NEW PPE BOSS EXPECTS NO BIG CHANGES

Tuesday, October 24, 2000

By DAVE BERNS and JEFF SIMPSON
lasvegas.com GAMING WIRE

   LAS VEGAS - Park Place Entertainment has appointed top Hilton 
Hotels executive Thomas Gallagher to replace Arthur Goldberg as the 
company's president and chief executive officer.
   Goldberg died early Thursday from complications from bone marrow 
failure, prompting Monday's announcement of Gallagher's selection.
   The 55-year-old Harvard Law School graduate had served as Hilton 
Hotels' executive vice president chief administrative officer and 
general counsel since 1997, and helped oversee Park Place's late-1998 
spinoff from the company.
   "It's bittersweet because I knew Arthur well," Gallagher said of 
his appointment. "I respected him. Nobody wants to come in to an 
opportunity where it arises in tragic circumstances."
   Word had circulated for about 18 months that a gaunt-looking 
Goldberg was ill with leukemia or hepatitis and was undergoing 
regular blood transfusions, a claim Goldberg and Park Place 
executives had declined to discuss.
   He was hospitalized for a month in spring 1999 with what was then 
characterized as an upper respiratory infection, but Gallagher said 
the 58-year-old Goldberg, a workout fanatic, had seemingly recovered 
from that stay.
   Gallagher said he was surprised to learn of Goldberg's death, 
leading to a Thursday Park Place board meeting in New York at the 
Waldorf Astoria, where the company's 11-member board quickly chose 
Gallagher for the company's top spot.
   The former president and chief executive officer of The Griffin 
Group Inc. said he didn't sit in on the meeting, although he was 
nearby, and was not expecting to be chosen for the position.
   Some observers believed the job might go to Park Place Executive 
Vice President Wally Barr or general counsel Clive Cummis; both were 
close advisers of Goldberg.
    A source familiar with the selection process said that Gallagher 
was the only person seriously considered for the post.
   "The board was very concerned that there not be a loss of momentum, 
not be uncertainty," Gallagher said. "The rumor was that the company 
was in play so they moved with real decisiveness."
   The source characterized Gallagher as a team builder who will reach 
out to employees, the investment community and news media via a style 
that was different from Goldberg's secretive approach.
   "Arthur was not a guy who shared the sandbox very well," the source said.
   Longtime entertainer and hotel operator Merv Griffin characterized 
his company's one-time president as a "brilliant" man who 
choreographed The Griffin Group's successful 1988 battle with Donald 
Trump for control of Resorts International in Atlantic City.
   "I never use the word 'genius' lightly because it's reserved for 
very few," Griffin said, "but the man is a genius. It's amazing how 
he absorbed everything. I've never seen a man devour a casino in all 
of its ramifications. He became a great operator."
    Some observers speculated Monday that the selection came at the 
urging of Hilton Hotels President and Chief Executive Officer Stephen 
Bollenbach, who is also chairman of Park Place Entertainment and has 
worked closely with Gallagher since 1997.
    "Looks like Bollenbach is giving the company more of a Hilton look 
than a Park Place look," said Shannon Bybee, executive director of 
the International Gaming Institute at the University of Nevada, Las 
Vegas. "This is definitely a Hilton guy, not a Park Place guy."
   When Goldberg took control of Hilton's casino operation in 1996 he 
replaced many Hilton employees with Bally people, Bybee said, 
referring to the casino company previously headed by Goldberg.
   The new Park Place boss downplayed Bollenbach's influence over his 
selection, saying he was chosen for his own merits.
   "I've been in business for over 30 years," he said. "I had a career 
before Hilton. I'll have a career after Hilton. That is the furthest 
thing imaginable."
   Bollenbach was unavailable for comment Monday.
   Gallagher said he anticipates no major changes for Park Place, 
which Goldberg directed into becoming the world's largest casino 
company with holdings that include Caesars Palace, Bally's Las Vegas, 
the Flamingo and Paris, as well as properties in Atlantic City, the 
Mississippi Gulf Coast and the Midwest. The company has a deal to 
sell the Las Vegas Hilton to Los Angeles real estate investor Ed 
Roski Jr.
   The new Park Place boss said he expects to retain the company's top 
management team, as well as mid-level managers and front-line workers.
   "I just don't see that there's going to be any significant change," 
Gallagher said. "We're not going to do anything radical."
   Wall Street financial analysts spoke positively Monday about 
Gallagher's choice.
   "Park Place needs an individual skilled at harvesting and growing 
the cash flow generated by its many properties," said Robertson 
Stephens gaming analyst Harry Curtis. "Arthur's skill was identifying 
undervalued assets and acquiring them.
   "The strategic direction of Park Place has been to take the assets, 
maximize the cash flow and accumulate capital. That will continue 
with Gallagher."
   Park Place shares were up 13 cents Monday to close at $12.94 on the 
New York Stock Exchange. Shares of Hilton Hotels were up 13 cents to 
close at $9.50.
 
 

-- 
Dave Berns
Editor/Writer
lasvegas.com Gaming Wire
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