Source: Infinite Esports & Entertainment was losing over $1 million a month
The final days of Infinite Esports and OpTic Gaming seem to be approaching, and one source was able to shed some light on different decisions made by the company which might have led to its downfall.
The esports and online entertainment industries were all excited back in 2017 when minority shareholder of the Texas Rangers, Neil Leibman, invested and purchased OpTic Gaming. OpTic Gaming would then soon pick up from Chicago, Illinois to move to Frisco, Texas where there were promises of content studios, apartments for staff and players, and more. Almost two years later, Infinite Esports has reportedly put their majority share up for sale for $150 million.
A high-level source communicating through an audio-based channel with direct involvement to the situation reached out to share their side after my report on Infinite Esports owing a multi-million banknote by May 31. This source wishes to remain anonymous due to professional and personal repercussions. This source is not the same person mentioned in my May 31 article.
Chaney at the wheel
Before OpTic Gaming was officially purchased by Texas Esports, Chris Chaney began pitching the idea of investing in esports to different venture capital firms in and around the state of Texas.
According to my source, Chaney approached several VC firms about investing in a different esports organization, Evil Geniuses in 2016. Those firms told Chaney no, and would only be interested in “big esports brands”. Nine months later, Chaney approached the same firms with OpTic Gaming. Once they gave him approval, Chaney then began talks with Leibman’s group. According to ESPN’s Jacob Wolf, Chaney’s Chaney Sports Group “advised on the Leibman deal.”
As soon as OpTic Gaming was acquired by Leibman, several different entities were created in order to hold equity in the deal and creation of Texas Esports. The purpose of a holding company is to control shares that said company buys and possesses.
Here is a list of the splits for each company:
- Texas Esports, LLC, and various VCs. — 77.5%
- Aurelius Esports, LLC. — 22.5%
Texas Esports, the majority owner of Infinite Esports was formed by Leibman and Ray Davis, the majority shareholder of the Texas Rangers. Aurelius Esports was founded by Ray Davis and Chaney, which was meant to be a subsidiary to Davis’ Avatar Investments LP.
As of writing, Infinite Esports & Entertainment currently owns and controls the following companies:
- OpTic Gaming
- Houston Outlaws
- Obey Alliance
- Team Allegiance
- Infinite Performance Institute
According to my source, when OpTic Gaming staff, players, and content creators began to arrive at the new Infinite Esports offices in Texas at the end of October 2017, there were “around 70 people sitting in cubicles”. This is also confirmed by Hector Rodriguez, owner of OpTic Gaming, in episode 30 of the Eavesdrop podcast.
“I walked in during the beginning phase of the Infinite offices and I was blown away.” They continued on with, “I saw about 30 people sitting at their desks either on social media or browsing the internet because they had nothing to do.”
Later in our conversation, they described a situation where a large group of OpTic and Infinite staff were sent to a competitive tournament event. According to them, this was not an unusual occurrence. “I don’t understand why 15 staff members need to go to an event. Paying for travel, lodging, and expenses for twelve extra people is one quick way to drain cash.”
All of Infinite’s expenses which include infrastructure costs, staff salaries, athlete salaries, travel, and more lead the company facing a major problem with recovering that cash. It is alleged that Infinite Esports began to lose over $1 million each month.
Leibman, Infinite Esports, Aurelius Esports, and various other investors began to question why money was draining so quickly. In June 2018, there was a meeting set up by Chaney and Ryan “OpTicJ” Musselman to discuss restructuring Infinite’s model. This meeting was organized without Rodriguez’s knowledge, and while he was away on a business trip. According to Rodriguez, he and Musselman have not spoken since 2018.
On October 10, 2018, it was reported that Chaney and 19 other employees were laid off from Infinite. Musselman assumed the position of President at Infinite Esports where he still remains. Several companies under Infinite, like GGEA, have since shut down due to Infinite’s restructuring.
Defending the GreenWall
As a final announcement of Immortals’ purchase of Infinite Esports’ majority stake remains imminent, Rodriguez is reportedly attempting to claim what he can of the OpTic Gaming brand.
According to two independent sources with direct knowledge, Rodriguez agreed to own the following percentages of these companies following the 2017 sale:
- 10% of OpTic Gaming, LLC
- <10% of Infinite Esports & Entertainment
- <10% of Aurelius Esports, LLC
As of writing, OpTic Gaming, LLC, owns trademarks over the following brands:
- “OpTic Gaming”
- “OG” logo
- “OPTIC GAMING”
When Immortals Gaming assumes their majority ownership of Infinite Esports, they will then have the majority ownership over the OpTic Gaming brand along with its attached trademarks.
An announcement on the deal is expected in June 2019.