Early in his career, Lanni worked for Gerald Ford’s campaign. He forged close ties with Ronald and Nancy Reagan—a happenstance that would put him at Reagan’s funeral many years later during a crucial Vegas moment. Lanni also once worked for the conglomerate Republic Corporation. One of his responsibilities as Republic’s chief financial officer was to attend the annual Canton (China) trade show, buying home-improvement products to sell in the United States. After joining Caesars in 1977, Lanni found that his social mobility was limited. He was no longer eligible for membership at certain clubs, such as the Los Angeles Country Club, where the casino business was considered less nice than Hollywood.
But Lanni did find that his contacts from the Canton trade show were an invaluable source of customers for Caesars. The Chinese, for reasons no one is able to fully explain, have a cultural penchant for gambling—and they are, as a whole, the world’s most avid gamblers. Lanni began bringing his Chinese contacts to Las Vegas. These powerful customers, along with his organizational and financial acumen, made Lanni a very valuable casino asset.
In October 1999—in the midst of Wynn’s turmoil—Lanni announced he was resigning as MGM Grand’s chairman and chief executive to spend more time with his family in Pasadena. He said he also wanted to get involved with the Internet revolution, perhaps head an online gambling company. People close to the executives said that Lanni was sick of both the weekly commute from Los Angeles and his ongoing rivalry with Yemenidjian.
Two months later, Lanni changed his mind and agreed to stay on as chairman. His decision coincided with Yemenidjian’s resignation as president of MGM Grand. Yemenidjian said he needed to focus full-time on the movie studio.
As Lanni was resigning, Wynn was managing to further humiliate Goldman Sachs, which had been unable to unload many of the 16.6 million shares they had bought that spring. Wynn agreed to buy back at $15 about a third of the shares he’d sold to Goldman for $25.
Goldman lost more than $24 million that day—and possibly another $25 million on the other ten million shares the bank had bought, says one of Goldman’s bankers who had worked on the deal. “The goal was we’d sell it to the marketplace at a higher price,” the banker says. “We lost a pretty good deal of money on that shortly after we bought it.”
With Dan Lee gone, the former poker player Bobby Baldwin displayed an almost comical lack of understanding of Wall Street—or even in fulfilling the role of CFO. During an interview on October 21, Baldwin confided “being a CFO takes about one and a half hours” out of his day. The rest, he said, he spent running Bellagio.
So Wynn was left to handle Mirage’s banking business himself. When he called on bankers, the reception was frigid. One senior banker, the Goldman Sachs deal still in his mind, said, “He wanted me to jump. And I thought, you know, the last time I didn’t jump for him, it saved me a hundred and forty-two million. Morgan [Stanley] won’t talk to him. Goldman won’t talk to him.”
About a month after Lee’s departure, Wynn appeared to realize he needed to cater to analysts. He agreed to again provide financial information on the company’s individual casinos. Then he banned small investors from participating in the quarterly earnings conference call. This move would a few years later become illegal under the federal Regulation Full Disclosure law, because it gave large investors and analysts a considerable advantage in trading on any news revealed during the call.
The secrecy, piled on top of the other credibility issues, further convinced Wall Street that Mirage Resorts was spinning out of control. Wynn cemented this belief by participating in the company’s earnings conference call one day. He was grumpy, short-tempered. In no mood to be questioned, he misbehaved. When Deutsche Bank analyst Robin Farley asked for an explanation in the “shortfall” in earnings compared with expectations, Wynn responded testily, “What shortfall are you talking about, honey?”
Then Baldwin iced the whole cake when an analyst pressed for an indication of Mirage Resorts’ business strength in the fourth quarter. “I would ignore the fourth quarter,” Baldwin blithely suggested. “Too difficult to forecast.” It was tantamount to telling a blackjack player to ignore the dealer’s hand.
Mirage shares traded down 8 percent in a steep slide after that day’s call.
Wynn complained to the analysts’ bosses about the barrage of tormenting criticism. One of these bosses was Ace Greenberg, the legendary chief executive of Bear Stearns, where analyst Jason Ader had been harshly critical of Wynn’s management and behavior. Greenberg didn’t tell Ader to shut up, but he cautioned him, according to Ader.
“Hope you’re right, kiddo,” Greenberg said.
Chapter Fifteen
MISS SPECTACULAR
Here’s a guy who is an artist. It’s like Mozart [sic] composing, who can’t hear. Everything he does is visual—and he can’t see!… How can he relate to these guys who care about whether he earns a penny or two?
—RON BARON, MIRAGE INVESTOR
“I had a wonderful day yesterday,” Steve Wynn said, sounding pleased and a little giddy—the way he behaves when he’s feeling creatively satisfied. “Elaine and Sandy and Eydie Gormé and I were dancing around.”
He burst into a snippet of song.
“Sandy” was Sandy Gallin, a Los Angeles talent manager often mentioned in the press as a member of the so-called Velvet Mafia. This was a group of friends, some gay (but not all), who hold sway in Hollywood. Other supposed members of the Velvet Mafia are David Geffen, the music producer, and Barry Diller, the media mogul.
“That whole gang of the gay guys—they always stick together, really, really, really,” Wynn said. “And they’re all wonderful.”
Barry Diller, who is married to the designer Diane von Furstenberg, put Wynn together with Gallin after Wynn insisted he wanted to “redefine the entertainment industry” in Las Vegas. “There’s nothing they do in New York that we can’t do just as well here,” Wynn said.
Wynn was aware that he had changed the quality of entertainment in Las Vegas, with Cirque du Soleil.
Wynn was bent on bringing something even newer to the entertainment scene, and of course, he looked to his own interests for inspiration. He wanted to produce live theater. He would create a stable of his own Broadway-style productions for Mirage casinos in Las Vegas, Mississippi, and, soon, Atlantic City—maybe even take his shows on the road. He talked about establishing a movie and television company. He formed a new subsidiary, Mirage Entertainment & Sports Inc.
In June, he hired Sandy Gallin to run this new subsidiary. Gallin was once Dolly Parton’s manager, and he helped put the Beatles on The Ed Sullivan Show in the 1960s. He has had an encyclopedia of famous clients, many of them aging. Among them were Richard Pryor, Michael Jackson, Neil Diamond, Cher, Barbra Streisand, and Mariah Carey. He has produced television shows, including Buffy the Vampire Slayer, and a couple dozen movies. He has won an Academy Award, two Grammys, and four Cable ACE Awards. The Hollywood Reporter called him one of Tinsel Town’s top powerbrokers.
Gallin looks weirdly like Steve Wynn. It’s something about the dyed-black hair, the strange cosmetic tautness, the visible hunger for attention. Wynn was so enthusiastic about Gallin that he agreed to pay his new entertainment guru more than he paid his right hand, Bobby Baldwin. Gallin ditched everything he’d built in Hollywood for a seven-year contract at Mirage Resorts worth $2.5 million a year in salary and bonus. Gallin promised to relocate to Las Vegas from Los Angeles; he turned his embattled talent agency, Gallin-Morey Associates, over to his partner Jim Morey; and he folded the production company, Sandollar Productions, that he ran with Dolly Parton.
Las Vegas entertainment in the late 1990s was like a New Orleans funeral—diverting, but sad nonetheless. The place was a pasture for has-been entertainers. Tony Orlando, Three Dog Night, and scores of former stars eked out the last days of their careers in the city’s theaters and lounges. David Cassidy had a long run at the MGM Grand—a job that would later be taken by Rick Springfield, another fo
rmer teen wonder. Andrew Lloyd Webber’s musical Starlight Express had just died an ugly death at the Las Vegas Hilton.
There were entertainers, such as the impressionist Danny Gans and the magician Lance Burton, who made excellent livings performing full-time in Las Vegas, and there were a multitude of salty comedy troupes and celebrity imitators. There were even a few long-lived remains from Las Vegas’s glory years, like the Folies Bergere floor show at the Tropicana. Mirage Resorts had the best shows in town: Cirque du Soleil at Treasure Island and Siegfried & Roy at the Mirage.
Gallin did not make himself popular among his new colleagues. He was widely thought to be “an absolute idiot” who said little during key meetings and neglected important details, says Dan Lee, who sat through many of them.
For a part of Bellagio’s opening festivities, at Gallin’s direction, Mirage Resorts hired a philharmonic orchestra and arrayed them behind the fountains to accompany the dancing waters. It turned out that the sound wouldn’t carry over the noise of the splashing. The musicians were told to do the orchestral equivalent of a lip-synch, Lee says.
So perhaps it shouldn’t have been surprising that a year later, Mirage Resorts didn’t have a lot to show for Gallin’s costly presence. He still hadn’t made the move to Las Vegas, and there was no stable of theatrical shows or television and movie deals in the works. There was one musical, and Wynn had cut a deal to bring the impersonator Danny Gans to the Mirage from the Rio.
One evening in late September 1999 Gallin joined the Wynns for dinner in Las Vegas. There, Wynn accepted Gallin’s resignation—just three weeks after he had fired Dan Lee. “I’ll just say you didn’t want to spend that much time in Las Vegas and you’ll stay with Mirage Resorts in a consulting, advisory capacity and you’re still part of the Mirage Resorts family. And that’s all true, isn’t it?” Wynn said, according to Gallin.
It’s a sign that Wynn was trying to clean up his company, but it looked like another failure at the time, exaggerated by Lee’s disappearance and that of another Mirage Resorts stalwart—advertising head John Schadler, whose sudden departure was startlingly similar to Lee’s.
At first, Gallin and Wynn kept up the pretense that it was a friendly parting from a successful relationship. “It really was a reevaluation of my life,” Gallin said a day later. “All my friends and family are in New York and L.A. Steve wanted me to be by his side to do all the entertainment and to help him with the advertising and the public relations, and I just couldn’t make that commitment. I thought, ‘I don’t need the money. And I should really be in a place where I’m really happy.’”
“I lost Sandy Gallin. It’s murder,” Wynn said the day of Gallin’s departure. “Elaine and I are so depressed.”
But Wynn seemed to recover from his depression with alacrity. “I need somebody different than him, actually,” Wynn continued cheerily. “I need a really serious production manager. A schedules guy. A shopping guy. Or a girl, for that matter. I don’t need a deal maker. I’ve met everybody in show business now.”
He wanted to pay “much less money” and find someone willing to live in Las Vegas. “We gotta find a guy,” he continued. “Or a girl. It might be a woman. You never know—they’re just as good.”
The most important thing to come of Gallin’s short tenure was Wynn’s introduction to Jerry Herman, the composer of the musical that Mirage Resorts had in the works.
When you think of Herman, you think “Hellooo, Dolly.” He composed the music and lyrics for Hello, Dolly!; Mame; and La Cage aux Folles. He has won Grammy and Tony Awards.
Wynn hired him to create an original Broadway-style production for the Mirage: Miss Spectacular. They hoped it would open in 2001, around the same time that Siegfried & Roy’s long contract was due to run out. “Steve called me,” Herman said. “He said, ‘I have the most beautiful hotel in Las Vegas. I have the best restaurants. I have my own art collection, and I have Cirque du Soleil. But the only thing I don’t have is a Jerry Herman musical.’ And I said, well, anyone who talks to me like that can have anything they want.”
Miss Spectacular is an old-fashioned musical. It is a love story about a simple girl named Sarah Jane Hotchkiss from South Bend, Indiana, who wants to be a star. Her family and friends tell her to forget it, but she enters a contest to be a spokeswoman for the Hotel Spectacular in Las Vegas. Her daydreams become the show’s musical numbers, two of which are cued by the sound of wins on slot machines.
In the finale, Sarah Jane chooses her boyfriend, Charlie, over Las Vegas, and they head for the hotel’s wedding chapel. She pulls the lever of a slot machine and coins jingle, turning her wedding into a glitzy spectacle. It was big, it was optimistic, and it was a fairy tale. Steve Wynn fell in love with it.
Herman believed the role of Sarah Jane was grand enough for a superstar. But in the same way that Wynn liked to own all his restaurants and shops, Wynn wanted to create his own superstar by hiring an ingénue.
Before casting it, they decided to record a concept album with the music Herman had composed, performed by a collection of stars. They included Steve Lawrence, Christine Baranski, Michael Feinstein, and Faith Prince.
On the first Friday of October, the Wynns and their daughter Kevyn met Jerry Herman at the vine-covered O’Henry Sound Studios in Burbank, California. A full orchestra was working on the score in the big room, conducted by Don Pippin, another Tony Award winner. Larry Blank, another big name on Broadway, was responsible for the orchestrations and arrangements.
Herman sparkled with joy. He is a tiny, slightly built, gentle man. He looks frail and a bit bent—as though the upper half of his body is perpetually seated at a piano. Born in 1933, he is a man of his generation. “My boy makes me cookies,” he said of a valet. Herman’s reddish hair was carefully groomed and that day, he wore a black shirt with a gray belt.
Herman’s somber presentation contrasted with that of Wynn, who wore a yellow silk shirt with short sleeves and a Chinese collar over black pants and a pair of black suede shoes.
Wynn pointed to Baranski, who was recording in a small studio room. “She sings in that room alone,” Wynn stage-whispered. “And then later we can add twenty people singing. Is this fun or what?”
As Baranski belted out Herman’s lyrics to “I Wanna Live Each Night,” Wynn and Herman told the story of Miss Spectacular. They were giggly. “There’s a little wink-wink irony,” Wynn said. “It’s meant to let people escape for the ninety minutes they’re in the theater. We want people to laugh. We want people to get a little catch in their throats. And we want them to walk out humming.”
“I have never had so much fun in my life,” Herman said adoringly. “I love this man. Because we have the same sensibilities. We never grew up.”
Wynn interrupted his composer. Baranski hadn’t nailed it, in his opinion. “Jerry, Jerry,” Wynn said, “when she sang that line about the crisis, she sang it, but she didn’t interpret it. It’s about sex. She’s gotta chew on it.”
Wynn almost did West Side Story at the Mirage. Then he decided he needed an original show that he could own and use as he deemed fit. Wynn and Herman were slipping marketing messages into the lyrics of Miss Spectacular.
“Here comes a little pitch,” Wynn whispered as Baranski continued and one pitch for his casinos followed another:
“Come see a fabulous art collection.…”
In another song, Baranski sang a line of Herman’s that referred to the jeweler Cartier.
“They tell me I look smashing. My Cartier necklace is free.”
Wynn pointed out that Bellagio had a Tiffany store, but no Cartier. Herman asked the singer to come back and sing “Tiffany” into the mike, so they could mix it in later.
“‘Cartier’ sings better to me,” Herman interjected. They discussed it and agreed that if Herman didn’t like “Tiffany,” he could restore “Cartier.”
“It was a cute thing,” Wynn said with a shrug. “The payoff for all of this, besides the fun, is its entertainment.”
/>
He then turned to singer-actress Faith Prince, who was also there to record a song. “This is the most fun I’ve had in twenty-six and a half years on the job,” Wynn said with a grin.
“Honey,” replied Prince, tapping her chest. “You and me both.”
“This is like spittin’ and hittin’ the floor,” Wynn continued. “That’s how easy this show’s gonna be in Las Vegas.”
Prince, a handsome actress in her early forties, confided that she was dying to play the lead in Miss Spectacular, even though it would mean living in Las Vegas. “I’m a New York girl,” she said wistfully. “I should have been born thirty years earlier. No one is creating this stuff.”
Later, Wynn whispered out of her earshot. Prince had no chance, he said. “Too old.”
Wynn and Herman went into the studio with Pippin and the fifty-four-piece orchestra and Wynn donned a headset and sat on a tall stool. Outside in the control room, a crew of sixteen munched on bagels, cheese, and fruit and drank coffee.
The orchestra worked through Miss Spectacular’s overture. Herman got tears in his eyes. When the orchestra launched into a love song, Herman and Wynn sat side by side holding hands. Herman’s eyes were closed. “This song is perfect,” Wynn said, and Herman echoed, “It’s perfect.”
Wynn said he wanted to understand the music, so he got a lesson from the master. Pippin explained, “There are thirty-four lines, one bar for each line.…”
In the middle of recording the finale, Wynn’s cell phone rang discordantly. The orchestra waited while Wynn chatted, showing no sign of embarrassment. When the call was over, Pippin raised his arms and called out, “One more time, without the cell phone.”
“Stevie finally has his own musical,” Elaine Wynn said, giving her husband a hug. “I think this is worth half a cent on the share.”
Winner Takes All Page 15