Sheehan will remain as senior advisor
Gaming technology supplier Scientific Games Corporation announced a major senior management shakeup in which Barry Cottle, currently CEO of the SG Interactive division, will replace Kevin Sheehan as president and CEO of the company effective June 1.
Sheehan, whose two years as CEO have seen a complete restructuring and an overall positive transformation of Scientific Games’ revenue picture and balance sheet, will remain with the company as a “senior advisor.” The company gave no explanation of the reason for the management shift.
In his two years as CEO, Sheehan overhauled the management team, appointing top-flight executives to manage each of the three divisions—gaming, lottery and interactive—formed after the multiple mergers that created the current end-to-end supplier that is Scientific Games. He also is credited with loading the supplier for future growth in the emerging legal sports-betting market with the acquisition of NYX Gaming and its industry-leading OpenBet sports-betting platform.
Prior to his August 2016 appointment as CEO of Scientific Games, Sheehan had achieved success in turning the fortunes around for Norwegian Cruise Lines as its CEO, which followed other successes at Cendant Corporation, the founding of Spanish-language television network Telemundo, and a number of other milestones.
When Sheehan joined the company, multiple acquisitions had left Scientific Games with debt that hovered around 8 times EBITDA. Less than a year and a half later, it was around 6.7 times and still falling. Scientific Games’ stock price, over the same period, rose six-fold, and its bonds went from selling at a discount to selling at a premium.
“I’m proud of what we have accomplished over the past two years,” Sheehan commented in a press release announcing the management change. “Our company is stronger than ever and growing across all our divisions. With the acquisition of NYX and the rapid growth of our entire interactive business, Scientific Games is poised to lead the future as the entire gaming industry transitions to new digital and mobile platforms.
“I want to thank the Scientific Games executive team, my friends and colleagues at MacAndrews & Forbes and all of our employees for their hard work and commitment. Barry has been a great partner, and I look forward to supporting his efforts to lead Scientific Games into the digital future.”
Cottle joined Scientific Games as chief executive of SG Interactive in August 2015. Prior to that, he had been senior vice president of Disney TeleVentures, creating online experiences for Walt Disney Company; executive vice president, interactive for Electronic Arts, growing that company’s online and mobile game division; and executive vice president/chief revenue officer for Zynga, helping to build its now-enviable stable of online and mobile games.
Immediately before Scientific Games, as vice chairman of Deluxe Entertainment, he helped drive digital innovation including the launch of virtual reality in 2015.
“Innovation is the cornerstone of our strategy at Scientific Games,” Cottle said last week. “Across all our business units and platforms, we are relentless in our efforts to drive greater efficiency and adaptability to take advantage of new and growing markets. Scientific Games’ expertise and passion for innovation is an invaluable asset, as we continue to build cutting-edge technology to enhance the player experience for both retail and digital platforms.”
“Kevin took over after the successful integration of Bally and WMS and, as one company, moved Scientific Games forward and helped in driving growth across all our business units,” commented Ronald O. Perelman, Scientific Games chairman of the board, in last week’s press announcement. “I want to thank him for his strong leadership and tireless efforts that led to the company’s success over the last two years, and I look forward to continuing to work with him as a senior advisor to the company.
“Under Barry’s leadership, SG Interactive, now SG Social and SG Digital with the NYX acquisition, has become the market leader in free-to-play and online gaming and is perfectly positioned to capitalize on new markets opening up to legalized online gaming, lottery and sports betting around the world, including the United States.
In two years heading SG Interactive, Cottle led the team to double revenue growth and Scientific Games’ efforts to enter sports betting and iLottery through the NYX/OpenBet acquisition.
Along with the changes at the top, Scientific Games announced that Tim Bucher, previously senior vice president and general manager of the Consumer Solutions Group at Seagate Technology, has been named executive vice president and chief product officer across all Scientific Games’ business divisions.
Bucher is a Silicon Valley veteran who has created several successful companies which have either been taken public or acquired by tech giants including Apple, Microsoft, Dell and Seagate Technology over the past three decades. He has served in executive product roles directly for Steve Jobs, Bill Gates and Michael Dell, learning from those iconic entrepreneurs how to innovate and grow businesses.
Specializing in consumer software, hardware, and user experiences, Bucher holds over 40 patents in networking technology, user interface design, computer and processor design, and graphics and multimedia technologies. Most recently, he headed Seagate Technology’s $1.4B global consumer business, developing innovative solutions to break Seagate into new markets including mobile, drone and gaming.
Analysts were generally upbeat about the change. In a report entitled “Same Car With a New Driver,” Jefferies Equity Analyst David Katz said, “Our positive thesis remains based on the momentum in the business, which we expect to continue irrespective of the uncertainty inherent in the leadership change. We believe SGMS should continue its strong performance in most segments through the next couple of quarters. The longer-term capital dynamics are also compelling in our view.”
While Union Gaming’s John DeCree admitted to being surprised by the change and said investors would miss Sheehan steady hand, “We do believe much of the heavy lifting has been done and Mr. Sheehan’s approach to leadership, cost control, process improvement, and capital allocation is very much ingrained in the company’s DNA today.”
