|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
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
failure, prompting Monday's announcement of Gallagher's selection.
The 55-year-old Harvard Law School graduate had served
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
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
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
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
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
Vice President Wally Barr or general counsel Clive Cummis; both were
close advisers of Goldberg.
A source familiar with the selection process said
was the only person seriously considered for the post.
"The board was very concerned that there not be a loss
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
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
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
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
Bollenbach was unavailable for comment Monday.
Gallagher said he anticipates no major changes for Park
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
The new Park Place boss said he expects to retain the
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
Gallagher said. "We're not going to do anything radical."
Wall Street financial analysts spoke positively Monday
"Park Place needs an individual skilled at harvesting
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
maximize the cash flow and accumulate capital. That will continue
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.
lasvegas.com Gaming Wire
Phone: (702) 383-0478
Fax: (702) 380-4590