When he leaves in February, Mark Frissora will have been with Caesars Entertainment exactly 4 years.
Caesars Entertainment president and CEO Mark Frissora is stepping down, effective February 8, 2019. Frissora replaced Gary Loveman as Caesars CEO in 2015.
In his three-and-a-half years on the job, the former Hertz and Tenneco chief executive guided Caesars through a tough bankruptcy reorganization. Frissora leaves America’s largest domestic casino operator with a net income of $110 million in Q3 2018, after having a net loss over the same period in 2017.
Zacks Investment Research said Caesars has matched investor expectations in recent months, so Frissora’s departure does not appear to be performance-related. Thursday’s press release to announce the Mark Frissora departure said the executive would focus on stability in the 3-month transition period.
Frissora said in the release, “I’m very grateful to the entire team for their efforts and proud of what we’ve accomplished together and very optimistic about our company’s future.”
Jim Hunt on Frissora’s Departure
Jim Hunt, chairman of the Caesars’ board, said in a press release, “The board of directors thanks Mark for his instrumental role in leading the company through a challenging period and setting Caesars on a course for sustained, long-term growth and value creation.”
“Under Mark’s leadership, the company has significantly improved margins and profitability while simultaneously increasing customer and employee satisfaction. We are grateful for his leadership and numerous contributions and are optimistic for the future.”
About Mark Frissora
The 62-year old Frissora has served as an executive his entire career, previously working for General Electric and Philips Lighting Company before becoming Tenneco’s CEO in 2000. He left the Fortune 500 automotive company in 2006 to become the CEO of the Hertz Corporation. Frissora had an 8-year tenure at Hertz, stepping down from the car rental giant 5 months before his appointment as the head of Caesars.
Caesars Entertainment said a search firm would be enlisted to find a new chief executive officer. Mark Frissora’s success at the company lends credence to an outside hire.
Tilman Fertitta Proposes Merger
The Las Vegas Strip casino company does face an uncertain near-future. Caesars announced it had received a merger offer from Golden Nugget LLC, which is owned by Houston billionaire Tilman Fertitta. The merger would involve Caesars Entertainment acquiring Golden Nugget, but presumably would leave Fertitta as an influential minority owner of the combined company.
Tilman Fertitta founded Landry’s Restaurant in 1980 and has since built a massive nationwide restaurant corporation. Fertitta, who is a distant cousin of the Fertitta Brothers who own Station Casinos, is also the owner of the Houston Rockets. He bought Golden Nugget in 2005 and has built the casino company into a succesful entreprise.
Caesars Rejects Fertitta’s Offer
Fertitta’s proposal would have Caesars “acquire substantially all of Golden Nugget’s restaurant, hospitality, entertainment, and gaming businesses in exchange for a significant minority of Caesars’ common shares.”
Caesars Entertainment rejected the offer, but the board of directors said it “continues to be open to reasonable alternatives to enhance long-term shareholder value.”
After the recent earnings report, Caesars Entertainment closed trading up 9%. Over the course of 2018, Caesars stock is down 30%. This has been a troublesome year for Las Vegas Strip casino stocks, despite the strength of the economy.
Caesars CEO to Focus on Japan
The new chief executive will guide Caesars’ attempt to secure a Japanese casino license. Mark Frissora has visited Japan on several occasions to build relationships and scout potential locations for a casino.
Japan plans to hand out three casino licenses in the course of 2019. The application process begins early in the year. The most likely cities for the casinos are Tokyo, Osaka, and Yokohama, though some reports suggest that Chiba might replace Yokohama on the list.
2019 Japanese Casino Licensing
As the 3rd largest economy in the world, whichever casino operators win the Japanese casino licenses will have a major new revenue stream. Japan’s casino economy is expected to make between $10 billion to $40 billion a year, with $20 billion thought to be a likely amount, given certain restrictions the Japanese Diet placed on residential casino gambling.
Several top companies have indicated they would seek a license. Besides Caesars, American casino giants MGM Resorts and Las Vegas Sands have said they would apply. Galaxy Entertainment Group and Melco Resorts & Entertainment, two successful Chinese operators in Macau, also plan to submit applications.
On the domestic front, Caesars Entertainment announced this week it was signing a 15-year partnership deal with the Las Vegas Stadium. Beginning in 2020, the Las Vegas Stadium will be the home of the Raiders NFL franchise.
