MGM China Paying MGM Resorts up to $173M for Trademarks
Posted on: December 9, 2022, 05:07h.
Last updated on: December 9, 2022, 05:36h.
MGM China announced it will pay as much as $173.2 million over three years commencing Jan. 1, 2023 to MGM Resorts International for use of the US-based company’s trademarks.
MGM China, which operates two integrated resorts in Macau, said in a regulatory document it has approval to use marks including MGM, MGM Grand, MGM Grand Macau, as well as the iconic MGM lion. The agreement also includes other “MGM-related service marks, trademarks, registrations and domain names” owned by the Las Vegas-based casino operator.
In addition to any expansion of MGM Macau and MGM Cotai, any future resort and casino projects or sites that the group may develop … will use the MGM brand,” according to MGM China’s regulatory filing.
MGM, which is the largest operator on the Las Vegas Strip, owns nearly 56% of the Macau unit. While MGM’s US operations are thriving, the company is taking a wait-and-see approach to large-scale investments at its two Macau venues.
Trademark Agreements Common Among Macau Operators
Of the six Macau concessionaires, three are tied to US-based parents — MGM China, Sands China, and Wynn Macau. Trademark pacts are common among those entities.
For example, MGM China announced in June that it struck a deal with MGM to continue using one of the gaming industry’s most recognizable brands. Earlier this week, Sands China said it will pay Las Vegas Sands as much as $377 million over three years to continue using Sands-related trademarks in Macau.
MGM China also revealed that it will pay as much as $46.4 million in 2023 to related parties for branding services, hotel cleaning, and laundry services.
Over the next three years starting in 2023, MGM China will pay $15 million annually to MGM Branding — a wholly owned subsidiary equally controlled by MGM Resorts and Pansy Ho. Ho is the cochairperson at MGM China, and recently signed a 10-year contract valued at $8 million annually to remain a managing director of the gaming entity. She’s occupied that role since 2005.
MGM China Marketing Agreement
The regulatory filing also highlights a revamped marketing agreement between MGM China and its US parent. Under the terms of that accord, the Macau entity will pay $8.34 million to MGM in 2023 for marketing services. That figure increases to $9.63 million in 2024 and $10.91 million in 2025.
Last month, MGM made a subordinated revolving credit facility of up to $750 million available to MGM China to financially support the business. Sands China and Wynn Macau made similar moves this year.
MGM China operates MGM Cotai and MGM Macau.
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Source: casino.org
