MGM Resorts distances itself from bankrupt MGM Studios

By Steve Green

Thursday, Nov. 4, 2010 | 8:53 a.m.

The worldwide value of MGM Resorts International's brands was highlighted today when the company moved to clarify for investors, customers and vendors -- particularly those overseas -- that it is not affiliated with the bankrupt MGM Studios.

"MGM Studios is a completely separate entity with no common ownership," Las Vegas-based casino resort operator MGM Resorts said in a statement today after MGM Studios filed for bankruptcy on Wednesday. "The filing has no impact whatsoever on MGM Resorts International."

Metro-Goldwyn-Mayer Inc. of Los Angeles, known as the distributor of James Bond and Rocky movies, filed for Chapter 11 bankruptcy in Manhattan federal court after rejecting a takeover bid by Lions Gate Entertainment Corp. and billionaire Carl Icahn, Bloomberg reported.

About 80 percent of its creditors support a pre-packaged plan to extinguish about $4 billion of debt and install managers from Spyglass Entertainment Group Inc., the producer of "The Sixth Sense," Bloomberg reported.

Billionaire and MGM Resorts board member Kirk Kerkorian -- who through his Tracinda Corp. holds a 30 percent stake in MGM Resorts and is its largest shareholder -- controlled MGM Studios through 2005, when he sold it to investors.

Today's announcement by MGM Resorts distancing itself from MGM Studios highlights MGM Resorts' growing international brand.

The casino resort operator not only attracts international gamblers to its Las Vegas and Macau resorts, but has a branding division called MGM Hospitality that brings MGM Resorts' management expertise and brands to hotels around the world with partnerships that are both gaming and nongaming.

This division was discussed Wednesday by MGM Resorts Chairman and CEO Jim Murren, who in the company's quarterly earnings conference call noted the division has arranged for 16 deals involving the MGM Grand, Bellagio and Skylofts brands. Locations for these deals include China, India, Egypt, Vietnam and the United Arab Emirates.

Murren called this division, headed by MGM Hospitality CEO Gamal Aziz, a "large and growing international opportunity."

"This is a very capital-light enterprise for us. It allows us to grow are brands internationally and expose our brands and our form of hospitality to literally millions of people and it's a great cross-marketing opportunity and we're very excited about it," Murren told analysts Wednesday.

The first property, a 665-room MGM Grand, is to open in just over a year in Sanya, China, one of four such projects in the development pipeline in China.

The company's global aspirations were earlier highlighted on June 15, when shareholders approved a plan to change its name from MGM Mirage.

The change "honors our heritage, better represents the growing global presence our company has today and positions us to move forward under a unified brand strategy," Murren said at the time.