WEB EXCLUSIVE: Doing Fine in Detroit
May 14, 2009
Randall Fine is
founder and managing director of the Fine Point Group, a gaming and hospitality
consulting firm based in Las Vegas.
His prior gaming experience includes executive roles at Harrah’s Entertainment,
where he served as vice president of Total Rewards and product marketing and as
vice president of slots and Total Rewards Operations, and with Carl Icahn’s
casino company, where he helped position those properties for sale at a $1
billion profit. Since founding the Fine Point Group in 2005, Fine has grown the
firm from a one-man shop to a 15-person team of senior-level consultants,
serving more than 100 properties around the world. Fine spoke with Casino
Journal Managing Editor Marian Green in late March, focusing on one of the
firm’s newest clients, Detroit’s
Greektown Casino, and efforts to reinvigorate the property following its May
2008 bankruptcy filing.
What projects are you working on right now? Obviously Greektown is a big one.
Fine: We serve clients that generate about $5 billion in gross gaming revenues, and we don’t typically share our client list, because when we help them we want them to be the ones that get the glory for the work that we do. Sometimes they tell people that we work with them, sometimes they don’t. Greektown, obviously, is public, given the bankrupt situation. But we work with one of the largest locals operators in Las Vegas. We work with the largest Native American gaming company. We work with the largest Pennsylvania gaming operator. We work with a number of the riverboat gaming companies. We work with Native American tribes on the West Coast. We’ve done work in Canada, in the Caribbean, Asia, Eastern Europe and Western Europe. So we’ve worked all over.
You’ve come a long way in a short time.
I think it was because there was a market need. I felt there would be a value to the industry of a group of folks who really were from the industry, not who consulted to the industry, not who just watched the industry, but people who actually worked in the industry who could leverage their expertise to help other companies improve their operations. Our executives have worked at Harrah’s, MGM Mirage, Station, Boyd, Isle of Capri, Colony Capital –so we all have the sense for what our clients’ challenges are because we’ve dealt with those challenges ourselves. That’s part of why we’ve grown. Folks know that when they hire us, they’re going to get results.
In the case of Greektown, that must have gone a long way.
Greektown approached us. They invited us to pitch. I think there were a lot of other groups that were interested in that project, but they chose us because they said they saw we had a proven track record of optimizing existing assets. There are a lot of folks in this business that if you want them to do anything, they hold out their hand for a check to build something. Their answer to everything is renovations and building and capital. And our answer is smart operations, smart marketing and leveraging what we have. We don’t sit around and complain about what we don’t have. We take what we have and make it work as best we can. And I think that was pretty resonant in the Greektown decision.
Talk about some of your initial steps to turn around Greektown. What did you do first?
We’ve been at Greektown for a little more than two months [at the time of this interview], and we’ve launched a top to bottom analysis of everything at the property. So we have retooled every aspect of their marketing program, from branding, to database, to players club to player development, events and promotions the entire thing soup to nuts. We’ve taken a look at the positioning of the property and staked out a position that we’re comfortable with. We’re telling customers we’re the place we’re going to provide the best value for their dollar. We feel that’s a position we can own in the market. From the operations side, we’re looking for every opportunity to cut costs intelligently without demonstrably hurting customer service, and sometimes improving it, and so there’s been a lot of opportunity to take expense out of the business.
What was the positioning of Greektown before? Where did they go wrong?
Well, they went wrong a little bit in trying to compete with the MGM Grands of the world on MGM Grand’s playing field. MGM Grand spent a billion dollars building an entirely new property. Greektown spent a few hundred million adding on to their existing temporary facility and said, “How can we be like MGM?” And that’s a losing proposition. We’ve said for the customers who want $15 hamburgers, MGM are the place for them to go. We don’t want to try to one-up them in the who-has-the-most–expensive-luxury-items fight. We want to focus on Middle America, average working folks who want to have a great time at a great price. So we have shifted the focus of the property away from competing for this ethereal luxury customer to the more value-oriented regular person.
How about working with the staff – how do you gain their trust or motivate them?
Well, we’ve motivated them in large part just by communicating with them. We’ve had meetings; we’ve had rallies with all the staff where they can see us, where they can talk to us, where they can ask us questions. We’ve let them know that if they reach out to us with questions and complaints, we’ll respond to their issues. We have given them a sense that we want to win, that we want this property to succeed, not fail. And we’ve started to have some wins, and it creates a self-supporting cycle where people start to get enthusiastic. We’re really happy with the way things are going.
Can you describe some of your successes to date?
We grew market share in February over January pretty dramatically [from 22.8 percent share to 23.5 percent], the only property in the market to do so. We’re hoping to do it again this month [March]. [Greektown did improve its market share, growing to 25 percent market share, 1.5 percent over February’s 23.5 percent market share. The casino continued to perform well in April, up another .7 percent] We are going to beat our EBITDA plan for the first quarter by 80 percent. You’d probably be hard-pressed to find a casino in the United States that’s going to beat their plan by 80 percent. And we’re giving people a vision of where we want this property to go. Enthusiasm is contagious, and when people see how enthusiastic we are and how excited we are about the potential of this property, it’s really impossible to not get on board that train. And to be honest, anybody who has been content with the performance of the past is being told that there won’t be a home for them at Greektown. We’re looking for people who want to win, who are willing to claw and scratch and do whatever they have to do to be successful.
What is the real potential of Greektown and why hasn’t it been realized?
I think that the property had a fair number of leadership challenges. It was managed by committee of folks who with house and hundreds of miles away. And you just can’t run a casino that way. You have to have people on site, enmeshed in the business, sweating the numbers 24 hours a day, seven days a week. I think that was a big part of it, and we’ve remedied that. We have a team on the ground there every day who is working the business all hours of the day and night to move the needle as quickly as we can.
What do you see as the potential in that market for a property like Greektown?
The property has recently been doing low 20s -- 21, 22, 23 -- percent market share, and we want to get that number up toward 30 percent. We think that’s doable, profitably by the way.
Are you seeing customers not venturing over to Caesars Windsor as much?
That’s been the case for a long time. We plan to be very focused on letting customers know that when they take their business to Canada, when they go across the border, they’re not creating jobs in the United States, they’re not creating jobs in Michigan, they’re not creating jobs in Detroit, they’re not creating taxes for the state of Michigan and the city of Detroit. And these are things that that state and that community really could use. We clearly intend to be making that message loud and clear on how we can keep those dollars here where we can benefit our own.
We’re in such a severely challenged market and Detroit probably more so than a lot of places. So what’s the potential for growing market share when people don’t have jobs and the auto industry is turmoil?
Detroit has been a recession for 10 years, so the rest of us are learning to live in a recession not the other way around. Things don’t really seem to be that much different in Detroit than they have been. Even though the market has been in effect a recession for 10 years, gaming has continued to grow, and it’s pretty stable. We can grow market share because that’s just our slice of the pie. In terms of how big the pie is, we just have to focus on [the fact that] people still are going to want entertainment. They need an escape from all of the stress, and we want to say to folks that when you take that 20 dollars or 30 dollars or 50 dollars and go out to have a good time, we’re going to give you more entertainment value for that dollar than anybody else. That’s what our focus is all about.
So that value proposition resonates right now?
I think the value proposition is custom-made for these economic times. I think the industry got convinced that there was this limited supply of people who wanted to pay $15 for a hamburger, $150 for a spa treatment, $1,500 for a bottle of booze and a million and a half dollars for a condominium. And I don’t know where they thought these people were going to come from. We never believed in it; it doesn’t exist. People are looking for value, and the operators who are going to win are those who are going to provide people with a great time for their money.
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