Las Vegas Sun

September 21, 2014

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Columnist Jeff Simpson: A poor start for Landry’s chairman

Jeff Simpson is business editor of the Las Vegas Sun. He can be reached at [email protected] or at (702) 259-4083.

Landry's Restaurants Chairman Tilman Fertitta has owned the Golden Nugget for six weeks, and the Texan is rapidly making an impression in Las Vegas.

A lousy impression.

In 40 days Fertitta has canned several of the Golden Nugget's top executives and laid off scores of additional employees.

But what's really raised eyebrows is Landry's war of words with Steve Wynn.

Landry's General Counsel Steven Scheinthal surprised resort executives last week when he said that Wynn was acting like a jerk in his legal efforts to prevent Landry's from hiring a Wynn casino boss who had a three-year contract to run the company's Golden Nugget Laughlin.

Last week Scheinthal said Wynn's lawsuits against Golden Nugget and his former boss were an example of the Wynn Las Vegas owner's arrogance.

" 'I'm Steve Wynn,' " Scheinthal mocked. " 'You're new in town. You should give me my way.' Steve Wynn thought he could bully Tilman around. We are not scared of litigation with Steve Wynn. We are a billion-dollar company. We are litigious as well."

Wynn criticized the company's cowboy mentality (a comment that prompted Scheinthal to wonder how Wynn's Texas customers would respond to a criticism of cowboys), and a top casino industry insider said Fertitta is a bully.

"Landry's philosophy is 'we're not afraid of litigation,' " the executive said. "As a strategy that is possible. These guys bully everybody into backing down or fighting. But by taking on Steve Wynn, they've met their match. They bullied the wrong guy. Fertitta's a big shot in Houston, but he's not in Houston anymore.

Although Fertitta cousins Frank Fertitta III and Lorenzo Fertitta declined to comment on Tilman Fertitta's actions as owner of the Golden Nugget because they don't talk about their family, other executives said the Las Vegas side of the family is unhappy about their cousin's introduction to the market.

"They're mortified about this," the insider said.

Fertitta quickly learned that Wynn carries a lot of weight in Las Vegas and Landry's seems to be backing down from the company's earlier confrontational stance against the Strip kingpin.

By Friday Fertitta was exasperated, seemingly ready to do everything he could to end the controversy.

"I think we're in a no-win situation," Fertitta said. "I'm trying so hard to settle this matter."

He defended the company's actions after taking questions about some top Golden Nugget executives who have been fired or forced to resign -- all supposedly in an effort to show that "there's a new sheriff in town," as one top Las Vegas casino industry insider said.

On the day Fertitta acquired the Golden Nuggets in Las Vegas and Laughlin for $295 million he fired some of the property's top executives, the insider said.

The new owners told the managers that if they didn't accept Landry's offers to buy out their contracts they would be fired for cause.

If you don't like it, take us to court, the executives were told.

Among the managers told to pack their bags were the Nugget's top marketing and sports book executives. Several of the former bosses plan to challenge their dismissals in court.

Many casino owners change managers when they acquire a new property, but it was Fertitta's take-it-or-else offers that violated Las Vegas custom, the insider said.

Scheinthal said the offers were more than fair, saying that the deals allowed the former executives to take new jobs and keep the payments.

Scheinthal and Fertitta said the top sports book and marketing managers were offered more than 50 cents on the dollar of the value of the contracts -- "hundreds of thousands of dollars," Fertitta said.

And the job cuts are easy to explain, he said. Food outlets have been closed and other parts of the downtown hotel are being renovated. When new restaurants are opened and renovations are complete, new workers will be added.

Fertitta has his work cut out for him if he wants a warmer welcome in Las Vegas. He hopes his plan to revitalize and expand the Golden Nugget will help, and believes his ideas about master-planning a transformed Fremont Street Experience can revitalize downtown.

But a top casino industry insider says Fertitta has a lot to learn.

"First move in Las Vegas and he's (urinating) on Steve Wynn's leg? How (expletive) dumb is that?"

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