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Ladbrokes boss makes the biggest gamble of his career

Jim Mullen, the chief of executive of the bookmaker, is attempting to revive
the troubled company’s fortunes through a merger with Coral

I was brought up with my grandparents,” says Ladbrokes (LSE: LAD.Lnews) chief executive Jim
Mullen, and they “would show me how to put on bets”.

“What I didn’t know at the time was my grandfather and my grandmother were
teaching me my arithmetic and fractions.

“They were putting a bet on and then I would have to work out what the
winnings were, and that was the game we played on a Saturday and a Sunday.

“I look back on it fondly as I try to do the same with my own sons now.”

Jim Mullen Ladbrokes chief executive

Mullen has been enthusiastic about gambling ever since those early maths
lessons. And Ladbrokes’
£2.3bn merger with rival bookie Coral arguably marks his biggest
wager yet.

Beleaguered Ladbrokes has lost ground to competitors in recent years and
Mullen hopes to reverse that decline by combining the company with Coral to
create Britain’s biggest bookie, a giant with about 4,000 betting shops.

Informal talks between the two companies started before Mullen took over at
Ladbrokes in April (LSE: 0N69.Lnews) . However, Mullen has been central to the deal since
taking charge of the troubled bookie, and is emphatic the merger will help
revive its fortunes.

But the tie-up faces challenges that Mullen, who will lead the merged company,
must overcome.

The biggest is securing the approval of the Competition and Markets Authority
(CMA) without being forced to sell so many shops the deal becomes
unworkable.

Some analysts have estimated the regulator could demand that Ladbrokes Coral,
as the combined business would be called, offloads more
than 1,000 shops . Mullen dismisses this as “just a farcical figure” and
adds: “I would hope that the CMA… knows that we’re doing this obviously to
grow scale in a sector which I believe is con-solidating.”

Mullen must also contend with opposition to the deal from a vocal Ladbrokes (Amsterdam: LB6.ASnews)
shareholder, the Irish billionaire Dermot Desmond. The tycoon urged
investors to block the tie-up, arguing the merger encumbers Ladbrokes’
shareholders with privately-owned Coral’s debt.

Although shareholders overwhelmingly
approved the deal last month , Desmond, who has encouraged Ladbrokes to
hire new M&A advisers to examine alternatives to the Coral deal, has
pledged to fight on. Despite that threat, Mullen refuses to criticise the
outspoken investor.

“I am happy to discuss and debate the concerns that he has, but I’m just not
quite clear what the alternative is,” he says.

Does he like Desmond? “Yes,” comes the quick reply, “because he invests in
Ladbrokes and I like my shareholders. I also like that he’s invested in
Celtic (LSE: CCP.Lnews) and it’s my hometown club.”

Born in Glasgow, Mullen, 45, is an avid fan of Celtic and enjoys betting on
Scottish football “because I think I know something about it”.

Practising his sums with his grandparents, Mullen, now a married father of two
boys, grew familiar with gambling from a young age.

“All my family went to betting shops,” he says. “I was brought up where it was
a pastime.”

After leaving John Ogilvie High School in Hamilton in South Lanarkshire,
Mullen studied computing at Glasgow Caledonian University, when he made a
killing staking a considerable portion of his student grant on Celtic
winning the double. Gambling aside, Mullen, who also has an MSc in software
engineering, funded his student days working in a William Hill (Other OTC: WIMHFnews) betting shop,
and after graduating took a job at Celtic’s rival club, Rangers, developing
its ticketing.

Jobs at advertising agencies both in Scotland and London were followed by a
spell at News International where, among other things, Mullen developed
digital strategy for Sun Bingo. He then joined William Hill’s online
business as chief operating officer in 2010 before moving to Ladbrokes in
2013 to lead its digital operations.

Mullen is refreshingly honest about the mistakes that have damaged Ladbrokes.

“We missed out in football,” he concedes, admitting that rivals “stole a
march” in developing bet-in-play products for the game.

Under his predecessor, Richard Glynn, Ladbrokes focused on building its own
in-house digital technology rather joining rivals in enlisting the expert
help of third parties such as Playtech (LSE: PTEC.Lnews) . It (Other OTC: ITGLnews) was “a brave decision”, Mullen
says, but “it didn’t work out and put us back three years”. Ladbrokes
eventually struck a partnership with Playtech in 2013.

Still, Mullen will not blame Glynn for Ladbrokes’s misfortunes.

“I got on well with Richard; he made some informed decisions and some of the
bets didn’t pay off. But I’ve been the CEO for eight months now, so you need
to starting looking at Jim Mullen,” he says.

Certainly, the new boss has been quick to develop a turnaround plan, which he
unveiled in July alongside a dividend cut.

While waiting for the CMA to investigate the Coral merger, Mullen wants to
transform Ladbrokes into a “multi-channel” business.

Quarterly results in October showed Mullen’s plan is starting to bear fruit,
with the bookie having acquired more than 20,000 new active online punters
through its shops.

However, despite that progress, the Ladbrokes boss is adamant the entire
industry
now requires respite from new regulation if bookies are to successfully
plan for the future.

Since last December, gambling firms have been hit by a 15pc tax on online
betting, an increase in the duty on gaming machines to 20pc, and
restrictions on staking on fixed odds betting terminals.

“I just ask for clear air from the government and regulators,” says Mullen,
who believes the divisive industry “needs defending by leaders who actually
love the sector”.

He is scathing of critics who he believes do not understand gambling, which
has staunch opponents.

“I just don’t like people who have never put a bet on who make judgement calls
on this sector provides,” Mullen says.

He speaks with equal passion about horse racing, where an
escalating row over racing funding could see some bookies barred by the
sport from sponsoring events.

“I will be showing up at all of the opportunities to sponsor racing until
racing tells me I’m not welcome,” Mullen says.

He warns that if Ladbrokes is forced to divert its sponsorship money into
other sports “it will take three years for it to come back [to racing]. That
would be a very, very dangerous place for us to get to.”

Ladbrokes is “fanatical” about racing, making it a natural sponsorship partner
for the sport, says Mullen.

Indeed, the first bet he can remember placing with his grandparents was on Red
Rum’s third Grand National win.

Mullen says his two sons are not bad at picking race winners, either.

“By going on the colour of silks, their performance has been far better than
mine from following the form, which is the great thing about sport.”

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