The Las Vegas news from first week of 2007 is a mixed bag of stuff. Some of it will probably have an affect on the Las Vegas poker scene because I’m talking about the World Series of Poker and its’ future under the new owners of Harrah’s. This first week of 2007 Harrah’s announced the departure of three key executives from the company.
They are very high level executives with golden parachutes that were negotiated in the buyout deal. The latest to go was #3 in the Harrah’s chain of command, Chief Operating Officer Tim Wilmott; but, don’t feel sorry for Tim. He’s leaving his $3 plus million job at Harrah’s with more that 135,000 shares of stock worth $90 each or a lump sum of cash worth more than $12 million. Last time you were layed off, fired, etc. how much money did you leave with?
An earlier posting about the new owners, Texas Pacific Group and Apollo Management, and the simple business methods they successfully employ to produce the high returns necessary to satisfy their investors. Strip the cash, start at the top and downsize through the ranks, sell off branded assets with lack luster performance and add up the daily appreciation of the premium real estate sitting under the mostly second tier properties; because that’s the ‘really big dollar’ return. The downsizing phase has begun and will continue until a minimum number work force is determined. Will the sell off of Harrah’s company brands be next? Maybe the next Harrah’s executives to head for the unemployment office will leave with the title to the WSOP.
In other Vegas casino news the Tropicana goes to Colombia Sussex. Hopefully the new owners will realize the once exotic resort was completely overshadowed with the opening of MGM Grand in 1973 has been losing ground ever since. The Tropicana definitely needs to be replaced to fit and compete with its’ center strip neighbors. The $2.75 billion deal transfers title to 34 acres of some of the most desirable real estate on the planet to Colombia Sussex and they have plans to start over.
And finally, the ongoing feud between Wynn and the casino dealers over the dealer’s tip has taken another turn this week when the National Labor Relations Board (NLRB) jumped into the mess by issuing a complaint against Steve Wynn and some of his managers at the Las Vegas mega-resort. This latest development involves administrative law judges, labor unions, and even the Nevada Gaming Control Board after they finally decided to look closely at the tip distribution scheme Wynn concocted to pay managers more by paying dealers less. His spokespeople explain it as a necessary realignment of the natural order of the rank and file; after all, bosses make more than the people they boss (NFL, NBA, MLB excepted).