President and Chief Executive Officer, Planet Hollywood Worldwide Resorts
After eight years at American Casino and Entertainment Properties, where the focus was on operations and cost containment, Richard Brown is now charged with building on a brand that is recognized worldwide. When owner Carl Icahn sold American Casino to Goldman Sachs early in 2008, Brown became a free agent. And Planet Hollywood was a perfect fit. Brown’s expertise, honed for years at Harrah’s and ACEP, is marketing. Expanding a powerful brand should fall right into his wheelhouse. He explained his plan in December to Global Gaming Business Publisher Roger Gros. To hear a full version of the interview, visit www.ggbmagazine.com and click on the GGB Podcast button.
GGB: Do you believe the Planet Hollywood brand is still viable, given the problems the restaurant chain had?
Brown: Absolutely. If you look at what we’ve done here on the Las Vegas Strip, the brand standards that have been developed here are outstanding, especially considering the previous property here. I’ve brought numerous prospective clients here and they are totally amazed at the transformation. Robert Earl (Planet Hollywood chairman) and (property CEO) Mike Mecca and their team have really set the standard, for me, to take and grow on a worldwide basis.
It is a broad-based brand. When you consider how Robert uses celebrities, everyone likes celebrities and identifies with them. That is a great mass appeal.
The Las Vegas hotel looks nothing like the restaurants. Virtually no memorabilia and few references to “stars.” What is the image of Planet Hollywood today, and will this décor be duplicated in other Planet Hollywood casinos?
Our image is built around celebrity, entertainment and excitement. And it all manifests into energy. When I sit down with developers or people looking to partner with us, that’s the word that comes out consistently: high energy. Whether it’s our coffee shop or anywhere else in the building, you see high-end technology. Robert wanted a place where there is consistent energy and excitement and the team here has done a great job. So they’ve made it very easy for me by setting this standard.
There are several large casino companies in financial difficulty. Does Planet Hollywood fall into that category?
In this environment, I think everyone is challenged today. Companies that have been really astute in what they have done with their debt are in a great position today to make additional acquisitions. And I think Planet Hollywood is in that position to be very impactful down the line with the expansion of the brand.
I think of it in three initiatives. Some potential clients are looking to license the brand. Many of those prospective clients are in markets where competition is tough. Another way we’re going to expand the brand is through licensing and management. A location that doesn’t have a solid management team in place can come to us for help in both branding and management. Thirdly, we will be an acquirer of properties in this environment.
What about access to capital? That’s a problem for everyone. Does Planet Hollywood have a secret other companies don’t have?
It’s not a secret. Our key source is Bay Harbour Management, which is our partner here in Las Vegas. They are a group of very astute businessmen led by Doug Teitelbaum, who is well-known on Wall Street. From a stability standpoint for us, it is a place for us to consistently go because they are already a partner with us. They have been very helpful to me during my short time here. Not only do I bring my sources to the table but these guys have a tremendous amount of contacts as well, so they’ve been great partners so far.
Is Planet Hollywood going to be in the market to pick up some of the second-tier properties that may become available when the big companies start to divest?
I am in contact with all of the major operators in the business. Due to their debt structure, they’re probably going to have to eliminate some of their non-strategic assets. We want to be aggressive in pursuing those assets because they may fit into our business plan very well.
How is Planet Hollywood in Las Vegas performing in the downturn? Can you rebound more quickly than some of your other competitors?
When you go back to where this property was prior to the transformation, I don’t think you can even use the term “rebound” to describe it. When this economy starts to ease, everyone is going to get a bounce of some sort. This has been a property that has been very well operated and very well thought-out strategically. It has a unique and differentiated position in the marketplace. That is very important, especially in an environment like this.
What is the Planet Hollywood plan going forward? Would you like to be all the major jurisdictions in the United States and internationally?
When I think about the expansion of the brand, you want to be in places where you’re going to get noticed. And those are the major gaming markets. These are certainly a target for us. But we’re finding a lot of Native American operations where competition is getting fierce are becoming interested in our brand and what it can do for them. On the international side, the prospects are unlimited, and the credit crunch does not seem as severe there.
Where would you like this company to be in five years?
I would like to see our brand in the major markets, some appropriate Native American markets and internatationally in major destination resorts. We want to be in places where we get noticed and where our essence plays very strongly.