Business

Caesars’ Bet on Better Days Led to Bankruptcy for Division

Published

10 years ago

January 14, 2015

In this Monday, Jan. 12, 2015 photo, a man takes pictures of Caesars Palace hotel and casino, in Las Vegas. The company said Friday, Jan. 9, it has a majority of the holders of its debt on board with a pre-planned bankruptcy agreement that would reorganize Caesars Entertainment Operating Corp. into two separate companies, one to own casino-hotels and the other to lease them, and cut its existing debt by about $10 billion. (AP Photo/John Locher)

KIMBERLY PIERCEALL, Associated Press

LAS VEGAS (AP) — Financial problems plaguing Caesars Entertainment and its casino empire have the company considering a trip to bankruptcy court, possibly as early as Thursday.

It doesn’t necessarily signal the end of this faux Roman Empire, though.

If all goes according to the company’s plan, drawn up with its most senior creditors, it should be business as usual for customers — its doors will remain open, the slot machines will still sing, chips will rest atop tables.

“Caesars is, in a certain sense, a Nevada version of ‘too big to fail,'” said Michael Green, a history professor with the University of Nevada, Las Vegas.

It’s still a gamble.

U.S. casino-hotel companies are dependent on extra cash in a person’s pocket, but perhaps none more than Caesars, which waded into the recent economic downturn already burdened by more debt than any of them — a by-product of a buyout in January 2008 that was largely a wager using other people’s money.

While competitors found fortune in Asia’s casino growth as stateside gambling in Las Vegas and Atlantic City waned, Caesars missed out. And as other companies built arenas and shopping districts on the Strip or casino-hotels in newer gambling markets across the country, analysts say Caesars was reluctant to spend.

It went private, then public again to raise cash and created new related companies, shifting its properties from one to another to free them up from the debt cordoned off in one spot, its Caesars Entertainment Operating Co. That’s the company now headed to bankruptcy court.

Regardless of the maneuvers, “the fundamentals were not there to support the amount of debt that they had,” said Keith Foley, an analyst with Moody’s Investors Service.

WHAT HAPPENED

Apollo Global Management LLC and TPG Capital LP did what a lot of private equity firms were doing at the time when money and loans were easy to come by, buying companies with promise — relying mostly on debt — to add to its portfolio. The gambling industry looked promising.

The deal to buy Caesars (then known as Harrah’s) was first announced in 2006 during the heyday of Vegas tourism and development. But the deal didn’t close until January 2008, several months before Lehman Brothers would go bankrupt, shaking the economy to its core. And it was a nearly $30 billion deal with the two firms taking on more than $10 billion of existing debt and relying on several billion more in bonds to pay for the company.

In between, the company had cut about 200 people from its corporate staff. Before the year was done, Caesars was cutting more staff and looking for new cash to make its interest payments.

WHAT NOW

Among its casino peers, Caesars’ empire remains the largest, employing some 68,000 people worldwide at more than 50 casino-hotels, including Caesars Palace on the Las Vegas Strip.

While Caesars Entertainment has seen a steady $8.6 billion or so in revenue since 2009, it’s been outpaced by Las Vegas Sands Corp., which went all-in in Macau, China, and grew every year to post revenue of $14.5 billion in 2013.

Las Vegas Sands made a $2.3 billion profit that year. Caesars lost $2.9 billion.

Caesars has lost money each year for the last five years.

Still, the company unveiled its High Roller observation wheel and newly renovated hotels on the Strip: The Linq and The Cromwell. It hired headliners for shows at The Colosseum inside Caesars Palace.

All the while, it was shifting and shuttering other assets.

Last year, the company closed properties in Atlantic City, London and Mississippi and said it would cut its global workforce by less than 1 percent.

“They’re going to have to become a little leaner,” said Chris Jones, an analyst for Union Gaming Group. He added that he doesn’t expect any more properties to shut down and expects the plan will free up Caesars to reinvest where it hasn’t, including the gambling floor.

WHAT’S NEXT

The company faces irked creditors, a few who have tried to force the casino giant into bankruptcy against its will this week. Others have sued, claiming the company ransacked Caesars Entertainment Operating Co. of most of its valuable assets. Caesars called the claims meritless and alleges some of its holdout creditors are hoping for the company’s demise in order to win wagers predicting as much.

Despite the acrimony, the company says that after months of negotiations it has more than 60 percent of the holders of its first-priority debt on board with its plan.

The plan would shed $10 billion in debt from its weighed-down operations division, leaving it with $8.6 billion and winnowing its annual $1.7 billion in interest payments to $450 million. Senior creditors who OK’d the plan would get cash and new debt to make them whole.

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Pamela Price Appoints Deputy D.A. Jennifer Kassan as New Director of Community Support Bureau

On Monday, District Attorney Pamela Price announced Deputy District Attorney Jennifer Kassan as the new director of the Community Support Bureau. Kassan has over 25 years of experience as an attorney and advisor for mission-driven enterprises including benefit corporations, low-profit limited liability companies, nonprofits, cooperatives, hybrid organizations, investment funds, and purpose trusts.

Published

13 hours ago

November 4, 2024

Oakland Post

Alameda County Deputy District Attorney Jennifer Kassan. Courtesy photo.

Special to The Post

On Monday, District Attorney Pamela Price announced Deputy District Attorney Jennifer Kassan as the new director of the Community Support Bureau.

Kassan has over 25 years of experience as an attorney and advisor for mission-driven enterprises including benefit corporations, low-profit limited liability companies, nonprofits, cooperatives, hybrid organizations, investment funds, and purpose trusts.

Working in the DA’s new administration since 2023, Kassan was most recently assigned to the Organized Retail Theft Prosecution team.

Kassan has a master’s degree in City Planning from the University of California, Berkeley. She received a National Science Foundation Fellowship from Yale Law School, and graduated from Yale Law School in 1995. She earned her B.A. in Psychology with a minor emphasis in Ethnic Studies from UC Berkeley.

Kassan’s education, extensive legal background, list of notable accomplishments and impressive resume includes helping to found and lead multiple organizations to support community wealth building including:

Community Ventures, a nonprofit organization that promotes locally-based community economic development,
the Sustainable Economies Law Center, a nonprofit that provides legal information, training, and representation to support sustainable economies
the Force for Good Fund, a nonprofit impact investment fund
Crowdfund Main Street, a licensed portal for regulation crowdfunding
Opportunity Main Street, a place-based ecosystem building organization that supports under-represented entrepreneurs and provides education about community-based investing.

In addition, Kassan served as an elected member of the City Council of Fremont, California from 2018 to 2024, and on the Securities and Exchange Commission Advisory Committee on Small and Emerging Companies.

In 2020 she was named to the list of World-Changing Women in Conscious Business by SOCAP Global.

“We are excited to see Jenny accept the role as the new leader for the Community Support Bureau,” said Price. “She brings a wealth of talent, experience, and a vision to expand our office’s engagement with community groups and residents, that will level-up our

outreach programs and partnerships with local organizations with the aim of promoting crime prevention.

“We thank Interim CSB Director Esther Lemus, who is now assigned to our office’s

Restitution Unit, for her hard work and a great job fostering positive relationships between the DAO and the community.”

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Business

Sacramento Kings and Black-Owned Digital License Plate Firm Enter History-Making Partnership

Reviver founder and Chief Strategy Officer Neville Boston attended the Sacramento Kings’ season opener at Golden 1 Center, witnessing players debut the company’s patch. Reviver proudly supports the Sacramento Kings’ community and diversity, equity, and inclusion initiatives. Photo by Antonio Ray Harvey, California Black Media (CBM).

Published

14 hours ago

November 4, 2024

Oakland Post

Reviver founder and Chief Strategy Officer Neville Boston attended the Sacramento Kings' season opener at Golden 1 Center, witnessing players debut the company's patch. Reviver proudly supports the Sacramento Kings' community and diversity, equity, and inclusion initiatives. Photo by Antonio Ray Harvey, California Black Media (CBM).

By Antonio Ray Harvey, California Black Media

Reviver, the world’s first digital license plate and connected vehicle platform, has entered into a history-making jersey patch partnership with the Sacramento Kings, team officials announced right before the team’s season opener on Oct. 24.

The collaboration establishes Reviver as the first Black-founded technology jersey patch partner in the National Basketball Association (NBA).

The Reviver logo now appears on the left front strap of Kings’ uniforms.

Reviver founder and Chief Strategy Officer Neville Boston was in attendance to see the company’s patch worn by the Kings, during a game with the Minnesota Timberwolves at Golden 1 Center in downtown Sacramento.

“It was an absolutely amazing night. More than I ever expected,” Boston told California Black Media (CBM). “The Sacramento Kings have been incredible. On a national, and maybe a worldwide level, this partnership raises the profile of Reviver with the assistance of (Kings chairman and CEO) Vivek Ranadivé and the Kings.”

According to the Kings’ brass, Reviver, supported by the Black Star Fund, a Black-led venture capital firm based in Sacramento, is now an official “innovation partner” of the Kings and Golden 1 Center; a presenting partner of “Capitalize Technology,” a King’s corporate social investment initiative; and the exclusive digital license plate of the Sacramento Kings.

Headquartered in Granite Bay, a suburb of Sacramento, Reviver was born from a vision to modernize and streamline the vehicle registration renewal process. On Jan. 1, 2023, the state of California joined Georgia, Colorado, Michigan, and Arizona as states that have approved digital license plates for use statewide, after Reviver completed a four-year pilot program that evaluated a replacement for metal plates.

About 10,000 California drivers bought digital plates during the pilot program. Vehicles registered with the state are eligible to adopt the new high-tech tags. Reviver existence was made possible when Gov. Gavin Newsom signed Assembly Bill (AB) 984 in September 2022.

Under that law, California vehicle owners can update their titles, registrations, and other records remotely. In addition, the digital license “RPlate” includes a flashing message if a vehicle is reported stolen or if there is an Amber Alert.

Ranadivé is spreading the news that Reviver has international potential.

“This jersey patch partnership with Reviver continues the Kings long tradition of using our global platform to promote innovation and technology,” Ranadivé stated. “It’s particularly exciting to showcase a homegrown company that was part of our Kings Capitalize program. This is just the beginning of our work together, and we look forward to helping Reviver in its mission to modernize the driving experience.”

The commercial use of patches in professional basketball all began in 2009 when the Women’s Basketball Association (WNBA) Phoenix Mercury removed its name to replace it with sponsor, LifeLock, an identity-theft protection company. The landmark deal netted a contract worth about $1 million annually.

Kindra Montgomery-Block, vice president of diversity, equity, and social impact for the Sacramento Kings, was the integral facilitator who assisted Boston and his team in connecting with the sports franchise that is boasting 40 years in the Capital City.

“This partnership between the Kings and Reviver, backed by the Black Star Fund, will invest in the Sacramento community to promote technology and innovation in the region,” Montgomery-Block stated. “Reviver will support the Sacramento Kings community and diversity, equity, and inclusion initiatives.”

Editor’s Note: Neville Boston is a California Black Media board member.

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Activism

NAACP California-Hawaii State Convention Highlights Black Voter Engagement, and More

A Friday panel featuring NAACP Chairman Leon W. Russell and Regina Wilson, Executive Director of California Black Media, examined Project 2025, an initiative perceived as a potential threat to civil rights, healthcare access, and environmental protection. This session emphasized Project 2025’s projected impact on Black communities, noting that policies within the initiative could diminish gains in civil and environmental rights over decades. Russell and Wilson highlighted the need for vigilant monitoring and community mobilization to address these challenges.

Published

22 hours ago

November 4, 2024

Oakland Post

NAACP State Conference President Rick Callender (right) engages in a discussion on voter engagement and community advocacy with NAACP President and CEO Derrick Johnson during the 37th NAACP California-Hawaii State Convention in Los Angeles. Photo by Rich Woods.

By Bo Tefu, California Black Media

The 37th NAACP California-Hawaii State Convention concluded on Sunday, Oct 27, following four days of discussions and workshops at the Los Angeles Airport Marriott. Bringing together civil rights leaders, policymakers, and advocates from California and Hawaii, the convention operated under the theme “All In.” The participants discussed critical issues impacting Black communities, including criminal justice reform, health equity, economic empowerment, education, environmental justice, and voting rights.

On Saturday, the President’s Fireside Chat brought together NAACP President Derrick Johnson and CA/HI State Conference President Rick Callender, who discussed the urgency of voter engagement and community advocacy.

Guest speakers included Congresswoman Maxine Waters (D-CA-43), who spoke at the Women in NAACP (WIN) Labor Luncheon about the intersection of labor rights and civil rights. California State Superintendent Tony Thurmond delivered remarks at the Leadership Dinner on education equity, focusing on policies to ensure all students have access to high-quality education.

Honors were given to longtime social justice advocate and former Assemblymember Mike Davis for his work in community activism. At the same time, actor and activist Danny Glover and the Rev. Dr. Amos C. Brown received the 2024 Legacy Hall of Fame Awards, recognizing their lifelong commitments to advancing civil rights.

The convention also offered practical workshops, including “What’s On Your Ballot?,” where coalition leaders provided analyses of California propositions, explaining their potential impacts on community rights and resources. The Voter Turnout Workshop provided background and encouraged participants to promote voter turnout through community-centered outreach strategies.

Sunday’s events closed with a Prayer and Memorial Breakfast honoring the contributions of past and current civil rights leaders.