"It's hard to pinpoint which one it is, but it's like the perfect storm — they all hit you at the same time." — Harrah's Entertainment Eastern Division President J. Carlos Tolosa.
Nothing against Mr. Tolosa but this is becoming the most overused phrase in business. Rub two or more vaguely coincidental economic factors together and, all of a sudden — it's "the perfect storm"! Eeek! Run for the cellar!
Seems we're hearing this wheeze a lot lately … to excuse the collapse of Columbia Sussex, for starters. In Tolosa's case, he's conflating Pennsylvania slot parlors, the recession and a largely ignored smoking ban. There won't be a true smoking ban until mid-October, the impact of the slot parlors should have been seen coming a long way off, and the recession … well, that sort of did take us by surprise. I'll give him that one.
But really, let's shelve "perfect storm" cliché until we have economic conditions that truly befit such cataclysmic terminology.
By the way … Harrah's recently reported diminished profitability in its Atlantic sector, citing the impact of Harrah's Chester: "The new casino and the partial opening of a new hotel tower at Harrah's in Atlantic City led to profit gains in the company's northeast region, though profit was lower than it might have been as revenue shifted from Atlantic City properties to Pennsylvania, where gaming is taxed at a higher rate, Harrah's Chief Executive Gary Loveman said Friday."
Ummmmm, you guys at Harrah's are supposed to be the math geniuses of the industry, right? The fellows who built an empire through number crunching par excellence? So didn't you run any, like, economic models on how going into eastern Pennsylvania might sap your Atlantic City market, where you're heavily exposed? Or that there were more cents to the dollar to be extracted from New Jersey, where the tax rate is but a modest fraction of Pennsylvania's? It just seems like you should have seen this Peter-robs-Paul scenario a good ways up the road, so to speak.
Hindsight being 20-20, Harrah's would surely have been better off putting all its marbles on Pittsburgh. Instead, it lurked behind a local stalking-horse group and put its primary effort into (literally) shoring up a racing oval in Chester.
Oh well, if Don Barden's finances continue to quiver like Jell-O, the Harrah's-Backed Group That Isn't Harrah's may get a do-over in Pittsburgh, where it looks more and more like the city fathers backed the wrong horse (and chose an awful site into the bargain).
