Caesars CEO to depart; stock up Company lands brand on LV stadium entrance
Committee to seek Frissora’s successor; no timetable set
Caesars Entertainment Corp. CEO Mark Frissora will leave the company in February.
The announcement pushed stocks up more than 10 percent Thursday, and came minutes before the Las Vegas casino company reported strong third-quarter earnings.
Frissora will depart at the end of his contract, and a committee has been formed to find his successor.
During a conference call with investors Thursday afternoon, company executives said they didn’t know how long it would take for a committee and search firm to find Frissora’s replacement, but they plan to search internally and externally for a new leader.
Shares closed up 26 cents, 3 percent, to $8.85. After the Frissora departure was announced, after-hours trading climbed an additional 96 cents, 10.8 percent, to$9.81ashareon trading nearly twice the average volume.
Frissora, who took over as CEO from
Gary Loveman in June 2015, was accused in a Securities and Exchange Commission filing by his former company, Hertz Global Holdings, of “inappropriate accounting decisions and the failure to disclose information to an effective review” three weeks after he
FRISSORA
Caesars Entertainment Corp., the operator of Caesars Palace and eight other Las Vegas casino properties, has signed a 15-year agreement to be a founding partner of the $1.8 billion Las Vegas stadium.
Financial terms of the deal announced Thursday weren’t disclosed.
As a founding partner, Caesars will have a branded stadium entrance and dropoff zone, digital signage, and media, radio and print assets, with alumni, player and cheerleader appearances.
“We are honored to align with a company that shares the Raiders’ values of improving the local community and delivering exceptional customer service in creating this transformative
STADIUM
took over at Caesars.
Caesars management defended Frissora at the time, saying they were lucky to have him, and have since praised his guidance of the company through bankruptcy.
“The board of directors thanks Mark for his instrumental role in leading the company through a challenging period and setting Caesars on a course for sustained, long-term growth and value creation,” Jim Hunt, chairman of Caesars’ board of directors, said in a release. “Under Mark’s leadership, the company has significantly improved margins and profitability while simultaneously increasing customer and employee satisfaction. We are grateful for his leadership and numerous contributions and are optimistic for the future.”
Caesars surprised Wall Street analysts, swinging from a loss of $433 million, or $2.90 a share, a year ago to net income of $110 million, or 14 cents a share, on revenue of $2.185 billion.
Resort fees
During the conference call, analysts pressed executives about the potential effect paid parking and high resort fees have had on business.
Executive Vice President Eric Hession, the company’s chief financial officer, said the company believes Las Vegas compares favorably with competitive convention-centric cities.
“Las Vegas is still a great bargain regardless of whether you account for all the fees or how they’re added in,” Hession said.
Asked if fees were hurting the softer drive market from California, Hession said the company is studying it. Revenue
Change: +134.2% Net income/(loss) Earnings/(loss) per share
“We’re well aware from both the analysts’ and investors’ perspective and customer perspective that we need to watch and make sure we’re not inhibiting demand with the fees more so than we’re losing in terms of the ability to drive incremental profit,” Hession said.
The company conducted a “very large survey” of meeting planners and customers to get information on how to address the issue of fees.
Results
Earlier this year, Caesars had anticipated the third quarter wouldn’t be as strong as in 2017, when two high-profile boxing events were staged in Las Vegas.
This year’s third quarter took a hit because of one of Caesars’ top entertainment draws, singer Celine Dion, canceling 20 performances.
“We don’t anticipate to see anything like that in the future, but you never know because we have a lot of theaters, a lot of performances that are good and right now, we’re making sure we have a robust calendar,” Frissora said.
Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @Rickvelotta on Twitter.