The Loveman Legacy
Gary Loveman revolutionized the Las Vegas gaming industry by harnessing the power of every single byte of information casinos gather about their customers to create a marketing machine never before seen in world of business - Total Rewards. Total Rewards knows who you are, what you play, what you like, where you eat, where you shop, what your favorite color is, what hotel offer types you don't respond to, whether you like free rooms at lower star hotels or buy one get one free at higher star hotels, when you visit, who you come with, where you stay, where you play, what specific slot locations in the casino you gamble in, what your favorite cocktails are, who your favorite sports teams are, what music and entertainment you like, what kind of computers you have, how much you paid for your house on and on and on and on. It was the invention of the Total Rewards program - certainly not the style and class of Harrah's/Caesars aggregate of mid-tier properties - that gave Harrah's the firepower to take the Strip by storm through acquisition.
Even now, all these years and technological advances later there is no casino rewards program that comes remotely close to the effectiveness of Total Rewards. The properties they market aren't (generally speaking) the best, but are slightly better heeled rollers looking for bargains and freebies? No. Rewards marketing works perfectly for the clientele they were attracting. The folks who play at the local barge a half dozen times a year then pounce on that free night at the Flamingo mailer or the typed up letter from Rio. Y'know, the regular buffet dinner crowd who prefers to put their vacation money into the machine than the pillowcases.
This should be the legacy of Gary Loveman.
Depending on how bad the bankruptcy proceedings go, Gary will probably be remembered for making one big bet at the absolute worst time - following Apollo/TPG down the plank of the leveraged buy out that took the company private and saddled them with the debt that would kill it.
Who was to know that the real estate market collapse would implode the entire economy? In those days, money was cheap and rooms at lux resorts were asking and getting $300-600 a night. Loveman got caught in the same fervor that brought us CityCenter (almost bankrupted), Cosmopolitan (bankrupted), the SLS (failing), Echelon (mothballed, sold), the Strip version of New York's Plaza Hotel (bankrupted, sold), Tropicana redo by Columbia Sussex (bankrupted, sold) Crown Towers (aborted), Fontainebleau (bankrupted, sold), Maxim Magazine Resort (aborted), the City Center North (aborted), Venetian expansion (mothballed) and a litany of other pipe dream projects, large and small. They all made the decision to go for it when the gettin' was good. Unbeknownst to all, the gettin' would get them got.
Perhaps Loveman deserves credit for keeping Caesars' listing ship afloat for as long as he did. The other casino companies had their death spiral financial crisis' in the late 00's. They took their medicine by scrimping, saving, selling, refinancing and paying down debt. Caesars did some of that via deferring maintenance and mothballing capacity expansion at Caesars Palace, but what about all the other post-LBO bets? The purchase of Planet Hollywood, the golf course play in Macau,
buying Imperial Palace, Octavius Tower, recent spends on The Linq, High Roller, The Quad, east coast projects and the The Cromwell. Caesars Entertainment could've limped along making minor, yet significant upgrades along the way (finishing the inexpensive but awesome Go Room refurb at Flamingo) but instead, they opted to feed the debt monster by buying.
How can I be broke, I still have checks?
Caesars has known that their death knell was about to peal. Their asset-hiding shell game was transparent enough that even an untrained financial doofus like yours truly could see right through this charade of an endgame. To think they think they've fooled anyone?Seven out, new shooter.
The details surrounding the end of Loveman's tenure will come forth at some point - was he pushed? did he jump? was it mutual agreement? And how much is his golden parachute worth? In the end, Gary Loveman turned a collection of funky riverboat casinos into one of the smartest failures of a casino company we may ever see. It truly is a fabulous disaster.
Bow your heads.
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