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Gaming Guru

Richard N. Velotta
 

Aladdin Deal Clears FTC Review

18 August 2004

LAS VEGAS -- The acquisition of the Las Vegas Strip's Aladdin hotel-casino by a group headed by Planet Hollywood co-founder Robert Earl has cleared another regulatory hurdle.

A spokesman for the Federal Trade Commission said Tuesday that the acquisition of Aladdin Gaming LLC by BH/RE LLC, an Earl subsidiary, posed no antitrust concerns for the FTC or the U.S. Department of Justice. The spokesman said all transactions in excess of $50 million receive initial antitrust scrutiny and if the deal has a potential detrimental impact on the market, an investigation is launched.

The spokesman said the transaction was granted "early termination," meaning it wouldn't receive further antitrust review. He would not say whether there were any protests filed with the FTC or the Department of Justice against the deal, noting that the case file is not public.

BH/RE LLC is a Nevada corporation controlled by Earl and Bay Harbour Management LLC managing principal Douglas Teitelbaum. The management group that will run the proposed Planet Hollywood resort includes Earl, Bay Harbour and Starwood Hotels and Resorts Worldwide Inc.

In another matter, Planet Hollywood officials affirmed their earlier estimate that about 20 managers are being fired as part of the transition to a Planet Hollywood resort.

But sources said the number of managers being terminated was greater than the number Planet Hollywood disclosed and that the property's marketing and public relations departments were among those being axed.

Planet Hollywood spokeswoman Amy Sadowsky said the company is not announcing details of which employees and departments are being eliminated as part of the transition.

Such purges are common in corporate takeovers, said Keong Leong, chair of the management department at UNLV's College of Business. "The (image) that Planet Hollywood would like to project would be different than they had before. I'm sure they would like to have their own people running the show."

"Apparently what they had in the past did not work. They must make some changes," Leong said.

The Gaming Control Board last week recommended approval for the group taking over the Aladdin after grilling Earl about a variety of concerns with his application as well as concerns about Planet Hollywood's prior bankruptcies. The group faces a final hearing before the Nevada Gaming Commission Aug. 26.