Caesars: Total Rewards value is zilch

You and I might think that Total Rewards is Caesars Entertainment‘s prize asset — so much so that Chairman Gary Loveman built his reputation on it. However, in the current bankruptcy proceeding, Caesars is attributing no equity value to it. That’s one of several preposterously low valuations ($80 million for Horseshoe Baltimore? None for company trademarks?) that the company has put forward. Creditors assert that Total Rewards is worth over $1 billion and I don’t think Caesars should be insulted if I say they’re probably right. Who in the casino industry wouldn’t like to take a deep dive into that database?

The dissident creditors charge that Caesars’ sleight-of-hand asset transfers gave Loveman and company owners “virtually all of the attributes of ownership and control of Total Rewards” for not even a penny. CreditSights analyst Chris Snow said the transfer “just seems a little more beyond the pale.” Caesars could be required to put still more cash into bankrupt Caesars Entertainment Operating Co. if the bankruptcy court judge takes Snow’s view.

Caesars’ defense of its action is “The structure the Caesars companies established ensures that Total Rewards will have the resources it needs for maintenance and growth, that the program is available on fair terms to every Caesars-affiliated property … and that each of the Caesars companies makes a fair contribution to the expenses of the system.”

Meanwhile, according to The Associated Press, bankruptcy filings are revealing Caesars’ corporate structure to be more complex than a spiderweb: “hundreds of legal entities, at least one that has no assets and no liabilities and nearly all owing each other money.” Small wonder that Judge A. Benjamin Goldgar gave his examiner unlimited funds and time to get to the bottom of it all. “Not all bankruptcy cases have examiners appointed. That could change everything,” said University of Chicago professor of law Anthony Casey.

So labyrinthine is the case that Caesars is paying through the nose for legal help: nearly $16 million already, with some lawyers racking up $1,355 an hour. A Caesars exec defended the use of pricey legal help by citing the “great complexity, high stakes and severe time pressures” of the bankruptcy, which is expected to last a year.

They won’t get much sympathy from Nicole Houng, whose father just lost his SERP pension. In a letter to Goldgar, she railed against the generous compensation showered upon Loveman while her father was left out of pocket, even though he “brought in customers that would come in and lose millions every trip.” We’re in the early going of the Caesars bankruptcy and already the knives are coming out in earnest.

* Caesars may be late to the party in South Korea. Gaming revenue grew for the ninth straight year, but only 1% and a mere 0.3% for tourist casinos.

* If you need to refresh your eyes from the ugliness of the Caesars bankruptcy, you can feast them on dazzling, aerial images of Sin City that are arguably even more brilliant than what the naked eye perceives.

* At the other end of the spectrum is this piece of drive-by journalism that mocks local icon Bonanza Gifts (Motto: “If it’s in stock, we have it.”). The writer’s palpable disdain for the shoppers and for Las Vegas tourist culture is certain to leave a bad taste in your mouth.