Crown Resorts CEO Steve McCann pledges ‘whatever it takes’ to restore Melburnians’ trust

Former Lendlease chief turned Crown CEO Steve McCann says he can win back the trust of the city that built a casino empire.

20/11/2019. Lendlease AGM held at The Four Seasons hotel in Sydney. Chief executive Steve McCann during the opening of meeting. Britta Campion / The Australian

New Crown Resorts boss and former Lendlease CEO Steve McCann says he will do “whatever it takes” to regain Melbourne’s trust in its flagship Southbank casino.

But as questions arise about a regulatory break-up of the group, Mr McCann said he still wanted to see the gaming giant built by the Packer family maintain control of its Sydney and Perth properties.

While the head of the Victorian royal commission into Crown, Ray Finkelstein, finalises his October report on whether Crown is suitable to operate the casino, Mr McCann is preparing to uproot his family from Sydney and move to Melbourne.

As the CEO of Crown Resorts – subject to a few remaining regulatory checks – and of the Melbourne casino, Mr McCann is legally obligated to reside in Victoria, a requirement the royal commission found Crown had flouted in the past.

Mr McCann said he was happy to make the move because as a Melbourne native, he understood how badly Crown’s 22-year relationship with the city had been damaged by revelations of money laundering, problem gaming and underpayment of taxes.

“Melbourne is where Crown began, it is the heartbeat of Crown. We must regain that trust,” Mr McCann told The Weekend Australian.

“I am willing to do whatever it takes. I can’t change the past, of course. There are wrongdoings that we need to get past and we’re under a lot of scrutiny as a result.

“But what I can do and will do is everything in my power to ensure that they are not repeated.”

Mr McCann joins Crown from Lendlease, where he became as chief executive of the construction giant in the wake of the GFC.

Former Crown executive chair Helen Coonan, NSW Premier Gladys Berejiklian, Steve McCann and NSW minister Rob Stokes visit Crown Sydney at Barangaroo. Picture: NCA NewsWire / Jeremy Piper

There he reset the company as a global urban regeneration developer, building up a $114bn pipeline of projects around the world.

But he was taken to task by the market for a costly $2bn foray into engineering which the company has only just exited.

Although he has no experience as a casino executive, he put himself through university working as a bookmaker’s clerk.

It gave him an insight into an industry in which his family already had connections due to his jockey grandfather.

Mr McCann went on hold a stake in thoroughbred operation Vinery Stud alongside Gerry Harvey – but the casino business is a far sight from the track.

Crown is currently battling another royal commission in Perth as well as trying to achieve regulatory approval to operate its Sydney casino, after the NSW Bergin inquiry earlier this year found the company temporarily unsuitable to operate the $2.2bn property.

Crown has also been hit hard by Covid, swinging to its second-ever loss in the last financial year and suspending dividends, while its share price is trading about 25 per cent under historical levels.

But its largest extant threat remains commissioner Finkelstein’s self-admitted “parochial” reading of Victoria’s Consolidated Casino Agreement, which requires the operator of the Melbourne casino to maintain it as its “flagship” Australian casino.

It has raised the possibility the commission could force a break-up or at least force Crown to keep its Sydney or Perth operations smaller than Melbourne’s, but Mr McCann said casinos weren’t a zero sum game.

“Crown Sydney is an outstanding resort. It will attract tourism, it will attract high-end tourism and a lot of tourists that come to Australia like to spend time in more than one city,” he said.

“So I don’t think it’s a simple case of saying separating them out is in the best interest of Victoria.

“I think we need to look at how all that works, in the constraints of the regulatory environment, to maximise state revenue as well and to maximise the opportunity to continue to invest in and develop the Melbourne asset as well.”

Mr McCann’s attitude towards maintaining the cohesiveness of Crown also applies to its operating model. Given his property development background, speculation arose on his appointment that Crown would seek to shore up its balance sheets by spinning off its valuable real estate assets into an operating company/property company model.

Mr McCann said although he wouldn’t rule out the idea, Crown’s strong financial profile meant it wasn’t a necessity.

“The support we’ve had from our banks in the current environment is another very good sign that people are backing the quality of Crown’s tangible assets and business model,” he said.

“And in that context we’re not really under pressure to consider an opco-propco-type model, because we’re pretty lowly geared, but we will consider any scenario that maximises shareholder value post all these regulatory inquiries.”

Until his three school-age daughters join him in Melbourne next year, Mr McCann will pass the days working long hours to ensure Crown implements its reform program while navigating out of the Covid period.

As well as regaining the trust of the community and regulators across Australia, Mr McCann said a major motivating factor was the plight of Crown’s employees, a situation that reduced him to tears when he appeared at the Victorian commission in July.

“I’ve met a lot of young people at Crown and they are dealing with some very challenging issues,” he said.

“They are concerned about their job security in a Covid environment already, but when you add to that the uncertainty of what Crown is going through now, it is very challenging for them. I don’t think it’s fair for those people to have to suffer because of the transgressions of others, frankly, and that does trigger an emotional response.”

Additional reporting:
Ben Wilmont