Caesars Entertainment Chief Marketing Officer David Norton, developer of Total Rewards, got his walking papers yesterday. The old “pursuing other interests” excuse was deployed; familiar industry code for “Don’t let the doorknob hit you on the way out.”
Publicly, CEO Gary Loveman uttered extravagant praise — as well he should, though he slightly misspoke. Without Norton, “Caesars would not be the company it is today,” he wrote. Not quite true. Minus Norton, it would not be the company that Loveman inherited from Phil Satre. It is Loveman who turned Caesars into the mess it is today. There’s no need to share the credit, Gary. You own that one — lock, stock options and barrel.
OK, maybe Norton just got tired or fed up and abruptly left. Liz Benston theorizes that a troubled upgrade of Total Rewards, incorporating third-party vendors, may have led to the ouster — or that Norton is being scapegoated for Caesars’ inability to draw higher-value (i.e., Chinese) players. Allow me to propose another scenario. For months upon months, Caesars’ regional properties have been performing softly. Out in Middle America, when Caesars butts heads with Ameristar Casinos or Penn National Gaming or Pinnacle Entertainment, it usually comes away the loser. As market share quietly erodes, the marketing is bound to come under scrutiny.
Not even firing Loveman (like that’s gonna happen) would help. On his watch, the Good Ship Caesars has become so waterlogged with debt that changing captains is just a rearrangement of the deck chairs on the R.M.S. Titanic.
Watching the phenomenal year-over-year growth of casino revenues in Macao, I find myself waiting for the other shoe to drop … which it did yesterday. Whenever the Macanese casino economy heats up, it’s only a matter of time before the government tries to cool it down, micromanaging the industry like the burners on a stove. The newest edict: “Casinos of 1,000 tables will be no more.” (They’re looking at you, Las Vegas Sands.) This isn’t great news for all those companies (including Sociedade de Jogos de Macau, MGM Resorts International and Wynn Resorts) that are still patiently waiting … waiting … waiting for their Cotai Strp™ building permits. (Or not so patiently waiting, in the case of MGM CEO Jim Murren.) Luckier are “home teams” Galaxy Entertainment and Melco Crown Entertainment, which got their new Cotai megaresorts open just as city hall started dropping the hammer.
Sheldon Adelson‘s lieutenants have been pinning their hopes on increased VIP/junket trade, which is suddenly in disfavor with the ruling elite. It wants to see less capacity but more mass-market play, odd goals to reconcile. This isn’t the first time one senses that the Chinese government, having unleashed an economic dragon, now has it by the tail and is desperately trying to improvise a means of getting the fire-breather back into its cave.
IMHO, Norton was one of the worst executives on the strip. Somehow he leveraged his reputaion and position several years ago when he bested Ginny Shanks in the consolidation of corporate marketing positions. What senior mgmt, in their zest to save a buck, didnt realize is that Norton had the creativity equal to watching paint dry and a personality that was even more vanilla. After summarily dismissing virtually all his direct reports over the past 3 years (it was always someone elses fault) Harrah’s (light bulb going off !!) finally realized where the real problem was. Good riddance Norton, better late than never.