MGM CEO bets big on sports, public spaces and community spirit in Las Vegas in the aftermath of a massacre

Key Points
  • In their inaugural season, the NHL's newest franchise, the Golden Knights, is packing them in to T-Mobile Arena.
  • MGM CEO Jim Murren sees major league sports in the gambling-centric resort as a way to build community spirit and beef up local businesses.
  • "It makes Vegas a hometown," said one Golden Knights fan and a longtime Las Vegas resident.
MGM CEO Jim Murren bets big on sports

In a town made famous by its glittering lights and clanging coins, the raucous cheer of rabid fans is becoming more familiar and important.

In their inaugural season, the NHL's newest franchise, the Golden Knights, is packing them in to T-Mobile Arena, charging ticket prices higher than the league average. The team's merchandise sales rank fourth in the league.

And on any given night when the Knights play at home, the restaurants and bars surrounding the arena fill with locals and visitors, hockey fans and those sampling the sport for the first time. It's a boost to business and a boon to the global gaming companies heavily invested in bringing major league sports to town, hoping for a sustained boom for Las Vegas. The Park, a new outdoor dining and entertainment destination near the arena, was conjured as a community gathering spot and created with a more than $100 million investment by MGM.

MGM CEO Jim Murren sat down with CNBC at the Beerhaus, a watering hole at The Park, to discuss the impact of sports on the resort city and its businesses. Despite the skepticism of shareholders, Murren says investing in public spaces improves Las Vegas's business prospects. He sees sports the same way.

"We want to make sure that we drive traffic to the whole valley because that benefits MGM. We want to bring incremental traffic," he said. "The goal if you are the home team, as MGM is here, is to drive incremental visitors, not to grab visitors from our competitors, but to bring new visitors to town, because we recognize if we can do that, we're going to get a fair share of their pocketbook when they come."

MGM has just acquired the WNBA's worst performing team from San Antonio, renamed them the Las Vegas Aces, and is gearing up for an inaugural season in 2018, where the team will play at an arena in Mandalay Bay. The announcement was scheduled to happen at the beginning of October. But it was postponed after a gunman opened fire Oct. 1 on thousands of concertgoers from the Mandalay Bay.

In his first interview since the shooting happened, Murren told CNBC, "The first order of business of course is to work with the victims, their families, my employees, the community. It was completely inappropriate to talk about bringing that team here or to commercialize any of our venues, theaters, arenas, restaurants."

All marketing efforts ceased in Las Vegas in the immediate aftermath, not just by MGM, but by all the resorts and the Las Vegas Convention and Visitors Authority. There were cancellations and a drop off in bookings. But this is a city that relies on visitors for its bottom line. As marketing resumed, so did bookings.

Just shy of the three-month mark since the shooting, Murren said, "We're healing here in Las Vegas, and we've had a good couple months of recovery of our business."

The Golden Knights are a big part of the city coming together and celebrating civic pride. Outside the stadium one day, Katie Campo was dressed from head to toe in Knights gear. She described herself as a 15-year resident of Las Vegas and a huge Golden Knights fan.

"It's such a transient town and everyone has their home team and now we all get to experience it together," she said. "It makes Vegas a hometown."

Historically, sports in Las Vegas meant one-offs, specialized, highly-promoted events. Golf and tennis tournaments, rodeo and bull-riding championships, NASCAR, and especially boxing's prize fights would draw spectators to town and pack them in. But, for generations, the major sports leagues and some gaming authorities resisted locating teams in Las Vegas, worried about the overlap between sports and sports gambling. That has changed as the nation has moved toward wide acceptance of gambling.

"We have 150-thousand rooms to fill every day. So we need to keep finding new markets," said Rossi Ralenkotter, the CEO of the Las Vegas Convention and Visitors Authority. Sports fills the bill.

Shea Theodore #27 of the Vegas Golden Knights celebrates with teammates after scoring on a power-play goal with 2.3 seconds left in the third period to beat the Tampa Bay Lightning 4-3 at T-Mobile Arena on December 19, 2017 in Las Vegas, Nevada.
Getty Images

Visitors spend on average $800 on each trip to Las Vegas, according to Jeremy Aguero of Applied Analysis. Tourists who come for specific events, he said, tend to spend more, and it all adds up. One NASCAR race alone injects $150 million into the local economy. The NFL stadium being built to host the Raiders is projected to have a $650 million annual impact.

Murren is confident he'll see a positive return on the investment made in the WNBA's Aces as well, despite the trend of so many other teams in the league struggling to break even. MGM plans on adding their significant entertainment expertise to the game-day programming and creating a family-friendly environment that draws both tourists and locals.

"We have an embedded fan base. We have more kids in the Clark County School District than any company," Murren said. "We've got girls that are playing basketball right now in grade school and in high school and in college. These are young ladies that work, that have parents that work for us. It's about community engagement."

Winning teams attract bigger crowds, however. But Murren is optimistic the Aces can improve on their past performance.

"It's about leadership." he said. "It's about investing and it's about being passionate about sports and for MGM, passionate about women in the workforce, passionate about women succeeding. It's a core value. I think it fits nicely with us."

Before the Golden Knights took on the team with the NHL's best record, the Tampa Bay Lightning, the Park and Beerhaus were packed with hockey fans, sporting jerseys from both teams. (The Golden Knights went on to win 4-3 in the Tuesday night game.)

With massive dump trucks blocking the roadway outside the plaza as security protection, the band for the Golden Knights played on light-up drums as patrons streamed through metal detectors into the arena. It painted a picture of a city expanding its appeal as it contends with the concerns lingering after the Oct. 1 massacre.

That heightened sense of security, Murren said, is foremost in his mind, but also part of nurturing a sense of community.

"We evolve our procedures all the time," he said. "We continue to work very strongly with law enforcement and in the private sector, and we believe that as long as we continue to make that a priority, the focus should be on bringing people together, [creating] a sense of community, not [letting] evil win and [working] on building the shared experience."