The fall and rise of Gary Loveman

In a bankruptcy as enormous as that of Caesars Entertainment, you would expect its primary culprit to be held responsible — and this has happened, after a fashion. Gary Loveman is relinquishing his titles as president and CEO, but will remain chairman of the board. That means that as long as he’s Leon Black and David Bonderman‘s fair-haired boy, Loveman is in a position to call the shots … and he’s already indicated he intends to oversee the REIT conversion of Caesars Entertainment Operating Co. (aka “Bad Caesars”). He’s got the gavel and the backing of Caesars’ two biggest investors, so Loveman is effectively in charge.

Even as its current troubles deepen, the company’s selection of a successor, Mark Frissora, late of Hertz Global Holdings, may mean going from bad to worse. According to the Minneapolis Star-Tribune, “Hertz has been reviewing its financial reports for the past three years and restating results.” Caesars’ announcement “pointed to Frissora’s experience with complex and highly leveraged companies,” which is going to come in handy at debt-strapped Caesars. For his troubles, Frissora will earn $1.8 million a year, plus be eligible for $2.7 million in bonuses. That’s pocket change compared to the $7.6 million that Loveman earned for the havoc he wrought in 2013.

The Las Vegas Sun euphemistically referred to Loveman’s spend-happy tenure as a period of “explosive growth,” perhaps referring to the atom bomb of debt with which he lumbered the company. He took a Harrah’s Entertainment that was financially sound under Phil Satre and turned into a Caesars Entertainment that, in bankruptcy, owes more than did Enron.

Successor Frissora sounds poised to take up where Loveman left off. His tenure at Hertz was marked with an ineffectual takeover of Dollar Thrifty Automative Group that failed to increase market share. (Sound familiar?) Perhaps Caesars should have turned to Dollar’s former CEO, Scott Thompson, who took Frissora to the cleaners, selling at $87.50 a share after Frissora initially offered $2. Hertz “has said that it can no longer rely on its past three years of financial statements,” reports Bloomberg Business. (Small World Dept.: Frissora’s detractors included ubiquitous Carl Icahn.) That’s what Apollo Management and TPG Capital call “a long history of driving growth, optimizing operations and creating shareholder value.” Sounds like Frissora ought to fit right in at Caesars.

So why does the Loveman ‘resignation’ feel so anti-climactic? Perhaps because, when you look around, there has been only a slight rearrangement of the deck chairs aboard the Titanic.