Echo restates commitment to middle market
WHILE Echo Entertainment remains ready to battle with James Packer’s Crown over the VIP gambling market, its new chief executive, John Redmond, said it will not be losing focus on the ‘‘middle market’’ mainstay of its business at Sydney’s newly refurbished Star casino.
Mr Redmond will take over from Larry Mullin as chief executive next month, less than a year after being given regulatory approval to join Echo as a non-executive director.
‘‘John Redmond brings to the job an invaluable balance of experience covering casino and entertainment management, financial management, listed company leadership and casino regulatory experience,’’ Echo chairman John O’Neill said.
He said the change of chief executive would not mean the company was abandoning its earnings targets from the just-completed $860 million revamp of Star.
‘‘The board indicated at the AGM that the targets are unchanged,’’ Mr O’Neill said.
But while Mr Mullin’s focus was on the VIP market, Mr Redmond indicated this would not be at the expense of middle-market customers, both local and from Asia.
‘‘We are going to come at this from all angles, [we’re] not just looking at this from the high end,’’ Mr Redmond said.
‘‘If you’re going to chase the high end you need to chase the base of the business too, to be able to take as much of the volatility out of the business as you can.’’
With this in mind, the $1 billion redevelopment of the surrounding Darling Harbour area – which includes a new concert hall, convention and exhibition space, as well as a 900-room hotel – is seen as a boon for the casino.
‘‘If there’s a 900-room hotel that’s been built for people to stay in to attend the convention, well guess what, potentially they’re our customers,’’ Mr O’Neill said.
Mr O’Neill said Echo had no interest in ‘‘me too’’ gambling facilities across the harbour at Barangaroo, where Mr Packer’s Crown is intending to build VIP gaming facilities as part of a luxury hotel development. But it might be interested in adding to its gaming facilities in areas surrounding Star.
Crown, Echo’s largest shareholder, did not comment on the appointment of Mr Redmond.
Crown is seeking permission to lift its stake in Echo from 10 per cent to as high as 25 per cent. Asian casino operator Genting is also seeking to lift its stake to 25 per cent.
Mr Redmond became an observer on the Echo board in September 2011 and formally became a director in March this year after receiving regulatory approval.
He has extensive experience as a casino executive in the US with stints at Caesars Palace and MGM Grand and is a non-executive director of Tropicana Las Vegas Hotel & Casino, Vail Resorts and Allegiant Travel. He said he would be reviewing his external boardroom commitments.
He will be paid a fixed salary of $2.25 million, a potential short-term incentive of $1.5 million a year, as well as long-term incentives valued at up to $1 million. As a temporary resident of Australia he will not be paid any superannuation.