Facebook
Fark
Digg
Reddit
StumbleHarrah’s gets OK for Planet Hollywood purchase; job cuts planned
Wednesday, Feb. 3, 2010 | 1 p.m.
Sun Archives
- Harrah’s to take over Planet Hollywood management (1-15-10)
- Harrah’s moves ahead with possible Planet Hollywood acquisition (11-30-09)
- Harrah’s working on plan to take over Planet Hollywood (11-25-09)
- Planet Hollywood’s financial outlook worsens (11-16-09)
- Harrah’s buys Planet Hollywood debt (9-15-09)
Related Document
Harrah's received preliminary state approval to acquire Planet Hollywood today, with company executives telling gaming regulators they plan to cut the property's workforce by less than 5 percent.
The Gaming Control Board recommend approval of the deal, which calls for Harrah's to acquire $306 million in debt at a discounted price of under $70 million and to assume the remaining $554 million debt to gain ownership of the hotel-casino.
Board Chairman Dennis Neilander noted there are 40 gaming companies in Nevada in bankruptcy and Planet Hollywood might have been headed for a restructuring or "perhaps bankruptcy" until Harrah's stepped in. The acquisition "makes a lot of sense for Harrah's and it's a benefit for the state," he said.
Marilyn Winn, who is president of Harrah's Bally's and Paris properties, will also assume the leadership at Planet Hollywood. She and Tom Jenkin, president of Harrah's western division, outlined plans to revive the fortunes of the newest casino in the company's empire that includes more than 50 casinos across four continents.
Jenkin said Harrah's will assume the company will take over operation of restaurants, entertainment and nightclub at Planet Hollywood. He said the present entertainment group has not been able to provide quality entertainment. "We can do that."
The Miss America Pageant was staged in January at Planet Hollywood and the Miss USA contest will be held in May. Harrah's also will promote movie premiers at the hotel casino.
Winn said there are currently 2,300 employees at Planet Hollywood and the company plans to cut less than 5 percent of the workforce. Harrah's will assume the collective bargaining contracts in effect.
Jonathan Halkyard, Harrah's chief financial officer and treasurer, told the Control Board that the company "continues to see a softness in gaming" and it "does not see a real strong recovery now."
But company officials said they believes they can prop up Planet Hollywood with management and efficiencies to show a slight growth in the near future.
The Nevada Gaming Commission will meet Feb. 18 to give final approval and, if approved, Jenkin said Harrah's will assume full control at noon on the following day.
Harrah's plans to pump in $30 million as working capital for the Planet Hollywood. To rejuvenate Planet Hollywood, Jenkins said it would tap its customer base and draw new players. It will use direct mail, group sales and try to attract leisure visitors.
Of the $554 million outstanding of the debt, the loan will mature in December 2011 and there are options to push the maturity to April 2015. Halkyard said the company will pay $20 million in interest on the debt a year.
According to documents supplied the board, Harrah's had a net debt of $20.8 billion as of last Sept. 30. By making financial transactions, Halkyard said it was able to reduce its debt by $4.2 billion and its annual interest payments by $150 million.
Discussion: comments so far…
Comments are moderated by Las Vegas Sun editors. Our goal is not to limit the discussion, but rather to elevate it. Comments should be relevant and contain no abusive language. Comments that are off-topic, vulgar, profane or include personal attacks will be removed. Full comments policy. Additionally, we now display comments from trusted commenters by default. Those wishing to become a trusted commenter need to verify their identity or sign in with Facebook Connect to tie their Facebook account to their Las Vegas Sun account. For more on this change, read our story about how it works and why we did it.
Only trusted comments are displayed on this page. Untrusted comments have expired from this story.
No trusted comments have been posted.
Post a comment
Most Popular
- Viewed
- Discussed
- E-mailed
- Chinese company agrees to finance proposed Henderson arena
- South Point owner Michael Gaughan’s take on ‘Vegas Stripped’: ‘I’ll give it an 8’
- Coolican: Henderson officials out of loop on police brutality case, raising red flags
- Romney says he prevented Massachusetts from becoming ‘the Las Vegas of gay marriage’
- See mug shots of 16 arrested in stolen-property police sting
- Criss Angel denies allegations of fight with fired employee
- UNLV eager to get on the court for big game against San Diego State
- Lumberjacks — ‘Where the Big Boys Eat’ — hiring for North Las Vegas location
- Berkley draws stark contrasts with Heller over immigration
- Conceptual design unveiled for Henderson Space and Science Center
Blogs
The Kats Report
Live color from the scene at Thomas & Mack Center: We have a wire job, and the crowd is tense
South Point owner Michael Gaughan's take on 'Vegas Stripped': 'I'll give it an 8' (3 Comments)
Author relishes writing the life story of ‘larger-than-life’ Oscar Goodman (3 Comments)
Elsewhere
Landowner: All roads could lead to Uxbridge casino
Revel reveals smoke-free casino opening
Cirque du Soleil show in Sands China casino to close this month
Meet the woman behind Sheldon Adelson
The Sun
Locally owned and independent for more than 50 years.
This is sad. Another property to be destroyed by Harrah's. Planet Hollywood was poorly managed, but Harrah's will make everything worse for the patron, as it always does. Another nail in the coffin of Las Vegas.
With a very, very, very competitive gaming market here and outside Nevada, how will Harrah's increase revenue beside reducing the work force, which is a saving in cost and expenses. The key word is "Increase" how will Harrah's pull off?
One loser aquires another.
....Harrah is not knows for building and developing the gaming revenue market. The Planet Hollywood purchase will show all weakness and strengths. No excuses! Either Harrah has what it takes to compete, or we will see a fraud uncovered!
"One loser aquires another." -- Agreed.
Can't wait until they implement Total Retards...I mean Total Rewards there. I like losing $8,000 at the slots so I can get a duffel bag.
Thats nice..company is debt heavy (Harrah's), they can afford to buy PH, and thern layoff workers? Talk about a great "valley for Las Vegas"...Regulators must be happy...
The Gaming Control Board is out of its' mind! Don't count on me dropping a cent at a Harrah's property.
This is somewhat sad. I really liked Planet Hollywood and thought they had done a great job renovating it. Yeah, the headliner's and other shows have been an issue but does Harrah's really think they can solve that? Wonder if they are going to try to keep Planet Hollywood geared more towards the younger crowd or if they are going to age it up a bit.
Will Harrah's buy this with debt from a government bank and with a government guarantee on the loan?
Will AIG issue credit default swaps and hand out another $100 million in bonuses so a broke company like Harrah's can take over a bankrupt property like PH?
Where are the increased visitors numbers from the opening of city center? Staying home and saving their money like the President just told them?
i'm actually honeslty depressed about this. i liked this place even when it was the aladdin.
one of the few places i'd go to when i was a local.
even though the parking was just a horrible mess, it had different stores at the mall, and a great buffet, and you could park there and walk to just about every major hotel so it was a great "base of operations" when i had friends come for a visit.
the buffet will be bad because they'll just use the same food they use at all the other buffets to save money.
and yes, this is another downward step for vegas. less competition = inferior product because there's no incentive to try to beat the guy next door when...you ARE the guy next door.
More of the same, i'll stay in FLA and give the Seminoles my action. Man i miss Mecca, hope things get better soon in Vegas.
Obama should have said "Dont blow a bunch of cash on Harrah's".
It's funny how negative you guys are. Same screen names and the same bloviating fools.
You guys would love to see Vegas fail, so you can blame it on Obama, the Dems, etc.
Planet Hollywood was bankrupt and going under, fast. I'm sure you negative nellys would love to see another big casino going under in Las Vegas.
I'm glad Harrah's is taking over the property. I give them credit for keeping it up and running, and hopefully growing the business.
Once upon a time this property was another building built in the mid seventies called The Aladdin. It was a beautiful casino with a big stage over the casino floor for live entertainment while you gambled or just sat at the bar at the front of the stage. This was the era of classic Las Vegas long gone now...
Negative Nellys ?
Oh boyyyyyy...
Maybe if they charged a more realistic room rate they could've survived. I tried to stay there with a group of 7 in January, but the room rates were cheaper at the Bellagio by 15%. Guess which hotel we thought was worth the money?
remember walking thru a few years ago and almost all of the gambling tables are empty and then you notice they are all 15 dollar and 25 dollar games in the stinkin PH. what is wrong with the idiots running these places--this is a nickel or ten dollar joint, at best, pricing all the customers out into the street and to other places--no wonder they were bankrupt. The design of the property was a disaster from the start, the mall sucks--bunch of overpriced crappy restaurants, and some rip off time shares completes the package---oh--and of course the parking was an abortion from the get go--nice plan--to make all the customers walk ten miles through the mall to get to the casino or the restaurants. don't worry--harrahs will spend no money on the property and take everything they can out the back door. Of course the employees will get next to nothing and reminded constantly to be happy they have a job.
Let the layoffs begin....
Maybe they'll have blue light specials.
Oh boy. Ok Neiman, keep your pants on and have another beer. Harrah's is a private corporation. It's not traded on the DOW and it has not and will not receive federal aid. It's an entertainment corporation not a behemoth insurance company that held billions of dollars of private funds in its hands.
As for the rest of the disparaging remarks about Harrahs they misinformed at best. Harrahs has the most generous and simple to use player's program of any of the big Strip properties. Caesar's is one of the oldest hotel brands in the business and still commands high prices and a wealthy clientele. Paris is a great property that is always packed with guests. Do they have low end properties too? Of course. Who doesn't? You can't tell me you think Circus is superior to Harrahs.
Planet Hollywood's management has been a mess from the get-go. Perhaps no one recalls their VP of Marketing being fired for running a drugs and prostitution ring out of his office or Prive losing its license by allowing criminal activity? And let's not forget about the FBI sting operation that arrested a number of dealers and pit supervisors for bilking guests out of thousands of dollars.
Harrahs will make the room rates more competitive and hopefully will revive that enormous theater that's been sitting empty all these years. They are acquiring a property that is newly refurbished and will require nothing but more efficient management. And for those of you who are math deficient, 5 percent of 2500 is 125. One hundred and twenty-five layoffs are certainly better than 2500.
I imagine most of these regular posters are unemployed and/or retired, bitter, inebriated, high or just generally out in left field.
yea sporty, let them stay in left field, I like right field all by myself!
don't jan jones work for them local shoukd protest against harrah. local should not go to any harrahs property
sportyyetpractical, 125 is still more than zero, why does anyone have to be laid off?
I am amazed at the posts on here about Harrah's. They are saving a strip casino from demise. Do we really want to see a large casino right in the middle of the strip with the doors locked and caution tape around it? Harrah's total rewards program is great if you know how to use it. I like the Flamingo, and have stayed there the last 3 years. Haven't paid for a 5 night stay since year one. All they ask is that you spend a little time there. When the sun sets and the Flamingo changes table limits, I go somewhere else.
I receive a letter from the Trop this past fall, asking me to come try them again as I use to stay there every year until all the perks went away. They were going to comp me a room. They really wanted me back, to the tune of they would give me one night free with a 4 night minimum!!
I always read these doom and gloom comments about Harrah's, but one has to admit, when you walk into Harrah's (the casino) Ceasars, Flamingo, Bally's and Paris, aren't they mostly packed with people? PH, Wynn, and the Vanitian were ghost towns last yeaar.
They are not saving a strip casino from demise. Have you been in Ballys or the Flamingo lately? Those are strip casinos in demise and guess who owns them. Harrahs does not have the best comps. And people are staying out of Vegas because they get better blackjack and slot odds at their local Indian Casinos. One or two big monopolies do not help the Strip. Just the opposite. Harrahs is, in large part, why people are no longer coming to Vegas. If not for places like the Wynn and Venetian, Harrahs would probably pay even money on blackjack or 4:5 if they could get by with it. As fewer customers show up let's take more from those who still come. And take it from them faster! Which then creates fewer customers still. Hmm, I wonder how that business model will work? Better to let a few casinos fail outright and then start over than to let the strip become an ugly monopoly or two. Competition was better for Vegas. If somebody had a bad experience in one place they had plenty of options. Now the option is to stay home.
Leaving aside the vitriol about Harrah's and PH, the "macro" view is discouraging. Las Vegas grossly overbuilt itself with borrowed money and must now reduce capacity.
Like it or not, a couple of hotel/casino/resorts may wind up closing their doors in the next twelve months or so, and that can actually be a good thing. Capitalism requires "creative destruction".
Everyone bemoans the demise of the "Old Vegas" where players were comped to the heavens and F&B was cheap. It was easy to do when your balance sheet wasn't groaning with debt! Let a couple of properties go under, there will ultimately be more revenue for those that survive, and a little more room on their P&L for for treating customers better.
I stayed at the PH 3 times before all within 2008-2009. It was a great Casino, That will be the last time I stay at the PH.
Sportybutpractical, I couldn't have said it better. Harrah's is great! I with that Planet Hollywood hadn't taken over the Aladdin. Anywho, Good Luck Harrah's! I love the Total Rewards Program!!! I was married at Caesar's Palace. Getting ready to go to Vegas & staying at a Harrah's.
Vdoog, it is called a "recession", that is why there must be layoffs. Vegas is #1 in foreclosures, etc... Read the news. Even a money maker like Walmart is getting ready to do more layoffs (in Arkansas).
I do agree that under the current ownership The Planet Hollywood Hotel & Casino is too pricey.
How can 5% of 2300 employees make a difference? That's nothing...unless they START with 5% and work their way up to 15-20%.
As someone said, say what you will about Harrah's, but the properties, or most of them, are always busy, especially the flagship Harrah's.
"Can't wait until they implement Total Retards...I mean Total Rewards there. I like losing $8,000 at the slots so I can get a duffel bag."
Nightmare:
Ain't that the truth!!! I don't want to make you feel bad, but our local casino here is giving away duffel bags with NO PLAY!!! The place reminds me of how Station Casinos used to be - good to their customers, winning machines, a place you want to keep going back to and nice gifts with no play required. You'll never see that again in Vegas.
sporty, Sunfish, and Texas. Add another to your bandwagon. I have tried many, and Harrah's does have the best comp program and they appear to be the only casinos that actually have customers and some excitement. They are not perfect, they have work to do, they need to listen to the voice of the customer, but they have the most potential to succeed.
My condolences to PH, their employees, and their patrons. This is another one that Harrah's will drive into the ground. Harrah's panders to society's lowest of the low - you should see the riff-raff they invite in! While Loveman, Winn, and others in the Ivory Towers collect their insanely huge multi-million dollar bonuses, they are at the same time asking their minions on the front lines to give back their teensy-weensy pay raises, cutting hours, cutting jobs, and diminishing the quality of their employees' work life. You should see the dog food that is served in the employee dining rooms!!! Deplorable! And as they make the pitch to soften the blow of the cuts, they are all the while proceeding with new property purchases and developments, the latest venture being in Macau. Yep, Harrah's is a low-class operation that only serves to take the sparkle and sophistication away from the Las Vegas Strip. The approval of the PH purchase is bad news indeed.
As almost everyone commenting on this seems to know how to run casinos better than Harrah's, I am surprized that none of you bought PH and made billions already?
IP said it right - all the taxi driver rocket scientists who dream or yesteryear and always "want a deal" that legitimate players will always get and marginal players will always cry about. Competition favors the player and in that regard the Harrah's and MGM's of the world may not be the best thing for the industry, the market, or the state but anyone suggesting they lack expertise is obviously disgruntled on a personal basis. No company is flawless and frankly they surprise and disappoint me more than I would expect but the moaners and groaners don't invest their money operating a business, they merely profess the ability to do so better than those who do. Me? I think I can play guitar better than Keith Richards.
I think Harrah's is doing a fine job. Yeah they have some tables with 5/6 odds, but that does not mean you have to play those tables. And the rewards program has been great to me. I only spent $600 on gaming during my last stay and have been comp 5 free nights at the flamingo for my next stay. That is perfect, because it gives me more money for entertainment and that is what vegas is all about. It already costs aroung $350 for a round trip ticket from MN so recieving a comped room is huge. Increasing my level of fun by giving me more money to do it will keep me coming back for more.
The only thing good about PH is their dinner buffet. I bet Harrah's ruins it!
Harrahs will destroy this property. As a former employee, I saw them acquire a property and within two years , their business was down 30 plus percent. No service, dirty rooms, horrible food, and total ignorance.
I thought Penn National was in the market to buy a property in Las Vegas? Too bad they didn't make a play for PH. The town needs more competition.
HARRAH'S CHEATS...
I pity the patrons and employees of planet hollywood.
player beware...Harrah's rigs the cards
drugs its high rollers and keeps the drinks coming till u drop all your $$$ then tosses you on the curb...
please FEDS break up the marriage between Harrah's, the Gaming Control Board, and the debt collector with a gun D.A. Bernie Zadrowski....
God save us from this tyrant dictator...
HARRAH'S CHEATS....HARRAH'S CHEATS!!!
Ridiculous...
At Least They Have a Understandable Comp Policy...Im not a big player but have received a lot of comped rooms and food credit from a company, although very large,have treated my wife and I very well..I credit this treatment directly to the workforce at the casinos we have stayed at..They have issues like many big companies, but please give the employees some credit.
Harrah's is the worst gaming company. Oh, yeah that's right it is not a gaming company but an experiment for all Harvard alumni. They love to hire smart MBAS who raid the property and cash out with big bonuses once they layoff all the poor working people.