Revel’s newly named interim CEO is returning to the city where he got his start, but at a time sure to test his ability.
Jeff Hartmann, 51, a Voorhees native who interned for the state Casino Control Commission in 1984, has been picked to lead Revel as it works to restructure $1.5 billion in debt, reduce costs, increase revenue and improve its position in the Atlantic City market, where it has consistently placed in the bottom third in gambling revenue.
“Anybody is going to face a difficult if not impossible situation with Revel,” said Clyde Barrow, author of the New England Casino Gaming Update, an annual report of the regional casino industry. “You’re either going to come out of it as a hero turnaround artist or you’re going to fail.”
Hartmann’s greatest strength, industry observers said, is his financial acumen and experience. After finishing his internship, Hartmann worked for PricewaterhouseCoopers in Manhattan, where he conducted audits of Atlantic City casinos such as Golden Nugget, Tropicana Casino and Resort, and the former Claridge Casino Hotel.
From there, he was recruited to work at Foxwoods in Connecticut and in December 1996 was interviewed and later hired by Kevin DeSanctis for the position of chief financial officer at Mohegan Sun. As the chief financial officer, Hartmann sold Mohegan Sun bonds to Michael Garrity, who was working at the investment house Fidelity in Boston at the time.
DeSanctis and Garrity later would team up to finance and develop the $2.4 billion Revel project. They stepped down last week as CEO and chief investment officer at Revel, respectively, as part of the restructuring.
Hartmann said he has much respect for DeSanctis, with whom he has interacted a number of times in his career, including in 2005, when he was part of the Mohegan team that negotiated the purchase of Pocono Downs in Pennsylvania from Penn National Gaming, where DeSanctis was working at the time.
“He’s one of a kind,” Hartmann said of DeSanctis. “I’m just trying to follow his footsteps.”
Earlier this year, DeSanctis recruited Hartmann to work as a consultant at Revel. The casino’s board announced his promotion Wednesday to interim CEO. No decision has been made on whether Hartmann will remain in his position once Revel emerges from the bankruptcy and restructuring process.
Fixing Revel’s balance sheet will be one of his top priorities, Hartmann said. Through the prepackaged Chapter 11 filing, Revel hopes to reduce its debt from $1.5 billion to $272 million, which will give the company more money to spend on operations and marketing to draw repeat business and “Revel rejectors” — customers who previously may have written off Revel.
“Having a strong balance sheet kind of drives a company forward,” he said.
Hartmann said he also will be looking for cost-cutting opportunities, from staffing to who supplies the toilet paper.
“We’re looking at the entire cost structure,” he said.
Roger Gros, an industry analyst who has known Hartmann for 20 years, said Revel needs a leader with financial discipline.
“He understands finances inside and out, and I think that is what Revel needs right now,” Gros said of Hartmann.
At the same time, while Hartmann has a history of financial leadership, he has a shorter resume when it comes to serving as a CEO. He served in that position at Mohegan Sun from January 2011 until October 2012, when his employment was terminated along with hundreds of other employees.
Hartmann said he left the casino as “part of a broader operational restructuring,” as well as to form a new consulting company bearing his name.
Representatives of Mohegan Sun could not be reached for comment.
Gros and Barrow said Hartmann and his former employers may have gotten into a disagreement, or perhaps they preferred his replacement, Bobby Soper, who is a member of the Mohegan Tribe, but that he likely helped Mohegan Sun navigate financial difficulties that were similar to Revel’s.
“He was there as president for a year and half and it was during this difficult time, so it’s hard to say whether he was successful nor not,” Gros said.
Given Revel’s situation, layoffs may be possible, he said.
“He’s not going to judge things emotionally. He’s going to judge things on what needs to be done and just do it,” Gros said. “I wouldn’t be surprised to see some layoffs there in the next couple of months.”
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