IS IT IN THE CARDS?
Key Casino Gambling Figures
Now Head Up Firm Gobbling Up North Florida Beach Condos!
THE CORPORATE SHUFFLE OF HARRAH'S TOP EXECUTIVES DOING THE SHIFT TO GAYLORD ENTERTAINMENT, Inc.
SPIN-OFF, RESORT QUEST INTERNATIONAL, A NEW FLORIDA CORPORATION HAS QUIETLY MERGED WITH ABBOTT REALTY of DESTIN, FLORIDA, NOW CONTROLS THOUSANDS OF NEW PANAMA CITY BEACH AND PANHANDLE CONDOS...
By: John Caylor - Insider Editor
Take a look at $20 Million spent to study a proposed new Panama City airport, which has had no interest shown by distribution, shipping and receiving centers or any industrial-manufacturing concerns. An airport of this proposed magnitude would necessitate heavy industrial support and could not survive as a passenger terminal. Then look at the newly paved Florida Panhandle 4-lane highways, new high rise bay bridges, millions spent on new beach water lines. Billions in taxpayer dollars providing new infrastructure and getting ready for what?
Is it the anticipated sale of thousands of new wall to wall high-rise, million-dollar condos, obstructing views of beautiful beaches and creating valleys of darkness. Hell No, it has to be stronger than death a force so compulsive the Devil himself couldn't stop it!
That force is about to take foothold in Florida with the passage of Amendment 4 on next Tuesday's Primary ballot. Since 1978 Florida voters have rejected state-wide casino gambling three times. But, according to the latest polls the measure to allow slot machines at existing dog and horse tracks and jai alai frontons in Miami-Dade and Broward counties will be overwhelmingly approved by South Florida voters. If North Florida voters don't stop Amendment 4, Florida will probably race down the road to join Mississippi, Nevada, Louisiana and others states that have fallen prey to money lauders and organized crime associates.
If the voters of South Florida agree in subsequent elections, slots could spread like wildfire and the big hitch is that the legislation does not require that gambling revenue be taxed! But, if and when the legislature does tax it the money would be earmarked for education... Hell of a deal for gambling firms!
Now close your eyes and look at the new Florida Panhandle rising all around you and grab your wallet before Jeb Bush, Alan Bense, Charlie Hilton, The St. Joe Company and the National Republican Party take your shirt! A Panhandle Victory is a live or die situation for Amendment 4 and the Crooks that have quietly planned to steal your future, devalue your homes and flood the streets with crime. Let's hope some of the states Democratic Party heavy-weights step in for a slugging match!
After an extensive investigation the Insider has learned these shattering facts... Abbott Realty of Destin, Florida which manages several thousand area condominium units including Panama City Beach's Edgewater Beach, Gulf Crest and others has been merged into Resort Quest International, Inc. A company whose top CEO's and executives Colin V. Reed and Mike Rose are legendary for their management of national casino gambling operations.
Insider Magazine interviewed Resort Quest Communications director Greg Rossiter, October 26th, regarding Reed's past connections to Harrah's and other national casino operations. We quizzed Rossiter at length and he confirmed indeed that Reed is the same Colin V. Reed of Harrah's.
Rossiter was vague regarding our questions concerning casino gambling plans by Resort Quest and Gaylord Entertainment and flatly denied that the company had any interests in casino gambling. But, Rossiter also didn't know that Resort Quest was registered with the Nevada Secretary of State to do business in Nevada.
When asked to rule out any attempt at casino gambling ventures in the Florida Panhandle, Rossiter replied that "he couldn't predict his companies future".
The Insider has assembled the following documents and news clippings to enlighten our readers on this issue...
Colin Reed, a key member of Harrah's Entertainment's three-headed office of the president, has resigned as the company's chief financial officer to assume the top spot at Gaylord Entertainment, a Nashville, Tenn.-based company that owns the Grand Ole Opry, as well as radio and TV interests.
Tuesday, April 24, 2001
Las Vegas Gaming Wire
The move announced Monday afternoon had been in the works for about two months and returns Reed to Tennessee, which he left last year when Harrah's moved its corporate offices to Las Vegas from Memphis.
Reed, who could not be reached for comment late Monday afternoon, will be reunited with Gaylord's new chairman, Michael Rose, with whom he worked at Holiday Inns Inc. in the late 1980s. At the time, Reed served as special assistant to Rose, who was the company's chairman.
Harrah's was later spun off into a separate company and Reed became a board member, as well as its top money man.
During the past year, Reed joined with Harrah's Chairman and Chief Executive Officer Phil Satre and Gary Loveman, the company's chief operating officer, to navigate through the challenges posed by the bankruptcies of Harrah's New Orleans and National Airlines, and the financial travails of the Rio.
"Colin's departure is bittersweet for the company and for me personally," Satre said in a statement. "At the same time, I recognize that the leadership role at Gaylord is a very exciting opportunity and one that suits Colin well."
The "trio," as they are known by company observers, recently helped craft a compromise in the Louisiana Legislature that cut by half the yearly tax bill for the struggling New Orleans casinos.
Meanwhile, National Airlines, which Harrah's Entertainment helped found during Reed's tenure, continues to seek investors to help it out of Chapter 11 bankruptcy protection.
The gaming company with 21 casinos in the United States, has a slightly less than 50 percent interest in both the New Orleans casino and the airlines.
Just last week, Harrah's announced that its struggling Rio had reversed a trend that saw cash flow plummet last year, as gamblers won a higher-than-expected amount of money from the casino's table games.
"It's hard to decouple his contributions from the other members of management," Brian Egger, a Credit Suisse First Boston casino industry analyst, said of Reed's role in the company's ruling triumvirate. "That three-person (team) had some challenges last year and has had a good measure of success this year."
Chuck Atwood, Harrah's vice president and treasurer, was promoted to the positions of senior vice president and chief financial officer in response to Reed's departure.
Loveman was appointed to the new position of company president and will continue to serve as COO
Thursday, July 19, 2001
Copyright © Las Vegas Review-Journal
Observers say sell-off sends poor message to investorsBy DAVE BERNS
Top Harrah's Entertainment executives and board members sold a portion of their holdings in the company during the weeks leading to a July 5 announcement that Harrah's second-quarter earnings would not be as strong as Wall Street analysts expected.
While not illegal, observers say the stock sales sent a poor message to investors, especially when juxtaposed against the lower-than-expected earnings.
"Certainly there is a perception there's something fundamentally wrong with the company if the insiders relinquish their stock," said Jenice Malecki, a New York City-based securities lawyer.
"You could say that individuals had some private matter requiring funding, but when you see groups of insiders relinquishing their stock you have to say, 'What's going on?' "
Ten of the company's top executives and board members sold 734,577 shares between April 27 and June 8, according to filings tabulated by Lancer Analytics, a watchdog of insider trading. Harrah's had 117.2 million shares outstanding as of March 31.
The company's departing chief financial officer, Colin Reed, exercised options for 471,188 shares of Harrah's stock and sold them for $16.18 million in late April. He left the company to become president and chief executive officer of Nashville, Tenn.-based Gaylord Entertainment.
The sale was not unusual for a departing corporate executive, stock market observers said. But the sale of 263,389 Harrah's shares by nine remaining executives and board members was out of the ordinary, especially for Harrah's, which had just two insider trades last year of 31,811 shares, according to Lancer Analytics records.
The stock's 52-week high of $38.29 was recorded on June 13; its low of $21.63 was recorded a year ago today.
"I would say the insiders at this company are pretty active sellers, at least recently," said Lon Gerber, Lancer's research director.
Key reasons for insider selling include profit taking, portfolio diversification and a need for cash.
Harrah's Entertainment spokesman Gary Thompson said his company has strict guidelines mandating when corporate insiders can sell their shares.
None of the sales violated the policy, Thompson said, although he declined to explain the policy's details.
"It's part of their compensation," Thompson noted of the sales. "In Colin's case, he was leaving, and he had to exercise his options."
None of the remaining executives and board members who sold shares last quarter agreed to discuss the sales. Instead, the company's lawyers issued a Wednesday statement.
"We are completely satisfied that all trades are in compliance with applicable laws and the company policy," the statement read.
In their July 5 announcement, Harrah's executives warned that the company's second-quarter earnings would be 46 to 50 cents a share and not the 55 cents projected by 17 Wall Street analysts because of troubles with the national economy and the Rio.
Harrah's shares rose 17 cents Wednesday to close at $29.96 on the New York Stock Exchange after the company reported second-quarter earnings of 49 cents a share, up from 40 cents a year ago.
During the 5 1/2-week period between April 27 and June 8:
• Harrah's Chairman Phil Satre sold 101,144 shares for $3.57 million;
• President and Chief Operating Officer Gary Loveman sold 52,500 shares for $1.87 million;
• Senior Vice President of Communications and Government Affairs Jan Jones sold 17,310 shares for $645,317.
The final insider trade came on June 8 and saw Marilyn Winn, Harrah's senior vice president of Human Resources, make $1.49 million from the exercise of stock options and the sale of 40,127 shares of the company's stock.
Paul Elliott, an analyst for Thomson Financial/First Call, which owns Lancer Analytics, said it's unlikely that Harrah's executives were selling knowing that the second-quarter numbers would not meet analysts' estimates. Yet, the number of trades and their proximity to the July 5 announcement did raise his interest.
"This was definitely activity we would have looked at
long and hard," Elliott said. "It's unfortunate timing from a public
relations perspective, but fortunate timing from (a personal) perspective."
Securities and Exchange Commission Press Statement filed 8/11/2000
August 11, 2000
MEMPHIS, TN -- ResortQuest International, Inc. (NYSE:RZT), the first brand name and ``real-time'' online booking service (resortquest.com) in vacation condominium and home rentals, sales and property management services, yesterday announced that Colin V. Reed, chief financial officer and a member of the three-executive Office of the President of Harrah's Entertainment, Inc. (NYSE:HET), has been elected to ResortQuest's board of directors.
``Colin Reed's experience at Harrah's, with its focus on strong customer relations and customer loyalty initiatives like the award-winning Harrah's Total Reward program, will give us additional expert counsel in this important area of our business,'' said David L. Levine, ResortQuest chairman, president and CEO. ``We also will benefit from his substantial background in finance and development, as we continue to execute our strategies of internal growth, selective acquisitions and e-commerce.''
A native of Great Britain, Reed joined a predecessor company to Harrah's in 1977 as financial controller for its former Holiday Inn International Division, with accounting responsibility for hotel operations in the United Kingdom. In 1987, he moved to the company's corporate headquarters as executive assistant to the chairman. He held a series of increasingly important senior-level management positions, culminating in his promotion to executive vice president in 1995 and his appointment as chief financial officer in 1997.
``ResortQuest has founded and is successfully exploiting the last frontier in the lodging industry--vacation home rentals,'' said Reed. ``ResortQuest is in a unique position, given its size and competitive advantage, Internet inventory distribution and branding initiatives. The company has taken a commanding leadership position and has significant upside, considering its new hands-on management team.''
Prior to joining Harrah's, Reed held various financial and accounting positions with several British firms, including Crest Hotels.
Reed is a fellow in the British Association of Hotel Accountants and is a member of the boards of directors of National Airlines, JCC Holdings and Harrah's Entertainment, Inc.
ResortQuest International provides a one-stop resource for vacation home and condominium rentals in 42 premier resort destinations in North America. ResortQuest's total portfolio now comprises more than 18,000 vacation rental properties. ResortQuest is the first branded vacation rental, property management and real estate sales company to offer ``real-time'' online booking through resortquest.com.
ResortQuest's locations include Gulf Shores, Ala.; Scottsdale and Tucson, Ariz.; Palm Desert and Palm Springs, Calif.; Aspen, Breckenridge, Crested Butte, Dillon, Snowmass Village and Telluride, Colo.; Bethany Beach, Del.; Beaches of South Walton, Bonita Springs, Captiva Island, Destin, Ft. Myers, Ft. Myers Beach, Marco Island, Naples, Navarre Beach, Okaloosa Island/Ft. Walton Beach, Orlando, Pensacola, Sanibel Island and Vanderbilt Beach, Fla.; St. Simons Island, Ga.; Hawaii, Magi, Oahu, and Kauai, Hawaii; Sun Valley, Idaho; Nantucket, Mass.; Big Sky, Mont.; the Outer Banks of North Carolina; Lake Erie Islands, Ohio; Sunriver, Ore.; Hilton Head Island, S.C.; Deer Valley, Park City and The Canyons, Utah; and Whistler, British Columbia.
Wall Street Twist, November 2000 Interview with Reed - future concentrations on Slots and Consolidation...
TWST: Could you give us a brief overview and profile of Harrah’s Entertainment, Inc. (NYSE:HET)?
Mr. Reed: Harrah’s Entertainment was founded by a gentleman named Bill Harrah 60 years ago. It’s a business predominantly based in northern Nevada. That’s where the roots of the company are. Back in 1979, Bill Harrah died and Holiday Corporation acquired Harrah’s. Harrah’s has grown through a number of acquisitions and through the development of casinos back in the early 1990s. We now have 21 casinos. We are the most broadly distributed casino company in the United States of America. Holiday was sold back in two pieces in 1989 and 1991, to a British company. A new company was formed called Promus Corporation. Harrah’s effectively was spun off from Promus back in 1995. So it’s a very complex history.
TWST: What are the significant trends or developments that you could expect in your sector of the market in the near future?
Mr. Reed: I think how we see them may be different from how our competitors see them. As we see them, the first thing will be that technology will play an ever more important role in the way you retain customers, acquire customers, lower the cost of doing business through vehicles like the Internet and the ability to consolidate customers’ play. Customers in our industry tend to be exceedingly promiscuous. They move from one location to another location — simply because the value propositions casinos have put in place haven’t been strong enough to retain those customers. What we try to do by the use of technology and putting reward systems and reward programs in place is to consolidate their play, and technology will continue to play an ever more important role in the retention of those customers. Additionally, product innovation, particularly around the slot side and the merchandizing of slots, will play an important role. The other trend that we see is obviously the continuation of consolidation in the industry, the elimination of a lot of the redundancy within the industry as businesses consolidate, and we think that will be good from a profit perspective for the surviving businesses.
TWST: What is the greatest opportunity that lies in wait for you, and do you think there’s a chain of events that could lead you to exceed your own expectations?
Mr. Reed: I think that there are things that we’re doing that will really help this corporation move forward. First and foremost is the point that I made earlier — the consolidation of play of our customers. As we look at customer base, we get on average about $0.36 out of every dollar that our customers spend in casinos on an annualized basis. All the technology platform that we’re putting in place, the superior service levels that we put in place, and the industry leading marketing programs are fueling same-store sales growth right now. Bringing customers in their indigenous markets into the Harrah’s system, putting them into our unique tiered card system, rewarding them when they spend more of their annual budget with us, is having a profound effect on the same-store sales growth, and of course, same-store profitability. Just to give you the dynamics of this, we have today 19 million customers in our database, and if we increase that share of our customers’ annual spend by five points, moving it from 36% to 41%, that increases EBIDTA for our company by $100 million. This is EBIDTA that, because of the systems that we’ve put in place today, doesn’t require huge capital spending.
April 15, 2000 - Colin Reed Interview published in Las Vegas Review-Journal
Harrah's Entertainment also plans to add 450 rooms to its Atlantic City
hotel-casino, which Chief Financial Officer Colin Reed said
lacks enough space for guests at its 1,174-room hotel.
Last month, the company completed its $425 million acquisition of Player's International, giving Harrah's additional casinos in Louisiana and Illinois, as well as a suburban St. Louis riverboat.
"What we're trying to say through this call this morning," Reed noted, "is there are tremendous fits through the company's perspective. We have the capital resources to do the things that we aspire to do."
Harrah's had considered making a buyout offer for Mirage Resorts in late February and early March, sources said, but the company backed away when MGM Grand raised its offer for the company from $5.4 billion to $6.7 billion.
For the quarter, the Rio reported a hold percentage of 12.4 percent compared with the 20.5 percentage averaged during the past three years.
Company executives said the Rio's weak table results were not the product of financial wrongdoing or a major loss to any one gambler, but were simply the result of poor luck throughout the quarter, making it the second quarter in a row that the Rio generated weak table games results.
The trendy Flamingo Road hotel-casino, which was acquired last year by Harrah's, also reported a lower-than-average hold percentage for the fourth-quarter of 1999.
"Low hold is a part of doing business in this industry," Reed said.
Despite the dip in fortunes, Reed said the company will continue to pursue high-end gamblers who wager tens of thousands of dollars per hand at the city's gaming tables. But MGM Grand's recent deal to purchase Mirage Resorts could prompt the Rio to alter its strategy for marketing to high-end players.
The $6.7 billion buyout, which awaits regulatory approval, would give MGM Grand as much as estimated 50 percent of the city's high-end casino market, a market in which casino operators give big-time gamblers as much as $100,000 for simply walking through their doors, while refunding as much as 15 percent of a gambler's losses to entice return play.
Published February 14, 2000 - Las Vegas-Review
Tracking and keeping customers is key to a
casino's success, and Harrah's Entertainment claims to possess 18 million names
in its database.
That compares with the 21 million customers of America Online. The only difference, said Harrah's Chief Financial Officer Colin Reed, is that "we'd like their multiples."
One such multiple measures the relationship of a company's stock price to its cash flow.
Gaming companies generally trade at lower multiples than companies in other sectors because investors are wary of the ups and downs of casino companies. Internet companies generally trade at higher multiples, with exuberant investors driving the numbers.
Meanwhile, look for Strip casinos to continue to reduce or eliminate cash backs for slot club members. The reason? It seems gamblers are not putting that cash back into the machines, particularly big gamblers who are walking out the door with the money.
What's even more interesting is the reaction from customers -- there's hardly a complaint. Seems cash backs rate well behind free food and time spent on a machine.
|Gaylord Entertainment Official Website comments|
FOCUS ON MARKETS
MANAGEMENT: Colin Reed, president and chief executive; David Kloeppel, executive vice president and chief financial officer; Jay Sevigny, executive vice president and chief operating officer, Gaylord Hotels.
DIRECTORS: Michael Bender, executive vice president, Cardinal Health; Robert Bowen, retired partner, Arthur Andersen; E.K. Gaylord II; E. Gordon Gee, chancellor, Vanderbilt University; Laurence Geller; Ralph Horn; Reed; Michael Rose, chairman; Michael Roth.
RECENT PERFORMANCE: Gaylord took a hit in 2001 when sales fell from $514 million the previous year to $325 million, and it started selling assets unrelated to its hospitality business, because that's what companies do -- they either diversify or they focus on core assets.
Sales rose to $414 million in 2002 and $449 million last year, but profits haven't risen. Gaylord reported net income of $95 million in 2002 but less than $1 million last year, and so far this year, it has reported losses totaling $42 million. It is expected to report third-quarter earnings Nov. 4.
RECENT STOCK PERFORMANCE: The stock has done well over the past year, with a return of almost 20 percent, according to Bloomberg. The shares closed at $31.20 Friday.
ANALYSTS SAY: Four of the five analysts who cover the company rate it a buy; the other rates it a sell.
SOURCES: Bloomberg News, Yahoo Finance, Star-Telegram archives
Who they really are... SEC filings
V. Reed became president and chief executive officer
of Gaylord Entertainment in May 2001.
Mike D. Rose, CEO of Gaylord Entertainment
Mike Rose brought a tremendous track record in the hospitality industry
and a national reputation as a corporate director to Gaylord Entertainment
when he joined the company in April 2001.
Rose began his career as an attorney working with one of the largest franchises of Holiday Inns. He later joined Holiday Inns Inc. in Memphis, where he bought, sold, built and franchised hotels on a global basis. He became president in 1979, CEO in 1981 and chairman in 1984. Holiday Inns Inc. was renamed Holiday Corporation in 1985 to reflect the growth of the company’s brands, including Harrah’s, Embassy Suites, Crowne Plaza, Homewood Suites and Hampton Inn.
Upon the sale of the Holiday Inn brand in 1990, Promus Companies Inc. was formed with Rose as the chairman and CEO. In 1995, Harrah’s Entertainment Inc. and Promus Hotel Corporation were split into two publicly traded companies, with Rose as chairman of both. He retired from Harrah’s in 1996 and retired as chairman of Promus in 1997.
Among his current board memberships are Darden Restaurants, FelCor Lodging Trust, First Tennessee National Corp. and Stein Mart. Director’s Alert, a publication that covers corporate boardroom news, named Rose one of "Corporate America’s 10 outstanding directors for 2000", primarily because of his 15 years of service on General Mills’ Board.
Rose earned a bachelor’s degree in business from the University of Cincinnati and a law degree from Harvard Law School. He is active in community affairs, including serving on the Board of Visitors at the University of Memphis, the Athletic Board at Stanford University, the Board of Trustees for the Memphis University School and the Board of Trustees for St. Mary’s Episcopal School.