$15 Million Gulfstream G150 Allegedly Used For Personal
Flights
Gaylord Entertainment Company -- owner of the upscale Gaylord
Hotels, the Grand Ole Opry, and other entertainment properties --
has drawn sharp criticism from TRT Holdings Chairman Robert Rowling
for poor performance, excessive overhead, and corporate waste...
the latter, alas, in the form of alleged excessive personal use of
the company's corporate jet.
TRT, the major shareholder of Gaylord Entertainment, has taken
special interest in the company's financial scorecard. TRT seeks to
double the size of its piece of the Gaylord pie to 30 percent, and
to place four of its execs, including Rowling, on Gaylord's Board
of Directors.
Last week, Gaylord released a statement defending its
operational policies and resistance to TRT's proposed increased
share of the company:
"The Company continues to believe it is not in the best interest
of all of its shareholders to give TRT effective control over the
Company's long-term strategy without a full and fair price being
paid to all Gaylord shareholders. TRT's filing...is the continued
attempt by a competitor to control Gaylord Entertainment without
paying a premium.
"Moreover, TRT's participation on the Gaylord Board would
present a serious conflict of interest because TRT owns Omni
Hotels, a chain that competes nationwide with Gaylord for meeting
business and directly with Gaylord in three of its four principal
markets.
"The Company would be happy to have
the performance of Gaylord Hotels judged against the Omni Hotels
with which they compete. Gaylord Entertainment remains committed to
providing long-term value to its shareholders by providing
outstanding service to its customers."
TRT offered what it considered to be constructive criticism to
Gaylord last November, but was rebuffed. In response to Gaylord's
recent statement, Rowling sent a letter directly to fellow
shareholders last week, with a frank discussion of what it called
Gaylord's lack of business discipline and accountability to
shareholders.
In part, Rowling's letter said, "While many actions of the
management team appear wasteful, in our view, the poster child for
Gaylord's excess is its operation of a $15 million Gulfstream G150
private jet, which it acquired at the end of 2006.
"With only three hotels located outside of its corporate
headquarters in Nashville -- and all close to major airports -- the
purchase and operation of this aircraft seems to us to be anything
but 'in the best interests of all Gaylord shareholders.'
"Examination of the aircraft's flight log over the past two
years reveals that the plane is often used to fly back and forth to
locations in Mississippi and Florida, where Gaylord's CEO maintains
a personal farm and a vacation home. The jet has been used at least
36 times for this purpose and this represents more than 25% of the
total use of the plane.
"In addition to this frequent personal use, Gaylord is using the
aircraft for what appear to be questionable purposes to places such
as Alaska, South Dakota, Brazil and Talladega (on race day). After
two years of owning the aircraft, Gaylord decided last month to
block public access to the flight logs. This appears to be a
decision to consciously avoid transparency in connection with the
use of the plane.
"Gaylord expressed concerns over potential conflicts of interest
that could arise if designees of TRT assume an active role on
Gaylord's Board due to TRT's ownership of the Omni Hotels
chain. We believe this concern to be unfounded...aside from
the undersigned (Rowling himself), we intend to nominate director
candidates who have no affiliation with Omni Hotels or TRT."
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