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Thread: Inside The Evil Empire

  1. #21
    Quote Originally Posted by GambleBotsChafedPenis View Post
    Story 6: Lies, Damn Lies, and Made Up Statistics

    sorry for the lack of stories lately, have been racking my brain trying to think of stories of fail (and there were many), but fortunately for myself I must be doing a good job of blocking out my time there...

    this story involves the evil empire and their use of bullshit stats to make themselves feel better about the absolute fail that was going on...no need to concentrate on EBITDA when you can make up financial metrics that make you look good...my favorite made up stat was something they called "marketing efficiency"...if memory serves this stat was basically just marketing cost divided by gaming revenue (that's the basic jist of the stat...it might have had a few other things in it, but that was the main computation)...

    so you may ask, why is this bullshit...good question...

    let's say my casino is running a $10K marketing budget and getting $100K of gaming revenue from it...so our marketing efficiency would be 10%...now let's say I'm a cheap ass company like the evil empire and want to slash expenses and now have a $5K marketing budget and make $60K in gaming revenue for it...now my marketing efficiency has improved to 8.3%...NOW THAT'S SOME GOOD STUFF THERE! oh wait you mean I lost $40K in gaming revenue (not to mention ancillary revenue like hotel/F&B/and fee revenue, don't forget the evil empire is a fee revenue company not a casino) by becoming more marketing efficient? oh well, our bullshit made up stat shows that we are cutting costs which while in bankruptcy is all we need to show...cut costs with no regard for what it's doing to the top line...

    the region I worked in was dogshit (pretty sure you can figure out where I worked from all these stories), but that's how it was treated...cut, cut, cut expenses by all means necessary just so you could show the 'C' level and PE shitheads that you were cutting expenses...and if cutting those expenses didn't make business sense and were actually a net negative to the top line, just make up some bullshit stat to make it sound good...

    I actually had to tell the marketing people and finance people in the company this stat every month...drove me batshit fucking crazy that they were so fixated on this number that they had just made up to make themselves feel better about the sinking ship that was our region...

    Theres a reason why my dad used to only semi-joke there is a class in MBA programs entitled "How to lie with Statistics or How to massage Datapoints to make the data match the conclusion"

    Also I don't know who was coming up with those conclusions but to me the reality would be 10X ROI on the first investment (spent 10k and got 100k back) while the second would be 12x ROI.. I agree its asinine logic but points back to my previous sentence.. They don't bother to drill down to explain they just put lipstick on a pig and make it look good without mentioning that 12k was on 1/2 the budget and bottom line ends up dropping the bottom line by 40%..

  2. #22
    Quote Originally Posted by GambleBotsChafedPenis View Post
    ...so how do you show growth on the bottom line if you are projecting no top line growth? you hack away at expenses.
    I see this all time reading the earnings reports of publicly traded stocks. Their revenue is flat while their earnings skyrocket. It is all a big scam.

  3. #23
    Quote Originally Posted by Ryback_feed_me_more View Post
    Quote Originally Posted by GambleBotsChafedPenis View Post
    Story 6: Lies, Damn Lies, and Made Up Statistics

    sorry for the lack of stories lately, have been racking my brain trying to think of stories of fail (and there were many), but fortunately for myself I must be doing a good job of blocking out my time there...

    this story involves the evil empire and their use of bullshit stats to make themselves feel better about the absolute fail that was going on...no need to concentrate on EBITDA when you can make up financial metrics that make you look good...my favorite made up stat was something they called "marketing efficiency"...if memory serves this stat was basically just marketing cost divided by gaming revenue (that's the basic jist of the stat...it might have had a few other things in it, but that was the main computation)...

    so you may ask, why is this bullshit...good question...

    let's say my casino is running a $10K marketing budget and getting $100K of gaming revenue from it...so our marketing efficiency would be 10%...now let's say I'm a cheap ass company like the evil empire and want to slash expenses and now have a $5K marketing budget and make $60K in gaming revenue for it...now my marketing efficiency has improved to 8.3%...NOW THAT'S SOME GOOD STUFF THERE! oh wait you mean I lost $40K in gaming revenue (not to mention ancillary revenue like hotel/F&B/and fee revenue, don't forget the evil empire is a fee revenue company not a casino) by becoming more marketing efficient? oh well, our bullshit made up stat shows that we are cutting costs which while in bankruptcy is all we need to show...cut costs with no regard for what it's doing to the top line...

    the region I worked in was dogshit (pretty sure you can figure out where I worked from all these stories), but that's how it was treated...cut, cut, cut expenses by all means necessary just so you could show the 'C' level and PE shitheads that you were cutting expenses...and if cutting those expenses didn't make business sense and were actually a net negative to the top line, just make up some bullshit stat to make it sound good...

    I actually had to tell the marketing people and finance people in the company this stat every month...drove me batshit fucking crazy that they were so fixated on this number that they had just made up to make themselves feel better about the sinking ship that was our region...

    Theres a reason why my dad used to only semi-joke there is a class in MBA programs entitled "How to lie with Statistics or How to massage Datapoints to make the data match the conclusion"

    Also I don't know who was coming up with those conclusions but to me the reality would be 10X ROI on the first investment (spent 10k and got 100k back) while the second would be 12x ROI.. I agree its asinine logic but points back to my previous sentence.. They don't bother to drill down to explain they just put lipstick on a pig and make it look good without mentioning that 12k was on 1/2 the budget and bottom line ends up dropping the bottom line by 40%..
    lol there is...it's a required first year course...

    when your organization is more focused on cutting costs than generating top line, you get asinine shit like this that focuses more on the expense side than the revenue deterioration it is causing...im not gonna try to come up with anything to help any of the fuckers there, but there has to be a way to look at what you are getting outta your marketing dollars...while ROI would usually make sense when you are "investing" in something (and marketing is sorta an investment in a casino) I don't know if it's the best way cause i'd still rather spend the 10K to get the 100K even though my return in an ROI sense is less than the spending 5K to get 60K...guess the way to look at it is that as long as every incremental marketing dollar I spend generates $1.01 in revenue I'm cool with spending it...then you can argue that maybe it's not the best way to spend money if you have a constraint on expenses and that there is an optimal amount to spend, but the general idea is there...

    after suffering through shit like this if you see it in a company you work for run as far as way as fast as you fucking can because shit is about to get real...real shit...

  4. #24
    Quote Originally Posted by snake_in_the_ass View Post
    Quote Originally Posted by GambleBotsChafedPenis View Post
    ...so how do you show growth on the bottom line if you are projecting no top line growth? you hack away at expenses.
    I see this all time reading the earnings reports of publicly traded stocks. Their revenue is flat while their earnings skyrocket. It is all a big scam.
    yup...those are shit quality earnings...

    ill never forget budgeting...the two years when I took a major lead in that shit that they told us, flatline revenue from the prior year and hack away at expenses to get to the number...you know an organization is fucked if that's the case...

    expenses are a dicey thing...they are a "necessary evil" for lack of a better word, like marketing in the casino world...you damn well be spending on marketing if you want to be relevant and "hot"...but at the same time they have to be controlled...a great company will know what levers they need to pull on that side of things...

    if I saw a company that said they were gonna hack away at expenses for a year because they thought shit had gotten outta control (especially coming out of good times), i'd cut 'em some slack to right size things...they use that as a crutch to improve the bottom line after that year, then that big, red flag should be going up...

  5. #25
    For the record

    EBITDA = Earnings Before Interest, Taxes, Depreciation and Amortization

  6. #26
    Quote Originally Posted by AhoosierA View Post
    For the record

    EBITDA = Earnings Before Interest, Taxes, Depreciation and Amortization
    Lawyers and accountants are just artists that use the law and numbers as their medium of expression. Both are apt to get all avant-garde if left to their own devices and you have no fucking idea what you’re looking at.

    Accounting is not science - it’s art

    EBITDA is just an attempt to establish a Pantone color that can be agreed on by those that read/interpret the report.

    I think I would enjoy a ChafedPenis hawt take on the Caesars financial engineering jesus, Gary Loveman.

    In the end you died for his sins.

  7. #27
    Quote Originally Posted by Sanlmar View Post
    Quote Originally Posted by AhoosierA View Post
    For the record

    EBITDA = Earnings Before Interest, Taxes, Depreciation and Amortization
    Lawyers and accountants are just artists that use the law and numbers as their medium of expression. Both are apt to get all avant-garde if left to their own devices and you have no fucking idea what youíre looking at.

    Accounting is not science - itís art

    EBITDA is just an attempt to establish a Pantone color that can be agreed on by those that read/interpret the report.

    I think I would enjoy a ChafedPenis hawt take on the Caesars financial engineering jesus, Gary Loveman.

    In the end you died for his sins.
    wish I could San...I cant speak for anything outside my little bubble that I was in...basically was trying to keep the titanic afloat so didn't have time to really see the big picture of what the company was outside of the split into the 20 different operating companies...

    don't know how much loveman had to do with it...was more the PE geniuses who thought itd be great to lever up a gaming company at the height of what was then the second biggest gaming market in the country...im sure the guys who got their little peckers up in the air pitching this deal inside the PE companies made off with millions of dollars in bonuses...to me that shit is just laughable...wonder if they even considered what "local gaming" would do to the gambling landscape...im sure they brushed it off as, 'LOL these states outside NJ and NV have ZERO shot at putting a dent into the big 2s gaming revenue'...now PA has the second largest gaming market in the country and AC is still a big giant shithole suffering from a demographic clusterfuck while PA continues to draw from 2 of the top 5 metropolitan areas in the country...guess location does matter after all, eh boys?

  8. #28
    Story 7: The Billboard

    Note: This story didn't happen to me but to my shithead ex-boss so the numbers will be a bit hazy/off, but for this story just want you to focus on the thought process of upper management, not the numbers themselves...

    so we had a convention come to our region...it was a fairly big convention that was to be held at the region's big convention center...this convention center was not affiliated with any casino, but was rather owned by the government...I seem to remember it was supposed to have 80K attendees (could have been 50K, but again the exact numbers really don't matter)...so with this convention being held at a non-affiliated venue that means attendees we're spread out not just concentrated at one specific casino...

    our region had a ton of billboard coverage and management was debating on purchasing one of those billboards for a month of ads for one of our newer F&B outlets...again I don't remember the exact cost, but believe it was in the range of $10-25K for the month...there was a HUGE amount of debate on whether we should purchase this ad space...remember this is a region that was supposed to show high 8 figures of profit for the year arguing about spending low 5 figures...low 5 figures at the end of the year wouldn't even be a rounding error...

    so my shithead ex-boss had to do a full workup on this billboard to prove that it would be a wise use of expense money...I get wanting to make sure you aren't pissing away money, but to have a full workup on this kinda thing is just asinine...any idiot can quickly do some back of the envelop calcs to figure out that this is a no-brainer...and here they are:

    let's use the most conservative estimates we can, which would be 50K attendees and a billboard cost of $25K...

    the outlet we would be advertising was an outlet which had an average dinner check of roughly $45...so if you say that you'll get a 5% response rate to your billboard (I'm not a marketer, but think that seems like a low rate of response)...that's 2,500 additional customers...at $45 a pop that's an incremental $125K in revenue...subtract the cost of the billboard $25K, cost of the food which would be like $40K, and revenue share which I think would be like $7K (you could argue should probably put in incremental labor in this calc, which is fine, but still wouldn't matter in the overall profitability of the billboard) you would still be WAAAAAAAAY in the black on this billboard...if you are feeling quite saucy you can do a sensitivity analysis with the response rate to find out where your breakeven point is...

    basically that long winded story is meant to show how upper management was sweating each small expense...you can do that calculation even quicker saying that you have a 40% profit margin on that incremental revenue and see if it covers the cost of the billboard...that'll give you your absolute worst case scenario (because some of the costs, like labor, I don't think you need to factor in because you probably wouldn't staff up that much to handle this extra business), but in the evil empire every little expense had to analyzed 30 different ways just to make sure that it was ok...swear upper management at the company wont shit unless they analyze the bathroom and the toilet paper situation...
    Last edited by GambleBotsChafedPenis; 11-19-2017 at 11:31 AM.

  9. #29
    ok about the mints on pillows...we didn't have this in our region because our region was a fucking dump so no need to put a cherry on top of a shit sundae...but this kinda shit is par for the course for the evil empire...if an expense didn't generate direct revenue they would cut it...and this is obviously absolutely fucking stupid...gonna guess 'mintgate' cost the property $25-50K/year, but it was cut...you can come back at me saying, yeah if I find 20 of these expenses I've just created $1M more in profit...true, but as a business operator I'm not looking to cut expenses that impact guest experience...if I can cut some back of the house expenses that don't affect what the guests see, gimmie the hatchet and ill be the first one there hacking away...are these mints gonna be the reason people stay at caesars palace? obviously not, but it just shows that the place goes above and beyond for the guests...even druff said that he noticed when they weren't there...as a consumer I'm gonna be impacted by that sorta stuff whether I want to admit it or not...its just such a stupid ass thing to cut...again for a property like caesars palace this sorta thing is not even a rounding error at the end of the year...I don't know what expectations are for the profitability (EBITDA) for the property but just knowing what I know about the ones I covered, I'm guessing it's somewhere between $60-100M per year...

    as far as departments justifying their existence, yeah that sorta went on...you have to realize how things are structured financially...I don't remember all departments, but here is a good idea of the different ones...bolded ones are revenue generating departments...

    Slots, Table games, poker, slot performance, marketing, special events, seven star program, diamond/seven star lounge, security, surveillance, retail, nightclub, total rewards desk, parking, valet, employee dining room, housekeeping, maintenance, hotel, front desk, front office, transportation, accounting, food outlets, beverage outlets...so all in all there were probably 4-5 dozen different departments per property as if you were a restaurant you had a department that was just for your food and a department that was just for your beverage so that added a shitton more departments...

    as you can see there are A LOT of non-revenue generating departments in this operation (and I know I probably missed some non-revenue generating departments)...so the non-revenue generating departments would have to justify their existence by coming in under budget on their labor/expenses...that was GOOOOOOOOOOD LUCK because labor was budgeted so fucking tight it was insane...labor for all the non-revenue generating departments was most likely budgeting unrealistically (in my opinion) just so the region could "get to the number" that was assigned to the region for profitability...then operators had to meet these unrealistic targets (which they had to agree to during the budget process, they really didn't have much say in it) so to show savings was damn near impossible...we would do monthly budget reviews in February and march and bring all department heads in to basically justify their existence and where they were versus budget...this should have been a monthly thing, but people tended to forget about this shit after the first couple of months...and then come the end of the year when numbers weren't being met by the region, these budget reviews would become a thing again...i know, LOL way to keep on top of things...

    there was rarely a discussion (at least that I was involved in) about gaming revenues because I think a lot of that shit originated in corporate around their marketing "efforts"...we had marketing people where I worked, don't know exactly what they did because most of the shit seemed to be handled out of vegas (or at least that's the way it appeared to me)...so those areas rarely had to "justify" themselves...hotel was the same way...all the pricing was set out of vegas...again this was fucking laughable to me...the region where I worked generated the second most income for the company and everything was handled out of vegas...just what you want when youre a business, handling things 2000+ miles away in a market that is TOTALLY different than vegas...food and beverage operations would basically dance around their justifications by blaming decreased hotel occupancy rates if things were not going in their favor...

    hope that answers the questions from the radio, if not feel free to ask for clarification...
    Last edited by GambleBotsChafedPenis; 11-24-2017 at 01:17 PM.

  10. #30
    Story 8: The FTEs!!!

    an FTE is a full time equivalent, which is just a fancy way to say a 40 hour work week...so 1.0 FTE was equal to 40 hours...

    most of hourly labor at the evil empire had targets...so you schedule a certain amount of slot attendants per slot pull, certain amount of housekeepers based on occupancy, etc...I wasn't involved in any of the scheduling, but did see these reports weekly and to be honest they didn't make any sense to me because some of the metrics were just so fucking out there...I wish I remembered some of the crazy shit equations they had for these things (kinda like the whole marketing efficiency bullshit from a couple of stories ago)...so all of these metrics would spit out an FTE number and the department was supposed to have their labor matchup with (or be less) than that target number...

    ill never forget my one interaction with this shit...one of our AGMs was responsible for hotel ops and he got the report one day and ill never forget him losing his shit over the front desk being over their target FTEs by TENTHS of an FTE, not multiple FTEs, but TENTHS of an FTE...again I'm all about running a business as efficiently as possible, not wasting money and stuff, but jesus Christ...I wish I remember the exact number of FTEs that he was getting all bent outta shape over, I think it was less than 0.5 FTEs...

    so if we do a little quick math here, 0.5 FTEs is 20 hours of work...a front desk clerk makes like $13-15/hour (I could be off on that, but think I'm in the ballpark)...so that's a labor overage of $260-300 for a week...again I have mentioned many times about 5 figure expenses not being rounding errors at the end of the year, so I don't even know what to classify $260-300 as...

    this is just another example of not worrying about the big picture things (gaming revenue, hotel occupancy...you know shit that actually drives the big numbers in the business), but worrying about the very, very small details...again I'm not saying businesses should ignore different aspects of the business...im saying that they should focus the bulk of their energy on "big ticket" items...as I have stated before, the evil empire was great at focusing on the minutia and ignoring the big glaring problems that were out there (at least where I worked)...guessing it's because they knew that they couldnt solve the big problems since they were structural in nature...drove me fucking insane...

     
    Comments
      
      Hockey Guy: Absolutely love the stories. Just thought you should know.
      
      go_buccos: Me too. Keep ‘em comin’!
    Last edited by GambleBotsChafedPenis; 11-27-2017 at 03:34 PM.

  11. #31
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    thanks guys appreciate it...im sure while these stories are not able to be verified by druff, if you've ever dealt with an evil empire property you can see that these stories are pretty much par for the course...no need to exaggerate because the cheapness is real...

     
    Comments
      
      Kilgore Trout: I can vouch for this, after my own contentious CET experiences. Keep up the great posts.

  12. #32
    Quote Originally Posted by Sanlmar View Post
    Quote Originally Posted by AhoosierA View Post
    For the record

    EBITDA = Earnings Before Interest, Taxes, Depreciation and Amortization
    Lawyers and accountants are just artists that use the law and numbers as their medium of expression. Both are apt to get all avant-garde if left to their own devices and you have no fucking idea what youíre looking at.

    Accounting is not science - itís art

    EBITDA is just an attempt to establish a Pantone color that can be agreed on by those that read/interpret the report.

    I think I would enjoy a ChafedPenis hawt take on the Caesars financial engineering jesus, Gary Loveman.

    In the end you died for his sins.
    If the real books were used for publicly traded stocks, I think most stocks would lose 50-75% overnight.

     
    Comments
      
      Tellafriend: This

  13. #33
    Quote Originally Posted by snake_in_the_ass View Post
    Quote Originally Posted by Sanlmar View Post

    Lawyers and accountants are just artists that use the law and numbers as their medium of expression. Both are apt to get all avant-garde if left to their own devices and you have no fucking idea what youíre looking at.

    Accounting is not science - itís art

    EBITDA is just an attempt to establish a Pantone color that can be agreed on by those that read/interpret the report.

    I think I would enjoy a ChafedPenis hawt take on the Caesars financial engineering jesus, Gary Loveman.

    In the end you died for his sins.
    If the real books were used for publicly traded stocks, I think most stocks would lose 50-75% overnight.
    finance is just fucking AIDS...like seriously, just tell me how much people paid you to do what you do and what you spent to get those revenues and the taxes you paid on those revenues...it shouldn't take me weeks to dig through your filings to figure out what the fuck you actually profited or lost in a given quarter or year...granted there are a shitton of people who can do it a lot faster than that, but it shouldn't take more than a couple of hours...

  14. #34
    placeholder for future stories: monthly reports, "suggesting" your way to more revenue, busted carts

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