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Howard Stutz

New LV Sands president ready for action

26 May 2009

LAS VEGAS, Nevada –- If he had done his job correctly, Michael Leven wouldn't be president of Las Vegas Sands Corp.

Leven, a member of the casino operator's board of directors since 2004 and a 20-year friend of company Chairman Sheldon Adelson, was asked to find a replacement for Bill Weidner, whose contract was expiring at the end of the year.

Insiders didn't believe the board would renew Weidner's deal. Months of infighting caused a public rift between Weidner's management team and Adelson. Some speculated Weidner would depart before the year was over.

The trick for Leven, who spent 48 years in the hospitality industry, was finding a person who could mesh with Adelson, who is reputed by some to have a somewhat prickly personality.

Several candidates, thought to be acceptable to Adelson in both style and experience, were vetted. But they didn't pan out.

In the end, Leven just needed to look into the mirror. Weidner was forced to resign March 3 and Adelson asked his longtime friend to take over.

Leven, 71, who had been retired from the hotel and lodging business for several years, spent the past year as the CEO of the Georgia Aquarium at Atlanta.

It took three days to hammer a two-year contract that pays Leven $2 million annually to serve as president and chief operating officer of the casino company, which operates The Venetian and Palazzo on the Strip, three casinos in Macau and opened a $743 million casino in Bethlehem, Pa., on Friday.

The key for Leven was getting his wife, Andrea, to approve.

"She thought I should consider it," Leven said, adding his wife will move to Las Vegas from their home in Atlanta this fall. "Sheldon asked me to take the job for two years and help him find a replacement."

But Leven may stick around longer.

"Two years doesn't mean two years," Leven said. "I want to provide some stability to the organization."

As a board member, Leven had grown concerned about the company's direction and financial challenges.

In November, facing a potential bankruptcy, Las Vegas Sands completed a recapitalization effort that raised $2.1 billion. Adelson, who put more than $1 billion of his own money back into the business, saw his controlling stake in the casino decline by almost 20 percent.

Leven made his opinions known.

"You can complain, but you don't ever feel you're being heard in the same way," Leven said. "Now, all the things I was complaining about I have to fix myself."

Leven is the former president and CEO of U.S. Franchise Systems, which he founded in 1995. The business developed and franchised the Microtel Inns & Suites and Hawthorn Suites. Leven had previously held president positions with Holiday Inn Worldwide, Days Inn of America, and Americana Hotels. He has also served on the board of directors of Starwood Hotels and Resorts.

While his hotel and lodging bona fides are lengthy, Leven admits he has little gaming experience. One of his former hotel chains had small casinos in San Juan, Puerto Rico, and Aruba.

"They were nothing like Las Vegas casinos," Leven said. "They would be sundry stores in our hotels."

He said Las Vegas Sands has a strong gaming team in place, led by Executive Vice President Rob Goldstein. What's needed is someone with the skills to oversee all aspects of the company.

"We were lacking in the ability to operate," Leven said. "We need someone to run the business and all the processes in an organized way. Gaming is about one-third of our profits and the other two-thirds are in the hotel, convention and banquet areas."

Leven said his goals are to "rightsize" the company's operations, especially in Macau. Las Vegas Sands operates three resorts there, but stopped construction last year on several properties along the Cotai Strip. The company has set out on cutting some $470 million in annual operating costs from the books.

Leven's biggest task is to successfully open the $5 billion Marina Bay Sands in Singapore by the end of this year. Las Vegas Sands has spent almost three years building the massive integrated resort.

"Singapore is the one single thing that causes me to wake up at four in the morning," Leven said. "We have a handle on Las Vegas and we're getting a handle on Macau. I worry about Singapore, not because the market isn't there, but because it's a very complex building.

"It's a new metric for us with a lot of new people," he added. "It's not going to be a slam dunk or an easy thing. It's going to require a lot of attention."

Union Gaming Group principal Bill Lerner said Wall Street will give Leven a pass for a short time because many of the financial issues Las Vegas Sands dealt with predate his tenure as president. Lerner agreed that a successful opening in Singapore was Leven's foremost priority.

"The company's rescue financing is already behind them," Lerner said. "From the Street's perspective, he's in a relatively good position. He has a lot of hospitality experience, which is greatly accretive to the company."

One of the key dynamics that Lerner and other analysts will be watching is Leven's relationship with Adelson. Weidner spent 14 years with the company, but his relationship with Adelson deteriorated throughout 2008.

What's clear to most observers is that the 75-year-old Adelson is in charge and calling the company's shots.

"Most of these companies are run like a democracy, unless you have someone like Sheldon at the helm," Lerner said. "He assumes a certain amount of control."

Leven said he's comfortable in his relationship with Adelson to occupy the office a few doors from the chairman's. He's worked for billionaires in the past.

"There are no surprises with Sheldon," Leven said. "He's a genius, but he's subject to errors just like we all are. At the end of the day, he's an iconic character. He's concerned about all the people in the organization."