In late June, Caesars Entertainment Chairman Gary Loveman officially stepped down as CEO for the company, entrusting the day-to-day operation of one of the largest gaming operators in the world to Mark Frissora, the former CEO of car rental giant Hertz.
I wish I could say Loveman was leaving on a high note, but you would have to be living under a rock in the deepest desert not to know Caesars Entertainment has been under a fiscal cloud for the past seven years or so, ever since the company was bought out for $30.7 billion by private equity firms Apollo Global Management and TPG Capital in early 2008, just as Wall Street was about to sink into the worst financial crisis since the Great Depression. The $22 billion in post-buyout debt has been a heavy anchor for the company, and largely because of it the operations division of Caesars Entertainment was forced into Chapter 11 bankruptcy protection and reorganization in January. It was during this difficult period that Caesars announced Frissora would step-in as CEO starting July 1, and that Loveman would remain as chairman overseeing the restructuring of the company and its various divisions.
“Now, with the company in the midst of a formal restructuring of one of its subsidiaries and a merger between entities, the time is ripe for a transition,” Loveman said in a company press release last February. “It has been an honor to be the chairman and CEO of Caesars Entertainment. My decision to begin to transition management now comes with the confidence that we have taken the steps necessary to ensure the company’s long-term success.”
Since that announcement the knives have come out for Loveman. It’s no secret that his professorial manner and sometimes caustic wit alienated some in the gaming community, many of whom are now attacking him in paroxysms of pure schadenfreude. Much has been made about his pay (his shares and stock options with the company are worth a reported $90 million and he made $32 million in total compensation last year), his use of the company jet, his role in laying off 19,000 employees—roughly 20 percent of Caesars 2007 workforce—while still expanding into new markets in South Korea and elsewhere, and the general economic performance of Caesars under Loveman’s leadership, with some analysts pointing out that even before the buyout, the company was not growing at the same rate as many of its competitors.
But often lost in all this negative flack is the positive influence Loveman has had on the gaming industry as a whole. I remember when he first landed at Harrah’s Entertainment as COO in 1998; his Harvard Business School teaching background giving instant gravitas to the gaming industry, then considered something of a backwater business by economic elites. Loveman was one of the first gaming executives to truly grasp the importance of loyalty initiatives to mass market casino patronage, and overhauled Harrah’s Total Rewards, which quickly grew to have 46 million members and is still the gold standard for casino industry loyalty programs. Loveman was given to top job at Caesars in 2003 and he transformed it from a regional gaming company to a leading international gaming, entertainment and hospitality company, growing value from $7.9 billion to $30 billion at the time of the company’s privatization in 2008, according to press materials. During his tenure, Loveman presided over the acquisitions of Caesars, Planet Hollywood, Horseshoe, the World Series of Poker as well as the development of Horseshoe casinos in Cleveland, Cincinnati and Baltimore. He is an excellent public speaker, served as chairman of the American Gaming Association, and garnered hundreds of other accolades and honors.
Unfortunately, as it stands now, Loveman may be best remembered for his two biggest missteps—the timing of the Caesars Entertainment LBO and passing on a chance to get in on the ground floor of Macau casino expansion. Luckily, he still has plenty of time to write his final gaming chapter, which will hopefully begin with re-creating a financially sound Caesars Entertainment.