Blackstone turns to Vegas all-star for new Crown chairman

The Cosmopolitan casino in Vegas was sold by Blackstone in late 2021. Picture: Jacob Kepler

Vegas heavyweight Bill McBeath will chair the new board of Crown Resorts.

On Friday, Crown left the ASX boards – signed, sealed and delivered into the hands of Blackstone, a week ahead of the financial year end.

As chief executive of Blackstone’s marquee asset the Cosmopolitan, McBeath took a bankrupt casino from the cellars to the penthouse on the Vegas Strip, delivering a multi-billion profit over eight years.

His involvement in Crown signals changes to the relatively new management team are likely to follow.

Burning questions remain. What date will Crown Sydney’s gaming begin now it has the license? And will the man behind the dramatic repurposing of Crown, Steve McCann take the millions of dollars in his contract and move on, or will Blackstone keep him on under what would be an even more lucrative option?

A betting man would put money on McCann taking a well-deserved bow, banking the cash and weighing up the next opportunity to lead a public company.

On Friday McCann and Chris Tynan – who ran the acquisition for Blackstone – were together at Crown in Melbourne to mark the occasion.

Asked about the opening of Sydney gaming, Tynan says it’s a live question.

“I’ve been killing Steve and his team and me and my team to get to today. From this evening onwards, from when the board changes over, that will be the first thing on the agenda for over the weekend and next week,” Tynan says.

Crown is Blackstone’s largest transaction in Asia to date. Tynan who runs real estate acquisitions for Blackstone in Australia worked closely with head of the private equity side James Carnegie. Sceptics fearing that Blackstone had tied itself into a binding agreement without all Crown’s regulatory approvals in place were wrong.

So broken was the culture and compliance that the NSW regulator described Crown as having to be blown up and built from the ground up.

McCann returned Crown to being fit for purpose in 15 months. “I don’t think there is any casino in the world that has done that in the time frame: three intense regulatory processes all at the same time and managing a takeover process as well. And that made it quite intense. It remains quite intense, so the journey is not complete,” he says.

Blackstone will replace the Crown board chaired by Ziggy Switkowski with a one led by McBeath and others with expertise in gaming, regulatory compliance, tourism and financial crime. The board will include Tynan, Carnegie and Blackstone’s head of real estate acquisitions in Asia, Alan Miyasaki.

Blackstone wants to repeat its success with the Cosmopolitan in Vegas at Crown in Sydney, Melbourne and Perth.

When Blackstone bought the Cosmo out of US style receivership, it had the oldest gaming machines and tables on The Strip. McBeath came in as part of the deal. With over US$500m additional capital invested all 3,000 guest rooms and every inch of the main gaming floor has a makeover.

Tynan says the Cosmo journey gave Blackstone the confidence to look at Crown.

“It has different challenges and is in a different jurisdiction but has that same quality and irreplaceable asset positioning that we thought the Cosmo had in Vegas,” he says.

McCann has met McBeath both in Las Vegas and at Crown. “There is a lot of experience and expertise that Bill can bring to the table and benefit Crown,” he says.

Whether McCann has the interest in taking Crown to the next step under a chairman who has recently clocked up huge success as a hands-on CEO is unclear.

Australia is a very different market to Vegas, which attracts 45 million visitors a year.

The controversial junkets which were low hanging fruit under the Packer era are gone. The new Crown Sydney was built to lure international tourists but the bigger challenge is to grow each of the three local markets. McCann says world over the industry has to work harder and smarter to attract customers.

McCann (a poker player) and Tynan held their cards close to their chests on changes to management, citing conflicts of interest ahead of the final court date.

“My job was tackle remediation, make sure we retain our license, get the transaction done, get a good result for shareholders. That phase is finished,” says McCann.

“The next phase is Blackstone is investing. They have a strategic vision and we will sit down and make sure we have the right people in the right roles and that we do supplement with the depth that Blackstone has.

“What I can say is that under any scenario, the job is not done in getting Crown back to full capability and full utilisation for these quality assets.”

And what are the chances that McBeath will turn to a former direct report at The Cosmo or elsewhere on the Strip for the top job at Crown? “It’s a great question,” says Tynan. “We want to add to Steve’s team and really the conversation about who wants to go again under a Blackstone-owned Crown is just starting now.”

Last month, as Blackstone exited the Cosmo, McBeath announced a $5,000 bonus for all staff. Could Crown staff expect the same windfall? Tynan laughs.

“Maybe that’s one for Bill McBeath in eight years’ time – ask him.”