How MGM Resorts Thinks About Growth, Efficiency, and $12.5B Investments

Glenn: Everybody’s your hospitality. Friend Glenn here in Las Vegas, Nevada, coming at you from the incredible Mayfair Supper Club here at Bellagio. I got an incredible guest with me today, Sarah Rogers. She’s the SVP of corporate finance for MGM Resorts International, a company that owns this as well as a lot of properties up and down the strip and around the world. Sarah, how are you?

 

Sarah: I’m great. Thank you. It’s so great to see you. So. All right.

 

Glenn: So how does somebody like you get involved in corporate finance in Las Vegas? How does something like that even happen?

 

Sarah: Oh that’s a it’s a windy road story. So I started my career in New York. I worked on Wall Street for close to a decade. I did equity research and equity sales. Then in 2009, there was this great financial crisis, as you know, and I moved in.

 

Sarah: Oh, yeah.

 

Glenn: There’s still some cranes down there to remind.

 

Sarah: Us of it. Yeah, yeah.

 

Sarah: So I moved into a team that was called it was kind of a multi-asset sales team, and MGM was one of my favorite pitches, so kind of to an equity investor, I would say, why are you buying the equity here? You could buy the debt and get an equity like return and be higher up on the capital structure. And during that period, MGM had issued a lot of stock Tracinda became no longer the the, you know, majority shareholder and the company was in a place where they went out to look for an investor relations person. And I came out to interview for that job and thought, well, I could do this.

 

Glenn: That’s cool. And investor relations person is someone who does public relations but specifically geared towards that, those financial messaging.

 

Sarah: And kind of having that background where I could speak to the debt and the equity was helpful during that time. So I bought a dog named her lucky and and moved to Las Vegas. And that was in 2009.

 

Glenn: There’s so many great stories of people just picking up and coming here to Las Vegas and reinventing themselves in new and unexpected ways. So explain to our our friends out here what does an SVP of Corporate Finance actually do? What is your role? What are your responsibilities?

 

Sarah: Sure. So I oversee investor relations. I also oversee mergers and acquisitions. Treasury. So that includes things like, you know, swaps, derivatives, share buybacks and just cash management of the business. And I also oversee capital markets. So anytime we’re doing a bond issuance or an equity issuance, anything like that.

 

Glenn: Wow. That’s really that’s so beyond like what I do. I don’t understand any of this this kind of stuff when it comes to to it. So how does that help really steer the company in the right direction. And you know, you’re probably thinking about ten different things between capital expenditures and refinancing debt and all of these kind of things all at once.

 

Sarah: That is true. I will say we have a team of I just say really brilliant professionals that that all have, you know, kind of specific hats to think about those things separately. And and it depends on kind of what the market is doing to decide what trend we’re going to play into at any given time.

 

Glenn: So how do you figure out really what to do, when to do it? It seems very complicated in that sense, because not only are you trying to figure out what the short term strategy is, but sets you on the path for long term success while also satisfying shareholders and your customers that are out there right now enjoying themselves.

 

Sarah: Yeah, I think there’s kind of two hats from a financial perspective. One is to make sure that when we’re operating, we’re operating as efficiently as possible, right. So making sure that the margins in our business are strong, that you’re you’re growing your revenue and you’re not increasing your your costs significantly. That’s kind of number one. And then that that operational business creates cash flow. And once we pay for our cost of debt, taxes and all that kind of stuff, and then how do we deploy that cash in a way that is most efficient for our shareholders? And we’ve we’ve done different things. We’ve bought back almost 50% of our market cap over the last five years, and now we’re deploying capital for projects like Japan, New York, etc. but the other fun things that we get to do are build businesses like Mayfair Supper Club here at Bellagio. And another really good recent example is we we allocated capital where we saw a really strong return at Borgata. And so we put money into a high limit gaming area and kind of a focused Asian BBQ pit with the noodles bar, all that kind of stuff. And that has shown just immediate near-term results with, you know, us outperforming the market and growing share. And that’s what we look for.

 

Glenn: So were you involved in deals for when you took over like 100% of Borgata, for example?

 

Sarah: That was probably before my time. So I came into corporate finance originally, and then I had a bunch of operational roles within MGM resorts, and I came back into corporate finance in 2021. Yeah.

 

Glenn: That’s cool. So it’s interesting to see how all of these companies develop specifically speaking at MGM resorts. You know, we’ve already learned that it’s come together through a variety of mergers and acquisitions. One of the most interesting parts of it is in the earlier days of modern Las Vegas, when all these new resorts were starting to go up. I felt like some of the companies didn’t want to go all in. So I think MGM had a partnership with Circus Circus at the time, which was then bought. It was like 5050 owned at the time, and then they they got the rest of it. So it’s not uncommon for there to have been a lot of partnerships. You don’t see that kind of thing anymore, which I think just speaks to the ever changing and evolving nature of this business as it’s matured specifically since the time you’ve got here. It’s changed tremendously, I would say in the last 15 years.

 

Sarah: Yes, it really has. You know, when I think about the time that I joined in 2009 we issued secured debt at over 13%. Right. And, you know, obviously that story has changed dramatically over the last 15 years, much to our favor. So that’s a good thing?

 

Glenn: Yeah. For sure. 13% is an awful lot to be able to. I feel like that’s what my. My parents were paying back in like 1982 for a mortgage or something like that. So one of the things you’re thinking about is expenses. So how are you thinking about lowering overall corporate expenses without kind of affecting the operations of the business itself?

 

Sarah: Yeah, I mean, I’d say that we look at our business with a continuous improvement mindset. So we’re kind of always thinking about and you think about it like you would run your own.

 

Glenn: I’m all about like get 1% better every single time and that you keep moving forward. So how do you think about it?

 

Sarah: I mean, with with a finance hat on, you’re kind of always saying, I mean, good examples are, you know, cost of capital, you know, is there an opportunity to refinance the debt that we have at a lower cost? And if so, well, we should do that.

 

Glenn: Right. But maybe not today. But maybe if interest rates start to come down over time, it might be more feasible for you. I’m just making all that up. I don’t know what she’s what the actual things are there, but generally speaking, that’s the kind of things that you’re looking out and thinking about.

 

Sarah: Yeah, absolutely. And I think as a company overall, we’re looking at our operations every day the same way that any, you know, small business or even, you know, somebody who operates their own home looks at and says, could we be doing this better? Could we be doing this with less regular costs?

 

Glenn: Right. One of the conversations I’ve been having, I think all year, whether I like it or not, is about a I, right? It’s too overwhelming. And I think a lot of us out there are seeing the sense of AI washing people, calling products AI when they aren’t really AI. But thematically speaking, it’s really all about being able to get more done in a much more efficient manner. So how are you thinking about maybe leveraging technology so you can make everyone’s jobs easier and make them more productive?

 

Sarah: So we’re in the, I would say, the very early stages of investigating AI with a finance lens, and I think the opportunities where we see it being most applicable are in places like procurement. Right. Being able to kind of scan contracts and get the key points up front and making sure that we, we know what we’re getting into without having to spend tons and tons of time reviewing everything. Yeah. And things like when you have large data sets, as you’re evaluating, you can imagine what type of information we receive on a daily, weekly, monthly basis on all of our portfolio, consolidating that and getting some headlines on where we see the KPIs.

 

Glenn: I guess you and your team are highly focused right now on trying to figure out pricing going forward when pricing going forward is very uncertain. How do you like make any decisions when there’s so much uncertainty out there?

 

Sarah: I mean, the good news about being this behemoth, operator, is that we have the ability to lock in prices and work with our vendors because we’re a large buyer, to get some visibility on what we expect our pricing to be.

 

Glenn: I’d say that’s really interesting. So how are you? Like, how are you thinking about processes and changes? Do you think that will permanently change the organization? Where do you think there are opportunities for for that? Now, the reason why I say that is speaking to a lot of hotel owners, operators, management company CEOs, and they’re finding a lot of ways to utilize technology to just save time and get rid of the boring stuff that people don’t get excited by.

 

Sarah: It’s less in my world, but I think areas like in terms of like AI specifically where we can use AI to get rid of some of these boring things. I mean, it is true in terms of like reviewing contracts, you know, can you do that super fast? Can you review invoices and, and pay them faster by having technology?

 

Glenn: Yeah, a couple of a couple of my clients are all about that invoicing. Particularly I just did a video series with one client that handles all the alcohol invoicing, which is interesting because all the different jurisdictions around the country have all these different rules, and it gets really, really super complicated. So what you might be doing here in Las Vegas is very different than what you’re doing at MGM Grand in Detroit, which is very different than in Yonkers, right? So people need that, that kind of help. So what do you think about data and utilizing the data that’s out there through AI to maybe help you find patterns and opportunities you weren’t thinking of before? Like, maybe you didn’t realize that people really love strawberry muffins, but you didn’t realize that before. You know what I mean for sure.

 

Sarah: I mean, when you think about all the data that we get, I mean, yeah, one could look at the the menu here at Mayfair and say, you know, this one’s not selling, this one’s selling. And, you know, how do we change the menu around to target. You know those those. Yeah. Taste.

 

Glenn: Yeah for sure. And one of my, one of the people, one of the companies that I work with, they’re utilizing AI and they’re really focused on cross utilization ingredients. So a place like Mayfair could then cut down on the amount of, you know, like instead of ordering 100 different things, they could order 40 different things because they’re able to use tomatoes in eight dishes instead of two dishes and stuff like that, which is really, really fascinating to me. So how are guests preferences kind of and informing you in the finance kind of universe.

 

Sarah: You know? Well, okay, so I thought about this in a way of, you know, from a finance perspective, we don’t have a lot of say in terms of the broader guest experience, but as a company, we have this, you know, say yes mentality and a big focus on how do we all play a role in the guest experience. So one of the fun things that we did as a as a corporate finance team was we asked the head of hospitality to come to one of our corporate finance team meetings and we said, you know, over the past year, we have collected ideas and thoughts from our own, either personal or business travels that we want to share to you as concepts that could work in the hospitality world. And I think it was appreciated and a fun conversation, and it gave us all an opportunity to kind of lean into our more creative and hospitality minds.

 

Glenn: Yeah, that’s really that’s really cool because the operations people and the finance people typically have very different brains, right? Not one is not better than the other. They’re just different. Like, I was born more of the creative type of personality. And I don’t understand the numbers at all, you know, except except likes like this video. I understand those those numbers over there. So what advice would you give to like, younger people? Because my guess is you were interested in finance first and never really thought about hospitality. Generally speaking, I’m just guessing there. But am I right?

 

Sarah: 100% accurate? Yeah. Good guess so. Meaning for young people, how do they get into.

 

Glenn: Yeah. One of the problems that I’m seeing is we talk a lot and we’re going around in circles about how to get more young people involved in this incredible industry. And I would like to see people put the dots together that no matter what it is that you’re passionate about, hospitality has that. Nobody out there is thinking, I want to go into mergers and acquisitions and finance and think about, oh, I could do deals and buy and sell hotels and hotel companies and all of that kind of stuff. So I’m trying to get people to see that. So younger people want to be in our business more.

 

Sarah: Yeah. I mean, the greatest thing about being in finance for a company like MGM resorts is that you get to experience the fun side. So, you know, every day I get to walk out and have lunch at one of these great venues, if that’s what works for the schedule that day, which is, believe me, a lot more fun than working, you know, on a trading floor time to time.

 

Glenn: I believe you as someone who has never worked on a trading floor, I did see a I did see a couple of movies where they had a trading trading floor, so I know it’s not not fun at all. So before we wrap up today what was the biggest challenge that you took on professionally for a job where you might have felt most uncomfortable? For me, it was quitting a job that I was comfortable with and starting this business with. No. With no net. Right. Yeah. With the family and stuff like that. So I’m all about getting comfortable with being uncomfortable. So I’m sure at one point you had to take a big risk because you don’t become SVP of corporate finance without taking some big risks and trusting in yourself, even if you don’t have the confidence in yourself.

 

Sarah: Yeah, I love the statement getting comfortable being uncomfortable. I believe in that. And I think that that, like, grit really shines through over time. For me, probably the biggest you know, chance that I took was in 2015. I kind of raised my hand and said, I want to move to Macau cow. And it was a time in this industry where now it feels like more online gaming and all this stuff is like what the real trend is about. But it was a time where Macau and its growth profile was just astronomical.

 

Glenn: It went from this and Vegas being all the way up here to this.

 

Speaker5: Yeah, yeah.

 

Sarah: And I just was like fascinated by this crazy bull market that was happening in the integrated resort business in that part of the world. So I raised my hand. I said I was interested in going and I think I was there in a month.

 

Glenn: Wow. That’s that’s pretty wild. And I’m sure you learned a lot because the the market, there are a lot of Chinese people. Macau used to be a Portuguese colony that was reabsorbed into China, but they have a special like zone, kind of like Hong Kong as well. Except this is the only place in the country that allows gaming. So it must have been really interesting to see different habits from what I’ve seen is people just go to a gaming table and they stay there for like 48 hours and someone will. They’ll sip some soup or they can, which is very different than the vibe here, which is a lot more about hanging out and being social and then gaming for sure.

 

Sarah: People here, you even see the way that the the dealers interact. They’re telling jokes, they’re smiling, they’re laughing, they’re it’s much more like a, like a business. People are there because they are there to win.

 

Glenn: Yeah. I went to a, I went to.

 

Glenn: A casino once in, in Canada, I think it was outside Detroit and Windsor. And this was way before you opened. Don’t worry. And I was playing, I decided to play craps, and I, you know, I got a point, and I was like, yeah. And like, everyone was looking at me like I committed the biggest sin ever, you know? Yeah. So don’t.

 

Speaker5: Ever.

 

Glenn: Don’t have too much fun in markets where that’s not the, the cultural norm. So what are you most excited about going forward over here?

 

Sarah: Oh, I’m super excited about you know we’re looking at a strong fourth quarter a lot of good convention business coming back in 2026. Here in Vegas, our regional properties are, you know, just Steady Eddie and kind of you know, good, good growing business digital for sure. We just talked about that. For us, our interest in bed MGM is just starting to take off. And then MGM China continues to kind of be a dominant operator and is doing just exceptionally well in the premium mass business. And I’m super excited about Japan, too. I mean, it’s a it’s a ways off, but when it comes, it should be massive. It’s it’s going to be the only integrated resort in the entire country. And we’ve seen what other markets in that part of the world look like when we open a big integrated resort like that, and it’s billions of dollars in profit.

 

Glenn: Yeah, I mean, look, just look at like Singapore and you’ll know exactly what we’re talking about over there. That’s an amazing opportunity for you. So how are you folks maybe approaching that project from a financial perspective, based on all of these technological, technological leaps forward and changes in consumer behavior and all of these kinds of things.

 

Sarah: Yeah. Well, from a financial perspective, there’s a big credit facility there. And then we’re putting equity in in our partner Orix is putting equity in. And then we’re looking at a 2030 timeline for opening and can’t wait to get, you know, all of the the fruitful returns on that big investment from that point going forward in terms of technology and where that plays a role, that will really be up to the hospitality team as they design and develop the property to have, you know, state of the art check in process, state of the art rooms and all kinds of the latest innovations in food and beverage and experiences.

 

Glenn: Why did the Japanese government decide to go with Osaka rather than another city?

 

Sarah: I think that the driver for that was ultimately kind of like the United States, right? Where each different jurisdiction or city can say, we want this or we don’t want this. And Osaka, from what I understand, has always been sort of the, the innovator and, and the, the leader in terms of change. And so it really made sense that they were the ones who said, we want to do this.

 

Glenn: That does make sense. And, you know, here in the United States, it started off here in Nevada, of course, then Atlantic City in New Jersey happened. And then I think once Biloxi opened, that kind of opened up the floodgates in Tunica when Mississippi went. And that kind of changed it all the other states started to say, oh, I see what’s going on here. And I think that really transformed the entire gaming industry. And I suspect the same thing is going to happen overseas. So even as this market may be maturing, there’s still so many opportunities for you folks all around the world as people realize that integrated resorts is not necessarily just about gaming, but about really helping the overall economy through entertainment and, you know, concerts and food and beverage and all of that kind of stuff. Jobs. Yeah. I can’t imagine how many jobs you’re going to have over there.

 

Sarah: Yes. I mean, we’ve begun the process of you know, creating programs in some of the colleges so that they can start to learn more about the hospitality industry in Japan. But yeah, I mean, think about the amount of dealers that we’re going to have to train.

 

Glenn: Excellent. Well, thanks so much. Any final words before we wrap up?

 

Sarah: Well, I liked your your concept of, you know, what gets people, young people interested in finance. But, you know, this is a super fun industry. And I would absolutely recommend it to anybody who’s interested in finance and hospitality.

 

Glenn: I can’t imagine being in any other industry ever. I knew a guy that was a journalist like me, and he went to the hospitality industry because for like a couple extra thousand dollars a year, I’m like, what are you doing to yourself, man? This is the best business in the world. You get to interact with the best, smartest people. And I just hope more people want to go down this path of excitement because look at what you could become. Not me, an SVP, not some schnook doing a podcast. So for Glen and Sarah, thanks so much for being here. Please like share this video. Love you guys and we’ll see you next time right back here on No Vacancy.