Restless billionaire Perelman continues to shake things up at Scientific Games By Howard Stutz, Executive Editor, CDC Gaming Reports June 4, 2019 at 7:18 pm Billionaire Ron Perelman shook up Scientific Game’s C-suite a week ago, and Wall Street yawned. Bringing in former Aristocrat Leisure CEO Jamie Odell as a special advisor, as Perelman did, is par for the course for the consummate dealmaker. Perelman said in a statement his one-time gaming equipment rival would offer support to the company’s current growth strategies. Scientific Games Chairman Ronald Perelman Perelman, 76, chairman of Scientific Games and the Las Vegas-based company’s largest shareholder, has installed four different CEOs since 2013. That year, the then lottery-centric company acquired slot machine developer WMS Industries for $1.3 billion. Two years later, Scientific Games bought Bally Technologies for $5.1 billion. The gaming equipment provider reported $8.9 billion in debt as of March 31, had flat first quarter cash flow, and has a stock price roughly 65 percent below its 52-week high. Perelman might be a getting a little restless. Currently No. 49 on the Forbes 400 with a net worth of $9.2 billion, Perelman last December spent $27 million, in what amounted to a holiday shopping spree, to acquire 1.5 million additional shares of the company, upping his stake to 39.2 percent. Lorne Weil, Gavin Isaacs and Kevin Sheehan have all come and gone as Scientific Games CEOs in the last six years. There is also some history to consider: Isaacs was initially hired as a Perelman consultant and was quickly elevated to CEO. If current Scientific Games CEO Barry Cottle, who has been on the job for a year, is worried, he isn’t tipping his hand. “(I’ve) long admired and respected (Odell’s) success and leadership in our industry,” Cottle said in a statement announcing the appointment. There was zero reaction from the investment community when the Odell press release crossed the wire at the unusual time of 4 p.m. PDT on May 28 – 7 p.m. on the east coast – long after the markets had closed. However, the release came out at 8 a.m. in Australia, where Odell resides. Investors had a much stronger reaction to Scientific Games on Monday, sending shares up more than 7 percent a day after Illinois approved a massive statewide gaming expansion and the company announced a contract extension for licensing the use of “The Price is Right,” “Family Feud,” and “Press Your Luck” brands on slot machines and lottery products through 2022. Analysts said Scientific Games has lost market share on the slot machine side to a larger rival – Aristocrat – and smaller competitors, such as AGS and Everi Holdings. Meanwhile, the company has had tremendous success in providing sports wagering technology and management systems since the May 2018 Supreme Court ruling opened up the legal sports betting market throughout the U.S. The company reached deals with Caesars Entertainment, Wynn Resorts, and New York’s Oneida Indian tribe for both its Open Bet platform and for the company’s Don Best Group division, acquired last October, to manage pricing and other sports wagering efforts. In a research report to investors the day before Odell’s appointment, Macquarie Securities gaming analyst Chad Beynon said the Supreme Court decision caused Scientific Games’ stock price to skyrocket to more than $60 a share when investors believed the company’s sports betting platform was a winner. “(They) quickly realized that Scientific Games’ economics are low, and the rollout will be slow,” Beynon said. “At this point, (the company) gets almost no credit for the platform and partnerships, but we believe they will when the NFL season begins or more states launch.” Shares of Scientific Games closed at $20.53 on Tuesday. Beynon said the company’s debt has focused investors on increasing cash flow, which means growing slot machine sales is key. That effort needs to happen in the second half of the year. “We think second quarter revenue and (cash flow) growth will be the lowest in six years,” Beynon said. Perelman, who controls Scientific Games through his McAndrews & Forbes investment vehicle, is a shareholder in cosmetic giant Revlon, owns a stake in Humvee manufacturer AM General, and, according to his Forbes biography, is a prolific art collector with thousands of items in his portfolio. He’s also been married five times – including a tabloid-filling six-year marriage to actress Ellen Barkin. It was something he joked about to the Nevada Gaming Control Board during Scientific Games’ licensing hearing in 2013. “I expected you to ask me about my divorces. I’m glad you didn’t,” Perelman said in response to a question from then-Chairman A.G Burnett. “I’m a specialist on prenuptial agreements.” Time will tell if Scientific Games will divorce another CEO. Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at firstname.lastname@example.org. Follow @howardstutz on Twitter.