NO HOLDS BARRED

Press Release from Culinary Workers Union Local 226:

Report Shows Station Casinos Insiders, Not the Recession, Drove the Company into Bankruptcy: Labor Union Calls on Company Creditors to Demand Significant Equity Investment from Insiders

Las Vegas—In light of the Chapter 11 bankruptcy of Station Casinos, Inc., the Culinary Workers Union Local 226 is calling on creditors to demand a significant equity investment by insiders, who have amassed over $1 billion from the company. According to an analysis released by the union, the company could have averted bankruptcy if not for the substantial debt it took on largely to enrich a small group of company insiders. The report examines how this debt enabled insiders to extract over a $1 billion from the company in recent years and that these insiders, not the global recession, drove the company into bankruptcy.

Station Casinos is a major employer in the Las Vegas Valley, many of whose over 13,000 employees are family members or friends of Culinary Union workers. The union’s members, as well as the larger community, are rightly concerned about the continuing uncertainty over the future of the company and its impact on Las Vegas.

“Station Casinos is a uniquely Las Vegas company that owes it success to Las Vegas locals like our members,” said D. Taylor, Culinary Workers Union Local 226 Secretary-Treasurer. “The company has a special obligation to our community. Its owner-managers have a responsibility not just to their Wall Street lenders and investors, but to their employees, customers, suppliers, and vendors right here in this community. The livelihoods of a lot of people and their families are closely tied to this company’s financial well-being. Clearly, the owner-managers and other insiders were more interested in extracting wealth from the company for themselves than ensuring its and its employees’ future. Now it’s time for them to give back.”

The report shows:

· Company insiders, led by members of the Fertitta family, nearly tripled the company’s long-term debt load between 2005 and the end of 2007 from $1.9 billion to $5.2 billion.

· Of the new debt incurred during this period, more than two-thirds was used to buy back shares and to complete a management-led buyout, both of which significantly benefited a small group of insiders.

· In 2006 and 2007, the company borrowed $990 million to buy back 14 million in outstanding shares. This was the true cost of the company’s stock compensation program over the previous years, which had been described by an independent proxy advisory firm as “the most expensive and liberal we have reviewed” and an “excessive transfer of wealth” to insiders.

· In 2007, the company took on $1.6 billion of new debt to complete a management-lead buyout. More than $660 million – or 40% – of the proceeds went to company insiders. The Fertitta family received $495 million alone as a result of the buyout.

· If the company had forgone these two non-productive transactions – the share buybacks and the buyout – it would have $2.6 billion less debt, significantly less interest expense, and could have averted bankruptcy.

· Since 2001, company insiders received more than $1 billion in executive compensation and from the buyout even as they led the company down the path toward bankruptcy. In contrast, other stakeholders in the company have had to suffer the consequences of their financial mismanagement. Not only is the company in Chapter 11 reorganization under the bankruptcy code, the company stopped matching employees’ 401(k) contributions, more than doubled PPO health care premiums for rank-and-file workers, slashed shifts and cut hours for workers, and terminated hundreds of long-time employees by replacing coffee shops with subcontracted restaurants.

The Culinary Workers Union, Local 226, an affiliate of UNITE HERE, is the largest local labor union in the gaming industry. The Culinary represents approximately 55,000 casino and resort workers on the Las Vegas Strip, in downtown Las Vegas, and in downtown Reno.

For a copy of the report please contact Ken Liu at 702-387-7001 or kliu@culinaryunion226.org.

http://www.culinaryunion226.org/

Labels: Culinary Workers Union Local 226, Fertitta, Las Vegas, Station Casinos

On our Labor Day edition of NO HOLDS BARRED, we included a salute to the Las Vegas-based Culinary Workers Union Local 226. This 60,000-member union is the largest in Las Vegas, where the casinos, hotels, and other venues in which its members work serve as home for countless combat sports events in boxing, mixed martial arts, kickboxing, and wrestling.

Recently, the Culinary Workers Union Local 226 and the Bartenders Union Local 165 have been in contract negotiations with the casinos. Some casinos have already agreed to new contracts with the unions, but many others have not, actually seeking crippling givebacks from the workers. The Tropicana, for example, has proposed a contract in which they would opt out of the Culinary Workers Union's health care and pension plans, thus effectively destroying them.

To counter these attacks and protect the livelihood of their members, the unions polled these members to seek approval for the negotiating committees to authorize "economic action, up to a strike."

The vote: 99% in favor.

Below is the press release issued by the Culinary Workers Union Local 226 about these negotiations:

FOR IMMEDIATE RELEASE
September 12, 2007

Las Vegas Casino and Laundry Workers Vote to Authorize Strike

Las Vegas - In two separate shift meetings, members of the Culinary Workers Union Local 226 and the Bartenders Union Local 165 voted by a 99% margin to authorize their negotiating committees at fourteen Las Vegas casinos and two industrial laundries to call for economic action, up to a strike. The vote covering almost 10,000 casino and laundry workers affects properties in both Downtown Las Vegas and on the Strip.

D. Taylor, Culinary Union Secretary-Treasurer noted that, “Today, Culinary members authorized their committee to call for economic action, including a strike, if that is what is necessary to achieve a fair contract. We hope that the affected companies see this vote as a wake-up call. Our goal is to return to the negotiating table and achieve fair, new contracts that protect the Las Vegas Dream for every member of this union, whether they work Downtown, on the Strip, in the casinos, or in the laundries.”

The Culinary Workers Union Local 226 represents over 60,000 workers in Nevada. Members of the Culinary Union work in many classifications including cocktail waitresses, cooks, bellmen, kitchen workers, housekeepers, and other service workers. On September 4th, the Culinary and Bartenders Unions, along with their parent union UNITE HERE, announced a $80 million strike fund to pay strike benefits, offer support benefits and cover logistical costs indefinitely.

Las Vegas Properties With Affirmative Strike Vote Results

Binion's
El Cortez
Fitzgerald’s
Four Queens
Fremont
Golden Gate
Golden Nugget
Jerry’s Nugget
Las Vegas Club
Las Vegas Hilton
Main Street
Plaza
Tropicana
Western
Al Phillips (Laundry)
Mission Industries (Laundry)

http://www.culinaryunion226.org

Labels: boxing, combat sports, Culinary Workers Union, Eddie Goldman, Las Vegas, mixed martial arts, MMA, No Holds Barred, Station Casinos, UFC, ultimate fighting, wrestling

NO HOLDS BARRED on PodOmatic

On this edition of NO HOLDS BARRED, host Eddie Goldman begins with a Labor Day salute to the Culinary Workers Union Local 226.

This 60,000-member union, based in Las Vegas, has a "PLEASE DO NOT PATRONIZE LIST" of non-union hotels and casinos. That list includes several which are owned and operated by Station Casinos, whose two top officers are Frank J. Fertitta III and Lorenzo J. Fertitta, who also are the main moneymen behind UFC and Pride. The anti-union practices of Station Casinos were noted in a major news article.

Next, we speak with one of the hottest prospects recently to enter the world of mixed martial arts, Jake Rosholt. Jake was a three-time NCAA Div. 1 wrestling champion for the national champion Oklahoma State Cowboys. He is now 1-0 in mixed martial arts, and next fights Friday, Sept. 28, at the Masters of the Cage XVI event at the Bricktown Coca-Cola Event Center in Oklahoma City, Okla. An Internet pay-per-view is planned for that event.

We speak with both Jake Rosholt and Ted Ehrhardt, managing partner of Team Takedown, which represents Jake and several other former top collegiate wrestlers. We discuss what Team Takedown is and hopes to accomplish, Jake's adjustment to fighting from wrestling, why he decided to switch to mixed martial arts rather than continue wrestling, the different attitudes in mixed martial arts and wrestling, and more.

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Labels: boxing, Culinary Workers Union, Eddie Goldman, Jake Rosholt, Las Vegas, mixed martial arts, MMA, No Holds Barred, Station Casinos, Team Takedown, Ted Ehrhardt, UFC, ultimate fighting, wrestling