Jim Mullen faces "massive challenge"

Newly appointed Ladbrokes chief executive Jim Mullen (pictured) must make sweeping personnel changes and oversee a substantial change of strategy if he is to succeed in returning Ladbrokes to the top, industry insiders have told eGaming Review.

Ladbrokes this morning announced digital director Jim Mullen would succeed Richard Glynn with the former William Hill man set to take the reins from 1 April.

But the appointment, which followed a near five-month search process, was widely described as “disappointing” by City analysts, with Cenkos Securities’ Simon French reflecting on the industry’s inability to attract an external candidate.

“As is so often the case in the gambling industry an extensive external search has yielded an internal appointment,” French said. “For us it signals more of the same when Ladbrokes is in urgent need of radical action,” he added.

The hire comes shortly after some of Ladbrokes’ biggest rivals such as William Hill and Paddy Power also opted to promote from within when searching for a new chief executive.

Ladbrokes has endured a difficult few years of late with digital profits having fallen and the company having endured a frustating migration from Microgaming to Playtech, whose technology now powers the majority of its online business.

And another analyst, who preferred not to be named, said Ladbrokes would likely fall further behind the likes of bet365 and William Hill, who aren’t reliant on third-party technology, should Mullen refuse to abandon its current strategy.

“Is the current strategy working? No. Does promoting from within suggest a change in strategy? No,” he said. “He might surprise everyone and come out and change strategy but the fact he’s already bought into it makes any material change unlikely,” he added.

Despite the reaction from the City, Ladbrokes chairman Peter Erskine described Mullen as “head and shoulders” above all other candidates while a senior exec at a rival European operator recalled a similar lukewarm reception to William Hill’s appointment of Ralph Topping.

“When Hills was a complete disaster zone under David Harding and they were expected to go out and get someone external and they appointed Ralph Topping, everyone made similar noises to those we are hearing now about Jim Mullen, and Ralph managed to turn that business around,” the exec, who did not want to be named, said.

A former member of Ladbrokes’ senior team told eGR this morning that Mullen was “the best man for the job in the current situation” while Peter Marcus, who worked with Mullen while COO at William Hill Online, said Mullen was a good strategist.

“I’ve worked with Jim and I think he is a smart strategist and understands why and how William Hill was successful and hopefully he’ll bring that mentality to Ladbrokes where it is clearly needed,” Marcus said.

“Jim also allows people to get on with their jobs – he’ll set out the strategy but allow people to do what they need to do. I’m assuming he’ll bring smart people in as they need fresh blood.

“Jim is the kind of man that will scour the market to bring that fresh blood and another thing is he’s a nice guy to work for which is important,” he added.

However, a senior executive at a multi-national egaming firm said he was “surprised” by the appointment and said Mullen would need to surround himself with “good people” if he is to succeed.

“He’s got a massive challenge on his hands and he’s starting from behind the eight-ball,” he said. “He’ll need to hire some good people but while they are tied down to a single proposition it’s going to be tough. The industry is moving in the other direction by innovating and doing more independently,” he added.

This was echoed by another senior exec also called on Mullen, who joined Ladbrokes in late 2013, to ditch its current strategy and make sweeping changes to its hierarchy.

“Either he really wants to change strategy and wasn’t allowed to, or it’s going to be same old, same old which will mean the business will be finished – they can’t carry on doing what they are doing,” he warned.

“Maybe Jim has sat there for the last 18 months thinking “what the hell is going on here” but hasn’t been allowed to make his mark or do anything about it but now has the scope to make substantial changes.

“And then there are people there that have been there too long and need to be kicked out – he needs to perform a root and branch review and make some much needed changes,” he added.

Speaking to eGR, a spokesperson for Ladbrokes said although Mullen was unlikely to radically change strategy he would take the next few months to “kick the tyres” and road test a few of his own ideas before reporting to the board later this year.

“Jim has got his own views on what we do well and what he feels we could be better at and he’ll review that over the coming months,” the spokesperson said.