In Hong Kong, we build a global business empire

In the blink of an eye, Lin Haoran had been in Las Vegas for five days.

Over the course of those five days, he gradually learned about many operational details of the MGM Grand Hotel, from room occupancy rates to casino revenue, from catering revenue to show ticket sales. Every number formed an increasingly clear picture in his mind.

During these five days, Kirk Kocorian also kept his promise, taking Lin Haoran on a tour of the hotel and introducing him to the heads of various departments one by one.

When these MGM Grand executives learned that the company was about to change hands, and that the new owner was none other than the famous Chinese-American tycoon, Lin Haoran, their expressions were as colorful as if a palette had been overturned.

There was surprise, unease, doubt, and an undisguised excitement.

After all, Lin Haoran's name has frequently appeared in the Wall Street Journal and Time magazine over the past year.

A young Chinese-American, not yet thirty, started from scratch and amassed assets worth over ten billion US dollars, sweeping from Hong Kong to Tokyo and then to New York.

Such a resume would be remarkable in any industry, let alone in the relatively closed environment of Las Vegas.

The hotel's general manager, Frank McCarthy, is an Irish-American in his fifties who has worked in the hotel industry for thirty years. He exudes a shrewd and capable air about him.

Standing on the second floor of the hotel, he pointed to the guests coming and going in the lobby downstairs and said to Lin Haoran in an almost proud tone: "Mr. Lin, the MGM Grand Hotel has maintained an occupancy rate of over 85% all year round, and it is even more difficult to find a room on weekends and holidays."

The casino's net monthly revenue exceeds $20 million, with food and entertainment combined generating nearly $10 million, making it the most profitable hotel in Las Vegas, bar none.

Lin Haoran listened to these numbers without changing his expression, but he had already begun to make calculations in his mind.

With annual revenue approaching $400 million and a net profit margin exceeding 30%, the company earns over $100 million in profit annually.

With such a cash cow, it's no wonder Kirk Kocorian said it would be quite difficult to get institutional investors to recognize their holdings.

However, in practice, it is not as difficult as imagined.

The reason is simple: Kirk Koccorian is the cornerstone of MGM Grand. Now that he has given up such a cash cow, can MGM Grand still be as profitable as it is now?

Those institutional investors were unsure.

The reason they clung to their shares so tightly was not so much because MGM Resorts itself was so excellent, but because they trusted Kirk Koccorian.

Although this old man was a complete mess in running a film company, he was quite adept at running hotels and casinos.

Over the past decade or so, MGM Grand Hotel's profits and dividends have increased year after year, and this stable return has given investors great confidence.

Even after a major fire in 1980, the MGM Grand Hotel quickly recovered.

The biggest contributor to all of this is undoubtedly Kirk Koccorian, the founder of MGM Grand.

In Las Vegas, Kirk Kocorian's name is a golden brand.

Investors trust him not because he is a saint, but because he is shrewd, decisive, and skillful.

He knows when to advance, when to retreat, when to place a heavy bet, and when to cut his losses in time.

But now, this prestigious reputation is about to be taken down.

The new boss is a Chinese man in his late twenties who made his fortune in Hong Kong in real estate and finance. Although he also owns a strong hotel business, he has never ventured into the casino industry.

While both the hotel and casino businesses are core operations for MGM Grand, the casino is the true "profit engine" in terms of revenue structure.

The combined profits from hotel rooms, catering, and entertainment performances are less than half that of the casino.

Las Vegas is essentially a gambling city. Beneath all the glamorous surface, the core logic of its operation boils down to just two words: gambling.

Tourists can come to Las Vegas and not stay in the best hotels, eat at the most expensive restaurants, or see the most top-notch shows, but as long as they walk into any casino in the city, the casino can take money out of their pockets.

This is the essence of business in Las Vegas.

Can Lin Haoran, an outsider who has never been involved in the casino industry, really run such a sophisticated "profit machine" well?

Those institutional investors had no answer.

All they knew was that Kirk Koccorian had been in the casino industry for decades, from Las Vegas to Reno, from casinos to hotels, taking each step steadily, accurately, and ruthlessly.

He understands gamblers' psychology, casino operations, how to deal with the Nevada Gambling Regulatory Commission, and how to handle difficult union leaders.

But what about Lin Haoran?
A Chinese man under the age of thirty started his business in Hong Kong real estate. Although he also made some impressive moves on Wall Street, he even gained fame for correctly predicting the decline of the US stock market.

But those are all financial investments, which are completely different from physical businesses like casinos that rely heavily on offline operations and interpersonal relationships.

Making money on Wall Street relies on information, calculation, and courage.

You spot an opportunity, place a heavy bet, wait for the right moment, and then cash out and leave.

Throughout the process, your opponents are the invisible and intangible market, the numbers on the candlestick chart, and the greed and fear of other investors.

But running a casino is different.

Casinos are physical businesses; they are businesses that open their doors to customers every day.

You'll be dealing with real, living, and all sorts of people: those who are ecstatic after winning money, those who are furious after losing money, those who cause trouble while drunk, those who get caught cheating, and those down-on-their-luck gamblers in suits who look respectable but actually only have a few dollars left in their pockets.

Each of these people is a complex book in itself.

If you understand it, the casino makes money; if you don't, the casino loses money.

Not to mention those troublesome guys from the Nevada Gambling Control Board.

They hold the power of life and death over casinos; any violation could lead to the revocation of licenses and the instant loss of hundreds of millions of dollars in investment.

Although Lin Haoran has assets exceeding 10 billion US dollars and has proven his abilities in Hong Kong, Tokyo, Southeast Asia, London, and New York, he is a complete novice in the casino industry.

These questions were on the minds of institutional investors and the management of MGM Grand Hotel, but no one dared to voice them openly.

This uncertainty is Lin Haoran's most advantageous bargaining chip.

For this reason, in the past five days, some holding institutions have taken the initiative to convey their intention to sell their shares through Kirk Koccrian, the intermediary.

These institutional investors know that rather than betting on a new owner with an uncertain future, it's better to exit now while the price is still significantly higher than the market price.

After all, the first principle of investing is not how much you make, but that you don't lose money.

When Kirk Koccorian was around, the MGM Grand was a perfectly functioning money-printing machine.
With Kirk Koccorian gone, no one can guarantee whether this money-printing machine can continue printing money.

Rather than bearing this uncertainty, it's better to secure the profits.

Things are going very smoothly.

In addition, Lin Haoran's $6.5 million in cash is already in a Citibank escrow account, waiting for the completion of the transfer of Kecorian's shares before it will be transferred to the old man's account.

Today is February 10st.

John Reed returned to New York the day after the deal was finalized. After all, as the future leader of Citigroup, the current chairman Walter Riston had gradually reduced his daily management work and handed over more and more power and responsibility to John Reed.

As the future leader of Citigroup, Reed cannot stay in Las Vegas for long; there are still a lot of things waiting for him to handle in New York.

However, before leaving, John Reed specifically left a team behind to help Lin Haoran.

The team, led by Michael Brown, Senior Vice President of Mergers and Acquisitions at Citibank, consisted of six people, including legal, financial, and negotiation experts, and was specifically tasked with assisting Lin Haoran in the privatization acquisition of MGM Resorts International and its film division.

Therefore, even though Lin Haoran is alone in Las Vegas without any capable assistants, he doesn't need to worry about a shortage of manpower. Lin Haoran's current task is simple: familiarize himself with all the senior executives of the MGM Grand Hotel and transfer money to Citibank's escrow account. Citibank will basically handle everything else for him.

For example, the privatization of the two MGM companies, the preparation of necessary legal documents, communication and coordination with various institutional investors, and the various disclosure documents submitted to the SEC, etc.

These tasks are tedious and specialized, and it's much more efficient to have them handled by the Citi team than to figure it out from scratch yourself.

He only needs to pay a service fee that is not much to him.

Lin Haoran has always believed in one principle: if time can be bought with money, he will never waste his energy.

The service fee from the Citibank team wasn't cheap, but compared to having him and a few temporarily transferred subordinates from Hong Kong struggling in the unfamiliar American market, the money was well spent.

Moreover, with a prestigious brand like Citibank backing it, institutional investors' trust will be greatly enhanced, and the resistance to privatization will be much smaller.

At this moment, Lin Haoran was sitting in the chairman's office of the MGM Grand Hotel, opposite Kirk Kerkorian and the hotel's general manager Frank McCarthy.

"Mr. Lin, the equity split has been completed. Approvals from the New York Stock Exchange, the Nevada Gambling Control Commission, the California Film and Television Commission, and other departments have all been granted. From today onwards, MGM Studios and MGM Grand Hotel are yours!"

Kirk Kocorian took out a folder and handed it to Lin Haoran with a smile.

Inside the folder, a thick stack of documents was neatly arranged: the equity transfer agreement, the board resolution, approval letters from various regulatory agencies, and a handover list of all legal documents of the two companies.

Every page of the document was covered with signatures and stamps, the evidence in black and white, irrefutable.

Kirk Kocorian has already come to terms with it these past few days.

Out with the old, in with the new. Although the MGM Grand Hotel will no longer belong to him and he has lost the MGM brand, he believes that with his influence and connections in Las Vegas, the casino hotel he builds in the future will not be worse than the MGM Grand Hotel, and may even be better!
He believes he can learn from the experience of the MGM Grand Hotel to create a more perfect entertainment empire that meets the needs of the new era.

Of course, these are things to follow.

The most important thing right now is to hand over the MGM brand completely to Lin Haoran, get that huge sum of $6.5 million in cash, and then exit gracefully.

Lin Haoran took the folder, feeling a mix of emotions.

With the assistance of Kirk Kerkorian and Citibank, everything went so smoothly that the government did not deliberately make things difficult for him.

This is unusual in commercial acquisitions, especially for a foreign acquisition involving a gaming business and owned by a person of Chinese descent.

It's important to know that the Nevada Gambling Regulatory Commission is known for its rigorous vetting process, conducting detailed, almost demanding, background checks on any potential casino owner.

Over the past decade or so, many foreign investors have attempted to enter the Las Vegas market, but all have ultimately failed because they could not pass the review of the Gambling Regulatory Commission.

Lin Haoran, a young Chinese man not yet thirty years old, actually obtained all the necessary approvals in just five days.

Kirk Kocorian's endorsement played a decisive role in this.

Kirk Kocorian has been operating in Las Vegas for over a decade and has dealt with every member of the regulatory board, his relationships as deep as the roots of an old tree.

He assured the committee that Lin Haoran had a clean background, legal funds, and good character, and promised that the Hong Kong-based Chinese tycoon would run the MGM Grand Hotel better than ever before.

He also stated that the main purpose of selling the MGM Grand Hotel was to raise funds to build a larger and more luxurious casino hotel, making Las Vegas even more prosperous.

With the guarantee from Kerkorian, the credit endorsement from Citibank, and Lin Haoran's own clean record—he had no criminal record in any country and all financial transactions had clear legal sources—the Control Committee ultimately approved the review unanimously.

The approval process with the California Film and Television Commission went even more smoothly.

Hollywood has always been open to foreign capital; as long as you have money and are willing to invest in movies, they welcome you.

Moreover, MGM Studios has been losing money year after year, becoming a laughing stock among the eight major Hollywood film studios. The old men on the committee are eager for someone to take over, so that this century-old company won't go bankrupt under their noses and lose face.

Therefore, when Lin Haoran's acquisition application was submitted to the committee, it was approved with almost no resistance.

Lin Haoran opened the folder and carefully looked at each document inside.

Kirk Kerkorian and the hotel's general manager, Frank McCarthy, remained silent and did not disturb him.

The office was so quiet that the only sound was the rustling of papers turning.

Lin Haoran flipped through the pages one by one, his gaze lingering on each key clause for a moment.

Although he had already learned about the core content of these documents in his previous communication with the Citi team, it still felt different to personally read through these official documents in black and white.

Each page represents the completion of a stage, and each signature signifies the passing of a level.

Five days ago, the deal was just finalized, and the equity transfer had not yet been officially completed.

From this day forward, MGM Studios and MGM Grand Hotel officially belong to him!
When Lin Haoran flipped through MGM's asset list, his finger lightly glided over the long list of movie titles.

The James Bond series, The Hobbit, Rocky, The Pink Panther, The Silence of the Lambs, Rain Man...

One after another, renowned names and priceless intellectual property are now quietly lying in this document, waiting for him to awaken them.

He then looked through the MGM Grand's asset list, which was equally comprehensive: the MGM Grand Las Vegas, the MGM Grand Reno, and most importantly, the casino operating license issued by the Nevada Gaming Control Commission.

This license is the most valuable asset of the MGM Grand Hotel.

Without it, the MGM Grand Hotel would just be an ordinary luxury hotel, with its annual profits shrinking by at least two-thirds.

Although gambling licenses are not uncommon in Nevada, with nearly 25 large casinos in Las Vegas alone, don't forget that Lin Haoran is not an American.

For a non-U.S. citizen to obtain approval for a Nevada gaming license in just five days is an extremely rare occurrence.

The Nevada Gambling Control Board has far stricter vetting standards for non-U.S. applicants than for U.S. citizens.

In addition to routine financial background checks, the legal environment of the applicant's home country, their network of relationships with the political and business circles in their home country, and even whether the source of funds involves sensitive regions are also examined.

Many foreign investors fail in Las Vegas not because they lack money, but because they get stuck at this hurdle.

Lin Haoran's smooth passage was due to two main factors: Kirk Kerkorian's guarantee and Citibank's credit endorsement played a decisive role, and his special status was also related to his background as a Hong Kong super-rich man with a British colonial background and close ties with both British political and business circles.

The long-standing information-sharing and law enforcement cooperation mechanisms between the UK and the US in the field of gambling regulation have greatly increased the Nevada Gambling Control Commission's trust in him.

But no matter what, getting the license is the most important thing.

Lin Haoran closed the folder and tapped the cover lightly with his fingers, producing a dull sound.

"Finished reading?" Kerkorian asked with a smile as he saw him close the folder.

Lin Haoran nodded, placed the folder on the table, and patted the cover: "I've finished reading it, Mr. Kerkorian. Thank you for your hard work these past few days."

Kerkorian waved his hand, picked up his coffee cup, and took another sip.

Then he smiled and said, "Now that all the shares are in your hands, we should hold a press conference to announce it to the public!"

Both MGM Studios and MGM Grand Hotel are publicly traded companies on the New York Stock Exchange, and such changes in shareholding must be disclosed to the public and investors in a timely manner according to regulations.

Therefore, press conferences are very necessary.

Lin Haoran nodded in agreement: "A press conference is indeed necessary, Mr. Kerkorian. When do you think would be a suitable time?"

Kerkorian put down his coffee cup, thought for a moment, and said, "Tomorrow morning at ten o'clock, in the Lion Room of the MGM Grand Hotel, I will inform all my media contacts in Las Vegas and Los Angeles to ensure that all the major financial media outlets in the United States will be there tomorrow." (End of Chapter)