The 86th US Academy Awards (The Oscars – to you and me!) are upon us, for this week’s cultural sections of the media have been debating the pros and cons of such heavyweight dramas such as current favourite Twelve Years a Slave and its contenders American Hustle, Gravity and Dallas Buyers Club. No doubt they are all worthy candidates to win the glittering Best Picture Prize!
However the Academy Awards judging panel seem to have neglected a real masterpiece of drama, that is riveting and compelling thousands of viewers. This story of an embattled historical company, with tense boardroom politics, angry shareholders, and daily media speculation/hyperbole could have been penned by Aaron Sorkin, the writer behind such excellent movies as Moneyball and The Social Network.
The thought of which actor would lead this stellar drama leaves me as a movie fan with my mouth salivating, with such dramatic content, only a true great could take on this leading role, Philip Seymour Hoffman would have been ideal, what a pity that such an actor never got to read this script.
I refer to the story of industry giant Ladbrokes in 2013/2014, a drama which is being acted out in front of our very eyes, and where the main actor CEO Richard Glynn faces a battle to secure not only his position, but his status amongst our industry’s leading actors.
The week of February 24 has not been kind to Ladbrokes or Mr Glynn, posting a two thirds drop in profit after tax which saw no business division witness any growth. Ladbrokes compounded further bad news with the announcement of the closure of 50 retail betting shops in the UK, in order to cut costs. These woeful headlines come as no surprise. Ladbrokes performance in 2013 led all industry commentators to speculate a dire performance update by the operator, however the real horror is demonstrated when reading such headlines as a 74.2% plummet in Ladbrokes digital business. This is the dagger used to attack Glynn as he was the man headhunted by the Ladbrokes board to bring innovation and digital marketing aptitude to the business.
Commentators further point to the lack of progress by Ladbrokes top management to define a clear cut future strategy. The company rhetoric to its pending problems has been too basic in it delivery, with Ladbrokes showing no sign of progress on critical fronts, but more importantly not demonstrating initiative as to where the company will look for growth. Ladbrokes and Richard Glynn stated that the company was overseeing major operational changes, and that the results were as expected a disappointment to its management, its operations and shareholders. Glynn stated that Ladbrokes targeted the upcoming FIFA World Cup for growth and that Ladbrokes would be operationally ready by mid 2014.
Ladbrokes shareholders are distressed, since other legacy betting competitors have reported growth or steady figures for 2013. Further criticism of management points to the operator not being able to define a unique strategy for its products and its future growth. Ladbrokes strategic partnership with Israeli based software supplier Playtech with a view to aid digital growth, was labelled by industry insiders as desperate tactic and simply duplicating a strategy undertaken by competitor William Hill in 2010. The criticism implies that the operator does not know how to even begin to tackle its own problems
For Months Ladbrokes’ woes have been reported by industry and UK business publications; however this week the operator hit boarder news casts, as it reported closure of 50 retail betting shops. The critical media attention that is being placed on Ladbrokes and its management is comparable to witnessing a mother discipline her naughty child at a busy restaurant ‘by smacking its bottom’ making it an uneasy viewing.
Ladbrokes story may be unique to igaming, as a UK Legacy brand trying to fight for its survival in a competitive and ruthless market place. Nevertheless this story is not unique to UK business, in the past years we have seen the failure of UK high-street brands adapt to having both retail and digital operations, the list of casualties is long with names such as HMV, Play and Jessops. These brands could not adapt to changing consumer habits, but furthermore could not adopt an appropriate strategy, whereby their digital enterprise would not cannibalise their high street operations.
I believe this to be the main concern in the story or script of Ladbrokes. Can the operator identify and define its issues, and adapt a clear strategy and corporate narrative to tackle the coming months. Worse news is yet to come, especially given the warning that 2014 has started very sluggishly, however can Ladbrokes management create a guiding and sensible strategy that can be filtered throughout the convoluted cogs of its business?
This cannot be answered by one man; the burning question is whether Ladbrokes have the appropriate cast to deal with its drama. This saga continues!
Operational and Marketing Strategies to be discussed at the upcoming Betting on Football Conference:-