Billionaire’s career filled with highs and lows

Monday, April 26, 1999 | 10:56 a.m.

Sheldon Adelson has become a one-man road show, softening his cantankerous image before local service organizations while pitching the new Venetian resort.

He delivers his rags-to-riches story as if his audience were gathered around a dining room table.

At a Latin Chamber of Commerce gathering at the Gold Coast hotel-casino last fall the stocky, 5-foot, 5-inch Adelson welcomed his listeners by declaring: "I'm the short guy. I don't have to worry about raising the microphone. I have to lower it."

Born in 1933 as the son of eastern European Jews who fled to this country to avoid slaughter at the hands of Russians and Cossacks, Adelson grew up poor in the Dorchester section of Boston. His father was a taxicab driver who came to this country at age 12, and his mother was a knitting instructor. They could barely make ends meet.

"When I was a child, I was violently victimized for being a Jew," Adelson told the Wall Street Journal. "We had to walk to school in groups."

The Adelson family lived in the back of a store. Adelson and his sister and two brothers shared a bedroom, sleeping on mattresses on the floor. When their dog Brownie had 13 puppies, the children put the litter in a newspaper-lined drawer but eventually had to give them away because they didn't have the money to feed them.

The Adelson children were able to attend summer camp but only through the generosity of a neighborhood Jewish organization that paid their way. Still, Adelson's father kept his own charity box.

"He taught me a lesson that there's always someone poorer than we are," Adelson told the chamber. "It is our obligation in life to share with people who are poorer than we are. I follow in my father's footsteps. I care about family, and I care about community."

Adelson's first foray into business was at age 11 when he began hawking the old Record American newspaper on a Boston street corner for a nickle a copy. He "bought" one corner for $200 and then acquired others, borrowing money from a credit union to which his uncle belonged. At age 16, he borrowed $10,000 to acquire candy vending machines in Brockton, Mass., and then sold them for an ice cream franchise.

He also employed kids to sell candy at ball games, and he worked in a bagel bakery.

"I fought my way out of poverty," he told the chamber. "I worked my butt off."

As a young man in the 1950s, Adelson attended night school to become a court stenographer. His siblings also attended trade schools.

"Most of us became tradesmen because that was the level of education our parents aspired to," Adelson told the chamber.

He also served two years in the Army, working for the judge advocate's office in New York City. While in the armed services, he had a security clearance because he was around atomic research facilities.

He had his eye on Wall Street, however, and learned what he could about the world of financing by taking business courses at City University of New York.

Four decades and 50 businesses later, the 65-year-old Adelson attributed his success to the fact that "I seem to have a different view."

"You have to go into a business and ignore all the taboos and mores by asking, 'why and why not?' " Adelson told the chamber. "Why do people do things in the business the way they do and why not some other way? Of the 50 businesses I've been in, I never did it the way people were doing it. Otherwise I couldn't bring anything to the table.

"You have to ask questions and challenge the status quo."

Adelson, who declined to be interviewed by the Sun, has given the media scant details of his business career from the 1950s until he founded the Comdex computer trade show in 1979.

"Until I was in my thirties, I never knew I was an entrepreneur," he told Boston Magazine in 1989. "I thought I was just a floater."

The Venetian media packet contains only a three-paragraph biography of Adelson, who also closely guards his private life.

Since 1991 he has been married to wife Miriam, an Israeli-born physician. He and his wife shuttle between Las Vegas, Boston and Israel by private jet and own residences in all three locations.

Though Adelson is considered a billionaire, his wealth wasn't acquired overnight.

After his Army days and his stint as a court stenographer in the 1950s, Adelson remained in New York to become advertising manager of a financial magazine. He then began helping companies find underwriters to sell stock and go public, an occupation that made him a millionaire.

He moved from New York to Tampa, Fla., in the late 1950s and then returned to New York in 1960. Two years later he returned to Boston, where he helped companies such as high-technology firms and pet stores go public.

Later in the 1960s he began accumulating troubled companies. But he had a rocky road to the top.

One of his first business successes, a hotel supply company, burned to the ground, according to the Boston Globe. Business Week magazine also reported that Adelson went $1.5 million in debt when the stock market slumped in 1969. He was struggling to pay even his own household bills, so much so that he was sued dozens of times for alleged non-payment.

Adelson rebounded in 1971 when he acquired a bankrupt publishing company and based it in Needham, Mass. With Adelson as chairman and majority shareholder the company, called Interface Group, initially published the computer industry trade magazine Data Communications User.

Adelson also handled condominium conversions and in 1973 hosted his first trade exposition in Dallas. That show served the electronics industry, and he added others for such businesses as emergency management and lab equipment.

He reportedly lost a second fortune in the mid-1970s because of a failed condominium project. In 1975 his Massachusetts real estate license was suspended for six months as the result of a customer's complaint about the project. Though his license was reinstated, Adelson left the real estate business to concentrate fulltime on Interface.

He eventually sold the magazine but it was in the promotion of trade shows that Adelson made his biggest killing.

"A trade show is a magazine in the flesh," he told Forbes magazine in 1983. "The editorial is the conference held in conjunction with the show, the readers are the attendees and the advertisers are the vendors on the floor."

While reading a computer magazine during an airplane flight from Chicago to Boston in 1979, Adelson realized there was no trade show that catered to computer salesmen and dealers. It didn't matter that he knew next to nothing about how to use a computer. Within days of his return to Boston, Interface staffers were on the phones trying to drum up interest in a computer trade show.

The result was Comdex, an acronym for Computer Distribution Exposition, which opened in Las Vegas later that year at the old MGM Grand hotel-casino with 4,000 delegates. Like most of his other business ventures, Adelson chose Las Vegas as the host site simply on a hunch. He figured the audience would like the city's neon and entertainment.

"There's a saying that goes around -- Wayne Newton fills the showrooms, Frank Sinatra fills the hotels and Comdex fills the city," Adelson told the Sun in 1985. "We're kind of proud of that."

Adelson personally introduced the keynote speakers at Comdex. The show's top product awards were named "Shellys" in his honor.

Interface grossed about $100 million by 1983, when it had about 350 employees. The company produced more than 30 computer, travel and communications trade shows and conferences in addition to Comdex. The shows had names such as Windows World, New Media Expo, Uniforum and Enterprise Computing Solutions.

Adelson's practice of intertwining his businesses was typified in his establishment of Five Star Airlines in 1984, a small charter service with four Lockheed L1011 wide-body jets. He bought the airplanes from TWA so that he could use them during the winter months to help shuttle participants to his trade shows. He then leased the planes back to TWA during the summer.

Interface also established a charter vacation division called GWV International with the ability to offer hotel reservations and airline tickets.

When Adelson acquired International Weekends of Boston in 1986, a company that specialized in European vacations, the merger made Interface the largest charter travel company in the United States. The prior year the two companies had combined sales of $200 million and served 250,000 passengers, according to the New York Times. Adelson also operated Galilee Tours USA, which took its name from the northern region of Israel.

Reporters who visited Interface's offices in Needham in the 1980s described them as filled with floor plan drawings for future trade shows. Adelson's own office, overlooking a state highway, was lined with citations from charitable organizations and a map of Israel.

But a Boston Globe reporter also described his office as an "unadulterated mess," with scattered gifts and unopened cardboard boxes, a globe and stand still wrapped in plastic, and an old desk chair whose vinyl cover was peeling so that it revealed the orange sponge cushioning. The ceiling was painted but the walls were not.

"Yes, it's true that I can afford to have a nice office," Adelson told the Globe in 1988. "But it's also true that I can afford not to have one."

By the end of the 1980s Interface grew to 600 workers, but there were reports of high employee turnover, a murderous work pace and plenty of yelling and screaming at its offices. Though Interface continued to rake in money, Adelson still had occasional business slip-ups.

He told Business Week magazine in 1988 that Cinetex, a new film festival he was starting, would be "bigger than Cannes." But Cinetex flopped, as did other public exhibitions that Interface had to close because of poor attendance.

Massachusetts records show that other companies affiliated with Adelson, such as Boston Film Group Inc., Communication Trends Securities Corp., CTI Travel Inc., and Showboat Marine Inc., also became inactive after forming in the 1980s.

The annual fall Comdex show also developed its share of critics. Participants began complaining by the mid-1980s that the show had become too big, split into so many locations throughout town that it became impossible to visit all the exhibits.

Boston Magazine reported in 1989 that Adelson once ordered a Comdex exhibitor to shut down because he didn't think the company belonged in the main hall, even though his staff agreed to the placement. Adelson told the magazine the flap occurred because free booth space was given to a news-gathering organization in violation of Interface policy. The exhibitor eventually was allowed to stay put.

There were exhibitors who complained that Adelson charged them exorbitant fees to set up their booths and enforced rules that were too strict. By 1988 he was charging visitors an average of $300 for admission and seminar fees.

He also made money through 10-percent commissions on hotel rooms, airline reservations and car rentals booked by participants and by selling advertisements in the daily Comdex paper at $10,000 a page. Interface reportedly grossed at least $25 million per show and was generating $250 million in sales by 1988. By using the Las Vegas Convention Center, Adelson also was taking advantage of some of the cheapest convention facility rental rates in the country.

"I'm sure there are people who do not like me, but I try to do everything I can to be principled," he told InfoWorld magazine in 1985.

Casino executives such as then-Circus Circus owner Bill Bennett and Michael Gaughan, owner of the Gold Coast and Barbary Coast, grumbled that show patrons took up hotel room space but didn't gamble.

During his early years with Comdex, Adelson cemented his reputation as a controversial figure by hurling barbs at competing show promoters.

Later, the Wall Street Journal reported that he had to stave off a threatened revolt at the 1994 show by Microsoft Chairman Bill Gates and other prominent computer industry executives. They were angered by Adelson's plan to charge an extra $25 admission for people to attend their speeches. Adelson compromised by donating the money to charity.

Despite such controversies, defenders of Comdex argued that the show pumped more than $100 million of non-gaming revenue into the Las Vegas economy annually. And Adelson's show, riding the coattails of the booming computer industry, became so popular he added sessions in Atlanta, Chicago and Los Angeles as well as in Europe, Japan and Australia. He was considered one of the 25 most influential people in the computer industry by a leading trade journal.

By the time Adelson sold his trade show division to the Japanese software firm Softbank Corp. in 1995 for $860 million, Comdex had held the title of largest industry trade show in the United States for more than 10 years. Adelson's last Las Vegas Comdex show drew 200,000 people, 50 times the turnout of his first one.

The sale launched the already wealthy Adelson into the sphere of the mega-rich and enabled him to build the Venetian through his company, Las Vegas Sands Inc.

TUESDAY: A look at Sheldon Adelson's involvement in Southern Nevada politics.

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