$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."

FMI: www.gaylordentertainment.com, www.omnihotels.com