Management Musical Chairs
It has become difficult to keep up with the management changes that have taken place in the gambling business. Wilf Walsh left Coral, now he’ back as a non executive director. Nick Rust has left Coral in a move to Ladbrokes and Ladbrokes has a new CEO in Richard Glyn, whilst John O’Reilly is leaving Ladbrokes. Chris Bell has already left Ladbrokes and rumour has it that he will be offered the Coral job.
That isn’t all. If we listed all the CEO’ and financial directors who had lost their jobs this last two years it would fill the page.
There is a certain irony to all of this. Shareholders who do not like the performance of a CEO often fire them only to see the shareholders of a competitor take them on. Can both be right?
We see much the same in football. Benitez lost favour at Liverpool to be snapped up by Inter Milan and Mark Hughes left Manchester City, only to reappear at Fulham. The Fulham ex-boss Roy Hodgson is now at Liverpool.
It begs the question who is causing the changes and who is judging their performance.
Look no further than the shareholders, mostly financial institutions, of whom 95% did not forecast the credit crunch and whose own performance is abysmal.
It was said that Ladbrokes’ e-gaming business was falling behind. Really? Ladbrokes e-gaming operating profits for 2009 stood at £46.1m. High rollers (mainly tele-betting) contributed £66.9m in operating profit. Judge that against other online companies who may be building market share with enormous marketing costs but are posting operating losses and you may conclude that Ladbrokes’ performance is not as bad as those companies who have yet to return a dividend to their shareholders.
It is interesting that those high rollers chose to bet with Ladbrokes and it was Ladbrokes which was able to provide the service that counts. But the City discounted high rollers as a one-off “blip”, even though history shows that Ladbrokes has been dealing with high rollers since time began.
Ladbrokes had a telephone operation in Gibraltar, principally to cater for big gamblers, long before the perceived pioneer of offshore betting, Victor Chandler.