When casino wheeler-dealer Steve Wynn finally folded his cards last Monday and agreed to sell Mirage Resorts to MGM Grand, it obviously marked the end of an era in Las Vegas. In another sense, though, the deal seemed to come to us from an era that was not ending so much as long since over. It was the ghost of the 1980s, the ghost of a time when moguls actually seemed to matter, that floated through the business pages as Wynn and Kirk Kerkorian, MGM Grand’s chairman, wrestled over these casinos.
In concrete terms, after all, Mirage was essentially an instrument of its CEO. Although Wynn owns only 11 percent of Mirage, he controls the board of directors (upon which sits, among other insiders, his wife), and there was no real chance that Mirage would be sold unless Wynn consented. Because gambling is a regulated industry, which means that any deal would have to be approved by state gambling commissions, a hostile takeover was never really an option for MGM Grand, which further insulated Wynn from challenge. And so, even though MGM’s initial bid represented about a 50 percent premium to Mirage’s stock price, when the deal closed MGM ended up paying a premium of almost 100 percent. In essence, it bought Wynn off and out.
At the same time, Mirage’s entire strategy has always appeared to be little more than whatever Wynn happened to believe was the right thing to do at the time. Spending $2 billion to build the art-ridden Bellagio, expanding into already-crowded markets, always emphasizing the huge rewards that lay just over the horizon, Wynn was the embodiment of what you might call the great-man theory of capitalism. Trust in his visionary instincts, and you’d end up OK. Of course, for people who bought stock in Mirage in the last five years, it didn’t really turn out that way. But I guess the ride was fun. Certainly there was a lot of press. Certainly Steve Wynn was very well known.
In one sense, this is undoubtedly because of the industry Wynn helped shape. Gambling’s jazzy. It’s got all the ingredients of a good story. It’s nice to be able to write about Bugsy Siegel. And Las Vegas is interesting because it’s a place almost completely defined and created by gambling, which makes it an excellent case study. For all that, though, it’s also true that Wynn’s notoriety was symptomatic of the 1980s understanding of business, which tended to see everything through the prism of the heroic, or evil, individual. If you wanted to know where the gambling industry was going, you needed to know about Steve Wynn, and you needed to know not just what he thought about gambling, but also what he wore, where he lived, and what inner demons drove him to achieve so ferociously.
The great-man theory was not, in fact, a really useful way to think about what happened to business in the 1980s (with the notable exception of Michael Milken). In retrospect, most of the really important stuff that happened–downsizing, reengineering, the emergence of shareholder activism, freer access to capital–was not about individual action or leadership but about profound, systemwide, long-term changes. But it is true that the individual actors of the 1980s seem to have thought of themselves as great men, and to have believed–wrongly, for the most part, but sincerely–that their own lives were the most important things happening in the decade. And that made them, from one angle at least, entertaining.
But this idea that business is best understood by studying personalities seems utterly anachronistic today, despite the best efforts of journalists and, in some cases, the personalities themselves. To be sure, the New Economy has its own could-be moguls, but the truth is that with the exception of Bill Gates and Steve Jobs, who are, after all, legacies of the pre-Internet era (albeit ones who have made successful transitions into a new generation), none of the New Economy titans actually seem–or, with rare exceptions, seem to want to be–all that titanic. To generalize wildly (that is, even more wildly than I have been up to this point), the people shaping the future of business today seem to grasp that in fact “shaping the future” is a misnomer, and that the best they can do is to try very hard to stay on top of the horse as it bucks in directions no one can really foresee.
I exaggerate, of course. But not, I think, by too much. At the core of the New Economy is the idea that, above all, it is ideas that drive business. And while you’ll certainly hear lots of talk about how important a management team is to a company–and it is–it’s also clearer than ever that no matter how good, how hard-driving, or how charismatic a management team you have, if your business strategy is behind the curve, you’re lost. Personalities don’t define businesses anymore. Business does.
It’s possible that this is not a good thing. Certainly any writer who’s tried to interrogate Jerry Yang or Jeff Bezos on their childhoods or love lives will come away frustrated. But I’m inclined to think that that’s a rather minor loss. Of course, some variant of the star system will always be with us, if only because magazine editors want faces to put on their covers. And, unfortunately, as the endless number of big mergers suggests, we’ll never be completely free of CEOs satisfying their egos by destroying shareholder value through pointless acquisitions. But even though stories of clashing moguls, and of heroic CEOs, will continue to be written, they won’t continue to matter. The King is dead. Long live the Idea.
After almost three years at Slate, this is my last column for “Moneybox,” which, starting on Monday, will be in the excellent hands of Rob Walker, an alum of the New York Times Magazine. Slate’s been the most interesting and entertaining writing experience I’ve ever had. Thanks, Mike and Jack, for creating this place and giving me a chance to write here. I’m going to miss it.
