Park Place CEO dead at age 58

David Strow

Thursday, Oct. 19, 2000 | 11:22 a.m.

Arthur Goldberg, regarded by many as the most important executive in the gaming industry, died suddenly this morning. He was 58.

The president and chief executive of Park Place Entertainment Corp. of Las Vegas died from complications from bone marrow failure at Johns Hopkins hospital in Baltimore. Park Place's board will meet today to begin the search for a new chief executive, the company said in a statement.

No further details were immediately available. Goldberg had been rumored to be ill for some time, though the company had tried to downplay those rumors.

For a man best known as one who built his company through buyouts, it is perhaps fitting that Goldberg's last major accomplishment was the one hotel-casino he helped create and build -- the $785 million Paris Las Vegas, opened in September 1999.

Like its neighbors on the Strip, the Paris still wows visitors with its scenes of the French capital, and its 50-story replica of the famed Eiffel Tower. But it also wowed investors and analysts for one key reason -- it opened on time, and it opened right on budget.

In other words, vintage Arthur Goldberg -- a man devoted to the bottom line. Though usually a buyer, Goldberg was willing to sell when it made sense, selling his company to Hilton Hotels Corp. in 1996 and selling the Las Vegas Hilton to developer Ed Roski earlier this year.

"He was more interested in the bottom line, and was willing to (accept a reduced role) in a bigger company," said Shannon Bybee, executive director of UNLV's International Gaming Institute. "He knew how to run a place very profitably, to get the last dollar out of it, and to see the advantages of combining companies.

"He was one of the first people to begin doing that, and did it on a bigger scale than anyone else."

In a statement, Park Place Chairman Stephen Bollenbach called Goldberg "a true leader, visionary and builder of great companies."

"He has left behind the biggest, best and most financially healthy gaming company in the world," Bollenbach said. "He was a great friend to me and I will miss his warmth, energy, commitment and leadership."

It was a sentiment shared throughout the industry this morning. For gaming's top executives, Goldberg was a powerful competitor, but he was also considered a good friend.

Terry Lanni, chairman of MGM MIRAGE, remembered inviting Goldberg to an early Mike Tyson fight. At the time, Lanni said, Goldberg jokingly told him that no one in the industry liked to invite major competitors to big events. Still, Goldberg went -- and brought along NBA star Charles Barkley as his "date," Lanni said.

It was proof friendship could co-exist with competition.

"He was one of the first to call me when the combination of these two companies (MGM Grand and Mirage Resorts) took place, and he was very generous in his compliments," Lanni said. "He's a brilliant guy, and I considered him a friend.

"I will miss him. He was young, way too young."

It was the merger of MGM Grand and Mirage that caused some to crown MGM majority shareholder Kirk Kerkorian the new king of the gaming industry, though others felt Goldberg was more important because his company was larger. Goldberg had replaced Steve Wynn as king of the industry, observers felt.

"This is a very sad day for the industry," said Harrah's Entertainment Inc. Chairman and Chief Executive Phil Satre. "Arthur was a very positive influence on this industry. I started my career in Atlantic City in 1978 ... and know how good he was for that area.

"He was a true mover and shaker in the industry, and he will be missed."

"The industry has really lost one of the most innovative and aggressive leaders we've had in some years," said Frank Fahrenkopf, chief executive of the American Gaming Association. "It's a real loss for the gaming industry."

Goldberg, who lived in New Jersey, is being remembered as the man who built Park Place into a power through shrewd business deals. In 10 years, Goldberg went from the owner of a New Jersey trucking company to chief executive of gaming's most powerful corporation.

For Goldberg, the path began at Bally Manufacturing, a manufacturer of slot machines and owner of a chain of health clubs -- a "crippled company", as Lanni calls it. Goldberg took over Bally in 1990, and over the next six years, took it from the brink of bankruptcy to a highly profitable organization, primarily through cost-cutting measures.

"He took over a very troubled company, and brought to Bally's a unique understanding that you have to run a company in an efficient yet productive way, remembering that when you deal with a public company, you work for the shareholders and the employees," Fahrenkopf said.

Goldberg's turnaround of Bally made it attractive to a very big buyer -- Hilton Hotels Corp. of Beverly Hills, Calif., which bought Bally in 1996 for $3 billion. For Goldberg, it meant the end of running his own company; instead, Goldberg settled for the title of president of Hilton's gaming operations.

That, however, proved short-lived.

In 1998, Goldberg struck a pair of huge business deals. One was the $1.2 billion acquisition of Grand Casinos Inc., which brought three Mississippi casinos into the company. The other was the simultaneous spin-off of Hilton's gaming operations into a new company.

Goldberg, who had sold his company to Hilton two years before, emerged as the CEO of a far larger independent company. He named the spin-off Park Place Entertainment.

"You don't see that very often, where someone comes in, sells his company, rises and becomes more powerful in many ways, then spins it out again," Bybee said.

One year later, Goldberg's deal-making reputation reached its crescendo. In 1999, Goldberg engineered Park Place's $3 billion acquisition of Caesars World Inc . -- at that time, the largest buyout in the history of the gaming industry. The deal made Park Place the largest gaming company in the world and gave it the magnificent Caesars Palace resort on the Las Vegas Strip.

"Arthur had great business acumen that worked in many industries, but his greatest feat was building the largest and most diversified gaming company," said Andrew Zarnett, gaming analyst with Deutsche Banc Alex. Brown. "He was clearly the leader in consolidation. And for those of us that knew him closely, he was a great friend."

Though best remembered for his business deals, the intensely private Goldberg also gained a reputation for philanthropy.

In May, the Anti-Defamation League awarded Goldberg its special achievement award in Las Vegas "in recognition of his distinguished career, visionary leadership and unwavering commitment to philanthropy." The ADL cited Goldberg's financial support of Johns Hopkins and Columbia Presbyterian hospitals, his founding of a scholarship fund at alma mater Villanova University, and his contributions to the Jewish Foundation for the Righteous.

Still left unanswered this morning was the question of who will assume the CEO's role at Park Place.

Until a CEO is found, Park Place's day-to-day operations will be managed by a team of four executives -- Wallace Barr, executive vice president of Eastern operations; Clive Cummis, general counsel; Mark Dodson, executive vice president of Western operations; and Scott LaPorta, chief financial officer. Bollenbach, CEO of Hilton Hotels, will provide "general oversight" to the company as well, Park Place said.

Dennis Neilander, member of the Nevada Gaming Control Board, said that the control board shouldn't have any issues with the transition plan, since Bollenbach had been previously licensed in the state.

"There is a good management team in place," Neilander said. "(Bollenbach) is very familiar with the gaming side, very familiar with those properties."

Earlier this year, Fortune magazine had reported Goldberg was planning to name a successor from within the company soon. The magazine named Barr and Dodson as the most likely successors.

"No one really stands out in that company, other than him," Bybee said. "The challenge is going to be who controls (Park Place). He has no heir apparent, someone he's grooming for that position."

But other observes insisted Park Place will survive the loss of the man regarded as its creator.

"In addition to building a great company, he built a great management team that as a group should be able to do a great job at managing and continuing to build the company," Zarnett said.

Still, no one can really replace Goldberg in the gaming industry, Neilander said.

"You can talk about him in terms of the past, but the damage is in the future," Neilander said. "He did have a vision, and was one of those people who was able to look into the future.

"The things we're going to miss most are the things we don't know would have happened."

Goldberg is survived by his wife, Veronica, his four children and six grand children. Contributions can be made in Goldberg's memory to the Arthur Goldberg Memorial Fund at Johns Hopkins at 1620 McElderry Street, Baltimore, Md., 21205.

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