Friday, Oct. 29, 2010 | 2 a.m.
Nevada’s largest casino company recently bid farewell to its corporate name of a decade and adopted a highfalutin new one: MGM Resorts International. Soon, two other Strip giants may do likewise. It’s as if some fabled casinos are suddenly in a hurry to shed their skins.
Or maybe there’s some stigma about being Las Vegas, with the unemployment and foreclosures and all.
But no. That’s not it, experts say.
What’s really going on is that even in bad times, more casinos are thinking big. Worldwide big.
It’s all about an industry that’s changing from gaudy gambling halls to sophisticated entertainment centers with global reach and intricate financial dealings.
During the boom years in Las Vegas, changing a casino’s name was almost as straightforward as blowing up an aging hotel and erecting another — complete with a shiny new image — in its place.
Naming a casino company, however, is a more complicated matter aimed not so much at attracting customers as impressing and inspiring confidence on Wall Street. That’s a crucial consideration for an industry that depends on billions of dollars in financing to construct some of the world’s largest and most elaborate buildings. The recession notwithstanding, these decisions reflect a still-young industry with room to grow.
Such corporate makeovers go back many years.
Circus Circus Enterprises changed its name to Mandalay Resort Group in 1999 to capitalize on the cachet of its newly built flagship resort and further distance the company from its low-rent Circus Circus casinos — inventive properties that were nevertheless past their prime.
Its brand a reflection of its Atlantic City roots, Park Place Entertainment swapped its name for Caesars Entertainment in 2004 to reflect ownership of its prized Caesars flagship — a brand that would help the company break into new markets.
In recent years, Las Vegas giants have exported their special brands of megaresort overseas, staking major claims in Singapore and Macau. They also are eyeing similar developments across Europe and Asia — which include regions with more liberal attitudes toward gambling. For many lawmakers in this country, gambling remains a distasteful enterprise that has unparalleled financial advantages: tax revenue and political contributions.
MGM Mirage in June renamed itself MGM Resorts International to better represent the company’s “growing global presence” under a “unified brand,” CEO Jim Murren said.
Last month, Las Vegas Sands CEO Sheldon Adelson said he’s considering dropping “Las Vegas” from its name and adopting some variation of Sands International.
“The company is considering a name change to better reflect its global presence,” Sands spokesman Ron Reese said last week, adding that no decision has been made.
More than five years after buying Caesars Entertainment and retiring the corporate brand, Harrah’s Entertainment expects to rename the company Caesars Entertainment Corp.
Harrah’s isn’t saying when the change, first announced in 2008, will happen — only that it is in the works.
The new name “will provide our company with greater prestige and help attract strategic business partners as we pursue expansion opportunities in new jurisdictions,” Harrah’s CEO Gary Loveman said in 2008. “The change also reflects our evolution into a full-service entertainment company that offers a rich range of gaming and nongaming amenities to our guests.”
Renaming a company isn’t a flight of fancy, but rather a well-considered business decision with potentially significant implications, experts say.
There are costs associated with corporate rebranding efforts, although they are generally less than the millions of dollars involved in introducing a major consumer brand.
“Name changes are serious things,” said John Schadler, managing partner of advertising agency Schadler Kramer Group in Las Vegas. “There’s always a strong business purpose for it and a lot of thought that goes into it — in many cases based on gut and intuition and experience, but also research.”
Rather than enticing consumers, corporate name changes are aimed at the business world, Schadler said. His company helped MGM craft its new name and corporate logo. It has created ad campaigns for numerous resorts, including CityCenter.
The public doesn’t care as much about the name of a parent company as about consumer brands such as Bellagio or Mirage that have personalities and attributes people can readily identify with, Schadler said.
By contrast, corporate names can serve as important calling cards to business partners, Wall Street investors and other contacts, he said.
Changing a company’s name can also bring indirect benefits if it is perceived as a positive, said Barry Shier, managing principal of the Partner House, a Las Vegas consulting firm.
A corporate name change can boost stock price and spread goodwill among thousands of customers and employees who view it as an image upgrade. Anticipating such developments, institutional investors have encouraged corporate name changes, said Shier, a former Mirage Resorts executive who helped launch the resort for Steve Wynn.
Some companies have no reason to change their names, and may instead update their logos and other designs to project modern or progressive looks, Schadler said.
But that hasn’t been the case in the casino industry, which has grown exponentially, both in revenue and brand awareness.
The latest name changes reflect international growth, with brands that offer more than gambling, said Billy Vassiliadis, CEO of R&R Partners.
“They all recognize their brands have to be portable,” he said.
Similar thinking motivated Circus Circus and Park Place to change their corporate brands, said Vassiliadis, whose marketing and public relations firm worked on those efforts.
It’s also the likely motive for Harrah’s, he said.
Although Harrah’s trumpets its Caesars Palace brand as one of the world’s most recognized consumer brands, its corporate name, besides lacking cachet, is often mispronounced by people who are not gamblers or familiar with the company — an unfortunate irony for the world’s largest casino company.
Harrah’s has withdrawn from some foreign casino deals and is in financial retrenchment. Yet, executives have discussed the importance of the Caesars brand as a more effective calling card abroad over the long haul.
(A Harrah’s representative declined to comment on the name change, citing regulatory disclosure restrictions in advance of the company’s initial public offering of stock. Harrah’s shares are privately held.)
MGM’s adjustment emphasizes its expansion in such exotic locales as China, India and Dubai. It was also a decluttering effort of sorts, Schadler said.
The previous name, MGM Mirage, was an attempt to “take two core assets and pay respect to both sides” after MGM Grand’s acquisition of Mirage Resorts in 2000, he said.
The company sought to face the world with “a more singular brand identity,” Schadler said.
The long-term value of such a change may be in the eye of the beholder.
“Asking whether it’s worth it is almost like asking the cost of a great suit,” Vassiliadis said.
The answer will vary for each executive and his or her perception of brand value — which will determine the relative worth the companies place on a name change and how much they spend to make it happen, he said.
While the Strip giants expand beyond their base of operations, there appears to be no indication that the Las Vegas brand itself — although battered by the plunge in consumer spending — has lost its cachet.
Most people still think Las Vegas is a premier gaming and entertainment destination — downturn or no, Vassiliadis said.
Still, these giants “can’t just be Las Vegas companies anymore. Everyone wants to take their brand globally.”