Well now we know which dog won the Las Vegas Sands ‘junkyard fight’—and it wasn’t ‘Gruffalo Bill’ Weidner.
“We helped him resign a little bit,” the company chairman Sheldon Adelson told a Deutsche Bank AG conference in New York earlier this week. That must go down as one of the driest comments of the year, and it’s only March.
Mr Weidner—possibly with an eye to his general reputation and future employability, has so far resisted giving a blow-by-blow account of events that led up to his departure.
“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,” Mr Weidner, 63, said diplomatically earlier this week about his former boss, adding: “I figured it was time for me to move on.”
Mr Adelson hinted though at a rich hinterland of boardroom exchanges when he told the New York gathering: “I’ve always been in charge—theoretically.”
Mr Weidner had been with the company for more than 13 years, first as President and Chief Operating Officer of The Venetian Las Vegas, before promotion in 2004 to the equivalent role for the parent company. Many modern marriages don’t last half as long, but if Mr Adelson had any regrets about the breakdown of the relationship, he managed to hide them very well.
Asked at the event if Mr Weidner’s departure was a loss, Mr Adelson replied: “Just the opposite.
“I got a call from one of our people in a remote location who said, ‘I’m very glad that there’s one person steering the ship.’ That tells the whole story.”
In the end, in business money matters more than personal fights between key personalities. Everyone is in a more forgiving mood when a company is winning.
A key flashpoint between Mr Weidner and Mr Adelson was Mr Weidner’s claim there was an unhelpful delay at board level in raising fresh funding in November last year, compounded by a new share issuance when the stock had already crashed.
LVS raised USD1 billion from the offer at USD5.50 per share—miles below the USD122 per share the stock had traded at a year earlier.
In the end, Mr Weidner’s going appeared to be more of a relief to the market than was his attempt to stay and exert his influence.
LVS’ stock price actually rose 11 percent, from USD1.42 to USD1.58 in trading, following the news that the COO had bowed out. Whether the two events are connected is unclear, but markets usually discount companies that have leadership tensions, and reward those with clear command structures.
Mr Weidner’s exit became inevitable after two board members informed him on 4th March that he would no longer be with the company. That fact was revealed in a filing to the US Securities and Exchange Commission (SEC). He formally quit four days later.
Mr Adelson said the differences between the company and Mr Weidner concerned a “potpourri of issues”.
Michael Leven, a veteran hospitality industry executive who has been on the LVS board since 2004, has replaced Mr Weidner.
News of disagreements in the LVS boardroom emerged in November, in the wake of the now-famous filing to the US Securities and Exchange Commission by the company’s auditors PricewaterhouseCoopers LLP questioning the long-term viability of the company due to the market-wide difficulties of raising fresh credit.
The company said shortly afterwards it had set up a committee of board members to address what it called “outstanding differences between our chief executive officer and other senior management members”. LVS added it was addressing a “loss of confidence by certain senior management members in the management of the company”.
Soon after that, on 17th November, Mr Weidner made his ‘dogfight’ comments—”You can think of it as a junkyard dogfight”—when asked about the disagreements, hinting he was one of the dogs doing the scrapping.
LVS raised USD2.14 billion in November, partly from billionaire Mr Adelson, 75, and his family. It suspended construction in Macau, laying off 11,000 construction workers, and stopped some work in the US, in order to conserve cash and allow the firm to finish casinos at Marina Bay Sands in Singapore and Bethlehem, Pennsylvania.
The decision to inject more capital was “a matter of robust debate within the organisation,” Weidner said at the time. The company, its shareholders and board took too long to decide, he said, calling that “a monumental screw-up.”
“It’s fair to say, in difficult times, differences of opinion become magnified,” Mr Weidner added this week.
Mr Weidner was previously considered within the organisation as a person who had Mr Adelson’s trust and could speak to him frankly.
The public disagreements meant though that when the end came it was no great surprise to the industry. There was a feeling that Mr Weidner had been facing his own personal credit crunch with his boss because of his decision to wash the company linen in the media spotlight. His position wasn’t helped by a number of public relations gaffes, most of them linked to Macau, and he couldn’t roll the credibility ‘debt’ over.
Examples include his performance on the witness stand last year at the civil court trial in Las Vegas of the case brought by Hong Kong businessman Richard Suen against LVS. Mr Suen, was claiming (successfully as it turned out) a success fee from LVS for help in securing LVS’s Macau gaming licence. Lawyers for the plaintiff managed to paint Mr Weidner into a corner. If Mr Weidner really believed Mr Suen lacked the necessary experience to broker such a big deal, then he, Mr Weidner, must have failed in his fiduciary duty to LVS by engaging with Mr Suen in the first place—ouch!
Then there was the very public insight into the LVS boardroom. Last but not least, in early January he scored what in retrospect might be considered a spectacular own goal. When addressing an investors’ forum in the US he talked up the benefits of Singapore’s low gaming tax and the company’s commitment to moving full steam ahead with Marina Bay Sands, only weeks after LVS had announced the suspension of building work in Macau. It provoked a petition to Macau’s chief executive Edmund Ho calling for the Macau government to review its agreements with LVS and accusing the company of a cavalier attitude to the territory.
Such gaffes may not have been capital offences, but as Mr Weidner pointed out, Mr Adelson is the boss. Ultimately everyone is dispensable unless they hold the purse strings.
“The original strategist… the guy who started the whole thing is still with us—that’s me,” said Mr Adelson, getting the final word.
