The Chief Executive Officer of Enthusiast Gaming, Adrian Montgomery spoke on the Q3 report.

“Our disciplined focus on high-margin revenue opportunities, cost efficiencies and strategic investments like our first-of-its-kind partnership with the NFL for Tuesday Night Gaming have built Enthusiast into a fully-integrated media and entertainment company, a partner of choice for the world’s leading brands, and a dominant player in the gaming and esports world, now on the cusp of sustainable profitability,” Montgomery said.

The report showed that the company generated an all-time high gross profits, all-time high gross profit margins, all-time high in direct sales and subscription revenue.

The company’s report also shows that they generated a Q3 revenue of CAD $50.5m, which translated to an increase of CAD $7m as compared to the same period in the previous year. In the entire year, the company recorded a total revenue of CAD $148.8m as opposed to last year’s CAD $110.4m, thereby posting an increase of about CAD $38m.

Owing to the report, the company noted an increase in subscription revenue of about 50%, moving from CAD $2.5m by the same period of 2021 to CAD $3.8m this year. An earning of CAD $6.8m was reported in September from the company’s sale of their editorial properties to the GAMURS Group.

Enthusiast Gaming had earlier announce their search for a new Chief Executive Officer to take over from their current CEO, Adrian Montgomery.

In an update to their search, the company shared that they had formed a Search Committee to oversea the search and eventual recruitment. They also enlisted Russell Reynolds Associates to help in their search for a replacement. Sharing an update on the process thus far, the company said it is “deep in the process of conducting interviews and is encouraged by the quality of candidates.”

Montgomery’s departure was borne out of a call made by the company’s staff members in July, admist an internal leadership struggle. The call necessitated the largest shareholder in Enthusiast Gaming, Greywood Investments, to commence the process of replacing Montgomery and the board of directors with their own nominees.

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The letter was reportedly penned by four VP-level executives who claimed that the publicly traded company’s strategic vision, staffing issues — particularly within the human resources department — and equity distribution were evidence of Montgomery’s mismanagement.

??The current leadership of Enthusiast – notably the Chief Corporate Officer, Eric Bernofsky – responded to these worries by saying that they are unfounded. Bernofsky conveyed to the company’s workforce its dedication to them while also highlighting the “dramatically improved” financial performance of the firm as well as its status in the public markets.??

This letter is an extension of a public effort that has been waged by Greywood Investments, the largest stakeholder in Enthusiast Gaming, to oust Montgomery and the board of directors and replace them with its own nominees. Enthusiast is owned by the investment group to the extent of 9.3 percent, while the board of directors holds 5.7 percent of the company, the majority of which was not purchased but rather given as a gift.??

A representative for Greywood stated that the company was not involved in the letter that was written by the employees of Enthusiast. On the other hand, both the campaign and the employees are drawing attention to the fact that their economic interests do not correspond with those of the board.??

Greywood is of the opinion that choices are being made by the board of directors that are not beneficial to the long-term health and prospects of Enthusiast as a result of the board’s lack of financial investment and the CEO’s excessive salary. Employees raised similar concerns about the plan to give 80 percent of restricted stock units (RSUs) to the board of directors and executives in the C-suite rather than to other employees.

??It is possible that previous layoffs are also adding to the antagonism that exists between employees and management. Upcomer, the esports and gaming news site owned by Enthusiast, had its editorial team reduced in the month of March. The majority of the staff who were terminated were allegedly not given their promised yearly bonuses and were asked to sign non-disclosure agreements before they were eligible to receive one to three weeks of severance pay.??

The second quarter will soon come to a close, and all financial reports should be complete by the middle of August. It is probable that these documents will fuel the next confrontation in the current proxy struggle for control of the board of directors of Enthusiast.??

Enthusiast Gaming has a roster of players in various esports titles including Valorant, Apex Legends, Call of Duty, Rocket League, Overwatch, and Fortnite. These titles are covered by Enthusiast’s subsidiary esports teams such as Vancouver Titans, Seattle Surge, and Luminosity Gaming.

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