GameSquare Holdings Acquires Embattled FaZe Clan

The once-thriving gaming and entertainment outfit now sets up shop under the GameSquare Holdings umbrella as part of an all-stock acquisition.

FaZe Clan, the gaming collective at the forefront of the pandemic era’s esports boom, announced an agreement Friday to sell 55% of its stock to GameSquare Holdings, a Texas-based esports company backed by Dallas Cowboys owner Jerry Jones.

FaZe, which boasts more than a billion followers across its social media channels, went public in July 2022 in a SPAC merger that valued the brand at $725 million. GameSquare’s acquisition deal comes while FaZe’s market cap sits at just $16 million. Moving forward, FaZe’s founders will retain C-suite positions, with Richard “FaZe Banks” Bengston serving as CEO, Thomas “FaZe Temperrr” Oliveira as President, and Yousef “FaZe Apex” Abdelfattah as COO.

“The acquisition of one of the biggest names in gaming serves as a perfect illustration of how we have built a powerful infrastructure with expansive scale that we can use to leverage the full spectrum of resources within the GameSquare ecosystem,” GameSquare CEO Justin Kenna, a former FaZe CEO, said. “We are also thrilled to welcome back the founders of FaZe Clan and their fans, one of the most deeply engaged communities born on the internet.”

At its peak, FaZe Clan counted a slew of notable athletes and influencers among its members, with Arizona Cardinals quarterback Kyler Murray and hoops phenom Bronny James gracing the July 2021 cover of Sports Illustrated alongside its popular gamers. Jimmy Iovine was an investor, and Offset, Lil Yachty, and Ben Simmons were all celebrity members as the brand expanded into fashion and lifestyle. “Gamers are the next generation of rock stars,” FaZe CEO Lee Trink said at the time.

Its gamers across popular esports competitions like Call of Duty, Counter-Strike: Global Offensive, Rocket League, and Valorant got so popular that members like FaZe Rug and Nate Hill signed with Excel Sports for representation. Brands like Porsche and McDonald’s were happy to sponsor a company ubiquitous in key youth demographics. But as investors and sponsors grew skeptical that esports could go toe-to-toe with traditional sports, FaZe’s stock and its fortunes plummeted.

Layoffs in February and May became a necessity after FaZe reported net losses of $28.4 million in the first half of 2023. Trink was let go last month as FaZe became a cautionary tale of the SPAC era — it was the trendiest way to go public without a traditional IPO until it wasn’t — doomed the company due to a combination of the end of the crypto boom, inflation, and investors looking for surer bets as the stock market and S&P 500 slumped.

The acquisition of @FazeClan brings together two complementary businesses to create one of the world’s leading content, media and entertainment companies focused on gaming, esports, and youth culture.

Read the Full Press Release
👉 https://t.co/gvbedZV9Bw pic.twitter.com/v8kkEh75kp
— GameSquare Holdings Inc. (@GSQHoldings) October 20, 2023

GameSquare— which secured a $10 million commitment from Goff & Jones Lending Co. to purchase FaZe stock as part of the deal— hopes that one of the biggest and most recognized gaming brands in the world with a massive global audience will offset esports’ recession and FaZe members’ controversies regarding inappropriate comments and behavior.

“I’m confident that with Tommy, Apex, and me back in charge of the brand, FaZe Clan will get back to where it was in its peak years,” Bengston said. “We grew up on the internet and understand this brand better than anyone ever could. We are grateful to have found a partner in GameSquare who sees that value in us and can help execute our vision. We’re going to produce first, talk later.”

In an era for the esports industry that decidedly values long-term stability over buzz, GameSquare figures to be FaZe Clan’s next best chance to return to its winning ways.