In a decisive move, MGM Resorts (NYSE:MGM) International reached a tentative agreement with the Culinary Union, representing approximately 25,400 employees across its eight Las Vegas properties. This agreement comes as a significant relief just as a strike loomed over the renowned Las Vegas Strip.
Ted Pappageorge, the Culinary Union's secretary-treasurer, praised the tentative five-year contract as their "best financial package ever." MGM Resorts confirmed that the deal includes not only a pay raise for the workers but also commitments to reduce their workload.
The union's success with MGM follows closely on the heels of another triumph, having secured an agreement with Caesars (NASDAQ:CZR) Entertainment for its nine Las Vegas properties. With these two major deals, the union has effectively neutralized the threat of a widespread strike that could have significantly impacted the city's bustling tourism and gaming industry.
Negotiations with Wynn Resorts (NASDAQ:WYNN) are ongoing, as they seek to finalize agreements across the sector. The urgency of these negotiations was underscored by the looming strike deadline set only last week. In anticipation of wage increases, MGM began preparing financially as early as June this year, leading to what is now considered the largest pay increase in their negotiation history with the union.
The Culinary Union had initially authorized a strike back in August after workers voted in favor of taking action if necessary.
InvestingPro Insights
In light of the recent developments, let's delve into some key insights from InvestingPro. MGM Resorts has been actively buying back shares, signaling confidence in its own stock. This, coupled with the fact that strong earnings should allow the company to continue dividend payments, offers a promising outlook for investors. However, it's worth noting that the company's revenue growth has been slowing down recently, according to InvestingPro Tips.
Turning to the real-time data, as of Q3 2023, MGM Resorts has a market capitalization of $13.12 billion and a P/E ratio of 39.68. The company also reported a revenue growth of 22.17% in the last twelve months leading up to Q3 2023. This is particularly interesting considering the recent labor negotiations and their potential impact on the company's financials.
In conclusion, MGM Resorts' recent labor agreement coupled with its financial performance and InvestingPro's insights paint a nuanced picture for investors. As always, potential investors are encouraged to explore more in-depth analysis and tips on InvestingPro's platform, which offers a wealth of additional insights.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.