Esports giant FaZe Clan acquired by GameSquare
Esports giant FaZe Clan acquired by GameSquare
GameSquare Esports Inc. has acquired Los Angeles-based esports organization FaZe Clan in an all-stock transaction, the companies announced on Friday. The deal values FaZe at approximately $ 16 million based on the current market caps of both companies.
According to an Oct. 20 Digitday report, FaZe Clan is one of the most recognizable brands in esports, with over 526 million followers across social media platforms. However, the organization has faced numerous controversies in recent months including accusations of sexism and homophobia. Its stock price has plummeted from a high of $ 24.69 in August 2022 to just $ 0.18 currently.
In May, FaZe laid off approximately 40% of its staff. Then in September, CEO Lee Trink departed the company. These challenges made FaZe an attractive acquisition target for GameSquare and other esports companies looking to buy low.
GameSquare is a publicly traded esports company based in Texas, backed by Dallas Cowboys owner Jerry Jones
The firm aims to help brands market to the competitive gaming audience through business units like Stream Hatchet and Ninja Labs.
Acquiring FaZe bolsters GameSquare’s connections with esports fans. As GameSquare CEO Justin Kenna stated:
“FaZe Clan is, to me, the only truly globally recognized brand in gaming, […] so it brings a huge audience, and I think it brings a huge amount of opportunity.”
To help revive FaZe, its creator-founders like Banks and Temperrr are returning to leadership roles post-acquisition. Meanwhile, GameSquare has brought back other former FaZe executives like Duane Jackson and Jaci Hays.
According to Kenna, going private again will empower FaZe’s founders to “drive the brand forward” without public company pressures. He wants to “get back to being the brand that it was” before recent controversies.
While FaZe’s brand power remains, experts say GameSquare must still attract sponsors to make the deal pay off. Esports relies heavily on diminishing brand deals versus recurring revenue streams.
The acquisition provides a lifeline for FaZe Clan as it aims to rebuild. With GameSquare’s diverse business mix and experienced leadership team, the company appears well-positioned to steer FaZe back on course. But transforming the embattled esports icon remains a formidable challenge.
Featured Image Credit: Photo by Yan Krukau; Pexels; Thank you!
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