In a sudden turn of events, Catena Media has announced the immediate resignation of its Chief Executive Officer, Michael Daly. As the company navigates through this unexpected shift, Pierre Cadena, currently the Vice President of Corporate Strategy, will step in as the Interim CEO.
The departure agreement stipulates that Daly will continue to provide advisory services to Catena during the transition period, ensuring a seamless changeover in leadership. Concurrently, the corporation has initiated a process to identify and appoint Daly’s successor in a permanent capacity.
Chairman Göran Blomberg commented on Daly’s impact, stating, “Under Michael Daly’s leadership, Catena has become an active player in North America and with the actions taken during the strategic review, we have significantly reduced our debt and streamlined the organization.” He also pointed to the current phase of implementing growth initiatives as a period when fresh leadership would be pivotal for propelling Catena forward into a new phase of its corporate journey.
Daly’s trajectory with the media giant began in April 2018 when he signed on as the General Manager for the US sector. He progressed through various roles including General Manager for the Americas and President for North America, before assuming the CEO position in March 2021. Daly’s rich career prior to Catena included prominent roles as an industry consultant, Executive Vice President for North America at GAN, and Vice President of Online Gaming for SHFL Entertainment. His experience is further backed by senior positions at Bally Technologies and a tenure with Shuffle Master.
The announcement of Daly’s exit comes hot on the heels of Catena releasing a set of disappointing financial results for the year 2023. A steep nosedive in revenue, particularly a concerning 21% drop in US revenue to €67.1m, poses potential challenges ahead given that the US accounts for 80% of Catena’s total revenue, amidst its presence across 27 North American jurisdictions.
The company’s generation of new depositing customers also saw a downturn, reporting a 19% decrease to 184,257. This decline was moderately offset by less dire results in the first and second quarters of the year. More troubling, however, was the revealed 47% decrease in adjusted EBITDA from continuing operations, plummeting to €25.4m and reflecting an adjusted EBITDA margin of 33.0%.
After the financial results became public on 13 February, Catena’s shares experienced a precipitous drop, with a striking 10% fall on the day of the announcement and a year-on-year dive of 75%.
Despite the underwhelming performance and share reaction, calls for leadership change, such as those from STS founder Mateusz Juroszek who suggested an executive overhaul and asset sale, Daly did not immediately suggest an impending departure. However, there had been speculation about his potential exit circulating in the background.
In a stance of resilience, Daly had earlier emphasized the prospects of Catena’s new investments resulting from a strategic review initiated in 2022. He was hopeful these investments would redefine the company’s technological core. Additionally, he had highlighted a cost reduction program estimated to save around €4m, aiming to “optimize group operations,” particularly following the offload of UK and Australian online sports brands to Moneta Communications in August 2023.
The former CEO had cautioned that such extensive restructuring would necessitate a period of adjustment, and had appealed for patience from employees and shareholders.
Despite Daly’s optimistic outlook, his abrupt departure indicates that patience might have worn thin, whether on his own part or within the board’s ranks. As Catena Media advances, all eyes will be on how the company fares in these transitional times with new leadership at the helm directing its growth initiatives.
