Gary Loveman, CEO of Caesars Entertainment, is to step down from the post, the troubled company announced this week.
He will be succeeded by Mark Frissora, the former CEO of rental car company Hertz, who will join the board immediately and take over the reins officially on July 1.
Loveman will continue to serve as company chairman.
Under Loveman’s stewardship, Caesars Entertainment, originally Harrahs, grew into the biggest casino operator in the world.
However, it assumed huge industry-high debt of $20 billion following the $30.1 billion takeover by private equity firms Apollo Global Management and TPG Capital, and struggled during the subsequent global economic downturn.
The company has lost money every year since 2009 and remains locked in a legal squabble with a group of its lower-level creditors as it attempts to restructure and put its main operating unit through Chapter 11 bankruptcy.
“My decision to begin to transition management now comes with the confidence that we have taken the steps necessary to ensure the company’s long-term success,” Loveman said. “I am proud of the company’s many accomplishments and grateful for the loyalty and friendship of my thousands of colleagues.”
Caesars Builds an Empire
After completing his doctorate at MIT, Loveman spent nine years as a professor at Harvard Business School, before joining Harrahs as a consultant, and then as COO in 1998.
As COO, Loveman created the Harrahs loyalty rewards program which allowed the company to build data on its customers and discover that slots players, and not high-rollers, were the most profitable demographic.
In 2003, he became CEO, and the following year, oversaw the acquisition of Caesars Entertainment, expanding Harrahs from a company that owned 15 casino properties to one that owned over 50.
“Caesars has accomplished more than what we could have imagined when I arrived,” said Loveman, who added that “the time is ripe for a transition,” as the company is “in the midst of a formal restructuring of one of its subsidiaries.”
“My decision to begin to transition management now comes with the confidence that we have taken the steps necessary to ensure the company’s long-term success,” he added.
So Good It Hertz
His successor, meanwhile, has experience in presiding over heavily indebted companies.
He joined Hertz in 2006 just after it, like Caesars, had assumed billions in debt following a private takeover, and oversaw a subsequent period of global expansion.
However, while Frissora cited personal reasons for leaving Hertz, Bloomberg has reported that investors pushed for his removal, citing accounting and operational mistakes.
“Mark has a long history of driving growth, optimizing operations and creating shareholder value,” said Marc Rowan, a co-founder of Apollo, and David Bonderman, a co-founder of TPG. We are confident that his efforts combined with the restructuring … will help create long-term shareholder value at Caesars.”