MGM initiates a "productivity drive" to achieve Vision 2020 goals.
In the spirit of "MGM 2020," the renowned Las Vegas-based resort and casino business, MGM Resorts International, recently disclosed a strategic plan intended to boost earnings by a whopping $300 million by the end of 2021. What's this endeavor all about?
"MGM 2020": More Than Just a Slogan
The public hotel-casino conglomerate, MGM, has unveiled a growth plan labeled "MGM 2020," focusing on cost-reduction as well as enhancing operational efficiency and better positioning within the industry. Based on a press release, MGM anticipates achieving a yearly adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) increase of roughly $300 million. By the end of 2020, an additional $200 million is projected, with $100 million slated for the end of 2021.
For those unfamiliar, EBITDA is a crucial metric offering insight into a firm's profits before debts, taxes, and depreciation or amortization. Adjusted EBITDA, on the other hand, is EBITDA with unforeseen costs and incomes eliminated.
MGM envisions several departments relocating to what they call "competence centers," aiming to bolster profitability. With a keen focus on escalating revenue, MGM foresees investing in new technology, specifically - you guessed it - a digital metamorphosis in areas like data, pricing, and customer loyalty initiatives.
MGM CEO Jim Murren revealed more insights into "MGM 2020" during a recent briefing. Highlighting the strategy's primary objectives, Murren stated that MGM will strategically develop "operational expertise," adhering to the company's well-established "best practices" during this period.
Delving into specifics, one of the ways MGM intends to meet the $200 million goal by 2020 is by cost-cutting via automation, resulting in employee layoffs. Further details on the exact numbers are still under wraps.
As revealed by MGM, some of the savings will come from shifting specific roles to other business units. This move is estimated to account for roughly 25% of the $200 million aim. Moreover, they're planning on leveraging distinctive marketing strategies to cater to the market, making up another 25%. According to Nasdaq, Jim Murren shared these insights:
"'2020' is the next step for us as an organization in our progress. We're building upon our strong foundation from the last few years to strengthen it, boost efficiency, and achieve sustainable growth and a superior margin. The 'MGM 2020' concept symbolizes the most efficient operational infrastructure our company can use."
Reminiscent of an earlier profitability strategy introduced in August 2015, MGM's Vision 2020 serves as its extension. In Murren's words, the organization has exceeded the original goals in Vision 2025, which he effortlessly added, "we had a solid 2018."
In other News
MGM's landmark year in 2018 brought competitive success, with multiple newly-opened hotels and casinos. Just a few examples include the MGM COTAI in Macau, MGM Springfield, MGM Park, and NoMad in Las Vegas. The company has even more plans of expanding to New York and Ohio.
The sports betting sector underwent a significant turnaround with the removal of the Professional and Amateur Sports Protection Act (PASPA) in May 2018. The international market, said to be worth billions, has European gaming companies dueling for dominance. Intertwining with this, in August 2018, MGM struck a $200 million joint venture deal with GVC Holdings, the owners of bwin and Ladbrokes.
GVC's former Coral Interactive CEO, Matt Prevost, was recently appointed as the new Chief Marketing Officer (CMO) for this alliance - a statement by EGRglobal revealed this change. Following Adam Greenblatt's appointment as CEO, this is the second high-level management hire concerning GVC's overseership.
To reiterate, Jim Murren expressed MGM's commitment to emerge as the sports betting market leader by the end of 2021, stating, "We're confident about 2019 and beyond."
(P.S: Nothing's changed in terms of content, just a change in narrative.)
Based on recent events, Murren's "MGM 2020" forecast might turn out to be accurate. To kick off the new year, the newly-opened MGM Park on the Las Vegas Strip featured a performance by the multi-award-winning artist Lady Gaga. She's been gracing the stage there since December 29th, with at least 74 planned shows. It's rumored that Gaga earns over a million dollars for each show. The cost of success.
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Source: www.onlinecasinosdeutschland.com
