Culinary fires shot across Eldorado’s bow while Icahn rolls in dough

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noneAs part of the Eldorado Resorts acquisition of Caesars Entertainment announced this week, Eldorado anticipates “approximately $500 million of synergies in the first year following closing. Additionally, Eldorado sees long-term cost and revenue synergy upside opportunities.”

To which the union representing casino workers has responded: oh really?

“Yesterday, Eldorado announced cost-savings of $500 million in the first year of the combined company. Where are they going to cut?” asked D. Taylor, president of UNITE HERE, the parent union to Culinary 226.

“We will not stand by idly if the proposed Caesars-Eldorado transaction will lead to significant job losses, worse wages and benefits for our members, and lower state gaming tax receipts in the many communities where members we represent work and live,” Taylor said in a UNITE HERE statement.

UNITE HERE says it represents about 25,000 workers at Caesars and Eldorado properties. Contracts are scheduled to expire at a half dozen of those properties next year.

“In 2018, 7,700 UNITE HERE members went on a multi-city strike at Marriott hotels across the United States and won historic settlements in Boston, Detroit, San Francisco, San Jose, Oakland, San Diego, and Hawaii,” Taylor added, in case Eldorado was wondering.

Meanwhile, Taylor wasn’t the only person with a deep interest in the deal to issue a statement.

The Eldorado-Caesars deal was pushed by Carl Icahn, who has been pressuring Caesars to sell itself to enrich shareholders. Icahn’s penchant for acquiring huge stakes in companies and forcing them to reward himself and other shareholders through stock buybacks, mergers, and sales has earned him the description “activist investor.”

“While I criticized the Caesars Board when I took a major position several months ago, I would now like to do something that I rarely do, which is to praise a board of directors for acting responsibly and decisively in negotiating and approving this transformational transaction,” Icahn said on his website Monday.

And having conquered Caesars, Icahn is looking ahead.

“Unfortunately, there are far too many boards that unlike Caesars, believe corporations are more like feudal systems, than democracies; that stockholders are the peasants who represent a necessary evil that must be tolerated, possibly patronized, but certainly ignored,” Icahn said. “Much like the feudal barons, they hire mercenaries (lawyers and investment bankers) to deal with these peasants (stockholders), if they become too unruly.”

“The recent Occidental Petroleum fiasco,” Icahn continued, “is a great example of how…” well, you get the idea. Icahn is currently suing Occidental over the company’s bid to purchase another oil company, Anadarko. Icahn, who holds $1.5 billion in Oxy shares, thinks Oxy’s shareholders would be better rewarded if Occidental was sold to someone else.

Icahn has muscled around some of the world’s largest and most powerful corporations, including Apple. Icahn pressured Apple into billions of dollars of stock buybacks, which helped drive up Apple’s price. When he sold, he said he netted about $2 billion from investing in Apple for 32 months.

The Caesars deal was arguably even more impressive for Icahn, who started taking a huge stake in the company in December. According to one estimate, a mere six months later, the Eldorado-Caesars deal will net Icahn nearly a half billion dollars.

Hugh Jackson
Editor | Hugh Jackson has been writing about Nevada policy and politics for more than 20 years. He was editor of the Las Vegas Business Press, senior editor at the Las Vegas CityLife weekly newspaper, daily political commentator on the Las Vegas NBC affiliate, and wrote the then-groundbreaking Las Vegas Gleaner, which among other things was the only independent political blog from Nevada that was credentialed at the 2008 Democratic National Convention. He spent a few years as a senior energy and environmental policy analyst for Public Citizen, and has occasionally worked as a consultant on mining, taxation, education and other issues for Nevada labor and public interest organizations. His freelance work has been published in outlets ranging from the Guardian to Desert Companion to In These Times to the Oil & Gas Journal. For several years he also taught U.S. History courses at UNLV. Prior to moving to Las Vegas, he was a reporter and then assistant managing editor at the Casper Star-Tribune, Wyoming’s largest newspaper.

1 COMMENT

  1. Years ago I was in Japan and there was a robot servicing a pachinko parlor- it cleaned the glass, refilled balls and emptied ashtrays. Rooms can be designed for easy maintenance, more food courts (automats anyone?) self cleaning bathrooms are out there now. Cars can be parked automatically in high tech garages. Time to get rid of the employee I guess-

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