Vol. 7 • No. 10 • March 16, 2009, Cover Stories

Bye Bye Bill

The departure of William Weidner (left) from Las Vegas Sands after 13 years wasn’t a surprise to anyone who was paying attention to the turmoil within the company over the past year. While company Chairman Sheldon Adelson is clearly the “visionary” of the company, Weidner and his team were undoubtedly the engine that built and operated Adelson’s dream.

Weidner leaves Las Vegas Sands to an uncertain future

GAMING IMPACT STATEMENT
WHAT: Executive departure
WHERE: Las Vegas
WHY: After months of turmoil, Bill Weidner leaves Las Vegas Sands, leaving the company under the complete control of Chairman Sheldon Adelson.


The departure of William Weidner (left) from Las Vegas Sands after 13 years wasn’t a surprise to anyone who was paying attention to the turmoil within the company over the past year.

While company Chairman Sheldon Adelson is clearly the “visionary” of the company, Weidner and his team were undoubtedly the engine that built and operated Adelson’s dream.

When times were good Las Vegas Sands could do no wrong. The demolition of the fabled Sands Hotel on the Strip was a cultural loss, but the construction of the Sands Expo Center and later the Venetian validated his vision. During the flush times of the 1990s and mid-2000s, these properties drove the company ever forward.

The expansion in Macau was a bold stroke—and one that mixed intrigue and a certain understanding of the market. It was a surprise when LV Sands obtained one of the three licenses, via a sub-concession through the Galaxy Entertainment license (the other two were awarded to gaming magnate Stanley Ho and Wynn Resorts). Adelson bested better known gaming companies such as MGM Mirage, Caesars and Harrah’s. And when he unveiled his vision of the Cotai Strip—a dozen hotels, shopping malls and casinos, all owned and operated by Las Vegas Sands—it seemed that everything he touched turned to gold. And this was even before the company won one of the two concessions in Singapore. But again, it must be pointed out that Bill Weidner, Brad Stone and Rob Goldstein were the three legs of the stool upon which Adelson built his empire.

Prior to bringing on the trio, Adelson hired, chewed and spit out several company presidents. Steve Norton, one of the men who engineered the casino gaming drive in Atlantic City in the 1970s, lasted only a year. And Adelson drove gaming veteran Phil Bryan to a Buddhist monastery for several years after firing him. There were others, but none stuck around very long until Weidner and his team came on board.

The debt taken on by Las Vegas Sands to fund the Macau projects and the construction of the Palazzo, adjacent to the Venetian in Las Vegas, was immense. And it would have been no problem should revenues have remained high, interest rates remained low and financing remained available.

It all began to unravel at a trial last year over a suit brought by a Hong Kong businessman who claimed that he helped LV Sands obtain the Macau license and was not compensated as promised. Bizarre testimony by Adelson blamed illness and distraction, claiming Weidner never informed him of the man’s help or any promise of compensation.

At the Goldman Sachs investment conference at last November’s G2E, Weidner blistered Adelson with criticism of how he handled the company during this time of financial pressure. After peaking at $155 a share last year, the stock has tumbled to less than $2. Weidner told the Goldman Sachs invitees that Adelson rejected any suggestions that might have stemmed the tide in language that shocked them.

So it was with little solace that investors listened to Adelson in New York last week, assuring them that everything would be OK.

“Don’t think that we have one foot in the pail of bankruptcy and the other on a banana peel in the middle of a hurricane,” Adelson said. “That’s not the case.”

While the sale of the shopping malls in Macau owned by LVS might help, one cannot be fully convinced that an Adelson dictatorship will solve the problem.

With Weidner’s departure uncertainty about the roles of Brad Stone (who was recently promoted to president of global operations) and Venetian & Palazzo President Rob Goldstein will only add to the questions about LVS. And the appointment of a somewhat unknown entity, Michael A. Leven, as Weidner’s replacement will further confuse the market. Leven has been on the LVS board since 2004 and founded U.S. Franchise Systems Inc., which developed the Microtel Inns & Suites and Hawthorn Suites hotel brands. Most recently, Leven had been CEO of the Georgia Aquarium in Atlanta. Leven will take over as president and COO on April 1.

Joe Greff, a gaming analyst for JP Morgan, is concerned particularly about Stone.

“While we don't know, nor would we speculate about Stone's employment status, we do believe investors are appropriately concerned about Stone's continued employment given his significant contribution to Las Vegas Sands' efforts in Macau and more recently, in the construction of the Marina Bay Sands in Singapore, a key driver of the longer-term growth story for the company,” Greff wrote in a note to investors.

But it’s not over yet. While walking out the door, Weidner took one last shot at Adelson.

“Last year, with falling stock prices and worsening global economic conditions, disagreements and conflicts arose between me and the chairman, Sheldon Adelson,” Weidner told Bloomberg News. “He’s the CEO, he’s the majority owner, and just recently he’s insisted on having more control over the day-to-day operations, and I figured it was time for me to then move on.”

By Staff