springfield City Library is looking for digital photo submissions for the upcoming ‘Springfield My Home’ photography exhibit. Photographers can submit work in response to the question ‘What do you love about Springfield?’ and earn a chance to win one of three prizes. The Central Library will announce the prizewinners at a public reception on Wednesday Nov. 2. Prizes include a $50 gift card to Red Rose Pizzeria for Best Photograph (amateur submission); a $50 gift card to Leone’s Restaurant for Best Photograph (professional submission); and two tickets to the Springfield Symphony Holiday Pops concert for the Best Springfield Spirit winner.” For more information got to http://www.springfieldlibrary.org/library/library-seeks-photos-for-springfield-my-home-exhibit. Sounds great to me, but I was wondering how you would visualize your hometown of East Longmeadow, Longmeadow, Hampden, Wilbraham, Holyoke, Chicopee, Agawam, West Springfield, Westfield, Southwick, Granby and South Hadley? I’d love to see and publish your visions. The opinions expressed in this column represent those of the author alone and not necessarily those of the owners or advertisers of Reminder Publications.
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