Trash-Talk

Harsh talk about business rivals has gone out of style.

Competitive zeal may also be lower these days because little data is hidden from rivals, Hart notes, at least in the businesses he knows best: hotels and gaming. “There’s so much information available in both industries, in terms of monthly data, and certainly a lot of regulatory pressure has purified the numbers across all accounting and reporting disciplines. So there’s not much spinning you really can do” in talking about competitors, Hart says. “There’s very little room for surprise.”

Glenn Schaeffer, president, CFO, and treasurer of hotel-casino operator Mandalay Resort Group, agrees with Hart about the unpleasant rebound from knocking competitors. “We’re all domiciled in the same town; the major operators are all in Las Vegas,” he notes. “When demand is on the upswing, you pay attention to what the other guy says. We’re really describing the same environment.”

Still, “we do differ in pricing, property to property, and it’s very competitive and always will be,” says Schaeffer, whose company operates Mandalay Bay, Luxor, Circus Circus, and other casinos. When he’s asked to discuss chief rivals like MGM Mirage and Park Place Entertainment Inc., he’ll address their differing strategies, but little else. “I don’t make publicly challenging comments about our competition,” he says. And there’s another reason not to get too nasty with rivals, he adds: today’s competitor might be tomorrow’s partner. Mandalay, for example, is a part owner with MGM Mirage of the Monte Carlo casino.

Congratulations, Lowe’s

Things weren’t always so nice in Las Vegas, of course. Mandalay’s predecessor, Circus Circus Enterprises Inc., was bad-mouthed by rivals in the 1980s for being tacky, and for concentrating on family business rather than the industry’s main target, high-rollers. “We lived to tell about it,” Schaeffer says with a laugh, noting that family business is currently a staple of many hotel-casino operators in town, and that his own company now has upscale clientele to worry about. Indeed, he claims, “as Mandalay Resort Group, we’re more sensitive than any other company to rising room rates.”

While industry numbers may be more available in the hotel and gaming industries, Home Depot still tries to protect proprietary numbers — such as the results for individual product lines — from prying rival eyes, says CFO Tomé. And that helps its competitive juices flow, especially when another company’s strategies seem to be modeled on its own. Indeed, Tomé’s remarks about Lowe’s did have the kind of real purpose that Stanford’s Neale describes: to explain to the audience of finance executives why Home Depot is no longer making quarterly forecasts, which might be of more value to rivals than they would be to investors. (Not that investors have had a lot to cheer about lately: Home Depot was the Dow’s worst-performing stock in 2002.)

Tomé doesn’t like being critical, she says. “I think all companies should spend their time talking about their company, not the competition. That is certainly our approach.” She concedes that she is quite open in commenting on competitors to investors and analysts. But, she adds, “I’m quick to compliment Lowe’s, because they had a great year in 2002.”

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