Analysis: Settling for less (Part 2)
Part two of our look at what has happened at Betfair since Breon Corcoran took over as CEO.
In tandem with the new CEO’s streamlining of the company, it will be fascinating to see whether the exchange remains prominent as Betfair continues to push its fixed-odds sportsbook. While it is one thing to recognise the growing role in-play and other elements have in the sports betting industry, many have suggested adopting a ‘me too’ approach would unnecessarily diminish what made Betfair what it was in the first place.
Its potential acquisition of Rank Group’s Blue Square, however could have a great bearing on this with one likely avenue using Blue Square as its consumer sportbook brand and sticking to what it does best “ providing the industry’s best known and most liquid exchange product.
March’s third quarter figures showed a strong start from the fixed-odds offering, while revenues fell from the core exchange offering, but what is perhaps more telling is the fact that the statement put out by the operator is little more than a holding statement, something which Mark Davies, a former member of the company’s founding group, admits is “understandable from Breon’s perspective”.
However, he also points out: “In April it will be two years that the share price has been under £8 and it will be seven years since the share price was at £13.20 “ those are numbers which raise eyebrows.”
While the company’s stock market float in 2010 is seen by some as a key milestone in the development of the company away from its early identity, Davies is far from convinced that one can earmark any particular date when looking at the transition of the company to the point that it has been argued “the only thing the company has in common with the Betfair of 10 years ago is its name”.
The ex-senior Betfair employee agrees, noting: “I started working in the London office in the early 2000s and after a few years it had clearly become a very different environment.”
Both Davies and former employees we spoke to point to the arrival of Stephen Hill as CEO in 2003 and the influx of individuals from other industries, however Davies also recognises: “You could even argue when we set the business up we all came from outside the industry “ there wasn’t anyone other than Bert [founder Andrew ‘Bert’ Black] who had any experience of the gambling industry “ so I don’t think the lack of industry background is a fundamental issue.”
He acknowledges: “You need people who really understand the product, of course you do, but hiring people from outside the industry is a very different thing from understanding what you want to achieve and knowing where you’re going to go.”
One issue which remains is that of brand identity, something which some have suggested may be thrown into question not by the large number of exits per se, but rather the fact that many of those behind the early brand identity and brand strength no longer being with Betfair.
“I’m not sure you can easily describe Betfair’s brand at the moment, though you definitely could [in the past],” says Davies. “I think that is one of the issues “ the fact is it was the market leader in everything that was changing for the better in the betting industry and now it is mainly in the pack.
“I think it has lost a lot of the positivity already, but getting that back is not impossible by any means and I hope they succeed in doing so.”
Furthermore, despite the great number of changes in recent years, many former members of staff still regards Betfair as “a massive success story, having come from nowhere with something new and created that much value for its shareholders”.
“It’s still fantastic,” says one, “but it missed a bit of a trick and needs Breon to bring that singular focus. I don’t think it’s too late, it’s never too late, as you’ve seen with 888 and arguably William Hill, but opportunities have definitely been missed.”
Whether Corcoran’s new focus means fewer such opportunities are missed going forward remains to be seen, however few could argue he is not setting out to make his mark on the business.
This is the second part of a two-part article which features in April’s edition of eGaming Review. Part one can be found here, or click here for subscription options.