Opinion
The ex-poker player who played a winning hand to get Star’s top job
Elizabeth Knight
Business columnistAh McCann, you’ve done it again!
Talk about holding all the chips. When Steve McCann walked into the audition for the job of running the desperately troubled casino group Star Entertainment, chairman Anne Ward likely had only one question: how much do you want?
The consummate poker player: Steve McCann will run Star Entertainment.Credit: Peter Rae
This asymmetric negotiating position played out beautifully for McCann, who will get a package of $2.5 million base salary each year and a tasty one-off $7.5 million in bonuses, for signing on and staying there for three years.
All McCann needs to do is stay for three years, and he walks away with $15 million. He doesn’t need to meet any financial hurdles to receive this gargantuan package.
All he needs is a pulse and to keep his feet under the desk.
To put that into perspective, Star earned only $41 million in the 2023 financial year. We are not talking about Macquarie Bank or BHP here. We are talking about Star, which is so cash-strapped that it’s doing an audit on staff canteen Tim Tams.
[McCann] seems to have pulled off a great career move twice, fitting for a person who was at one time a world-ranked poker player.
Despite this profligate piece of governance spending by The Star’s board, Ward has made an expedient move, despite being stretched over a barrel.
Bringing McCann in to fix the broken Star is the best insurance policy the board can buy to ensure the group doesn’t permanently lose its NSW casino licence, which would likely trigger a domino effect on the status of its Queensland licences.
McCann was the person put in charge to fix Crown after most of its senior management and its entire board left in the wake of the money laundering scandal.
His task was to rehabilitate the company, fix its culture, put in processes to enhance know-your-customer requirements and fix lax controls over problem gamblers, among other things. His was a clean-up job of epic proportions.
In March this year, the Victorian gaming regulator declared Crown was fit to hold a casino licence.
McCann, however, left Crown in mid-2022 after it was taken over by giant US investment outfit Blackstone.
He walked away from that gig with an estimated $9 million for a little more than a year’s work.
Now he seems to have pulled off a great career move twice, fitting for a person who was at one time a world-ranked poker player.
Steve McCann managed to negotiate a top price for Crown shareholders.Credit: Bloomberg
He negotiated a remuneration package at Crown that included what amounted to career danger money, $5.2 million in sign-on performance rights, for which he would become eligible in the event of a change of control. The marvellous part of the deal McCann negotiated is that he would also receive the performance rights even if he remained at Crown.
The beauty of the Star remuneration package is that it mirrors the terms he negotiated with Crown.
If Star is the subject of a change of control (acquired by someone), then McCann gets all his bonuses and sails into the sunset with a bulging wallet.
Star Entertainment chairman Anne Ward has made an expedient move appointing Steve McCann.Credit: James Davies
Shareholders won’t begrudge McCann this clause. He managed to negotiate such an immensely good price for Crown shareholders – a price that has left its new owners, Blackstone, looking silly for overpaying.
To be fair, the Crown/Blackstone deal was negotiated before anyone had a real sense of the cost of rehabilitation and fines that Crown or Star would need to endure.
Selling Star at anything but a bargain-basement price would be quite the achievement.
But McCann has one particularly valuable attribute. He has a proven ability to deal with casino regulators. He’s a smooth operator. As such, he stands in stark contrast to The Star’s most recent permanent chief executive, Robbie Cooke, and its recently departed chairman, David Foster.
They will go down in history for picking a fight with the NSW casino regulator and entertaining a thought bubble for a class action against it - in response to Cooke’s belief that the company was under assault from the body that monitors its rehabilitation process.
Now we have McCann in The Star role, we get to see if he can fire the oven for a second souffle to rise.
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