GameSquare Holdings will buy the pioneering influencer company in an all-stock deal.
(Bloomberg) — FaZe Holdings Inc., the struggling video-game-influencer company with 512 million followers across social media, is being acquired by GameSquare Holdings Inc.
FaZe investors will receive about .14 GameSquare shares for every FaZe share, according to terms shared with Bloomberg News. That makes the acquisition worth about $17 million. GameSquare’s largest investors — the family of Dallas Cowboys owner Jerry Jones and Goff Capital — have agreed to commit $10 million as part of the deal. GameSquare plans to bring several FaZe founders back to top positions at the company.
GameSquare Chief Executive Officer Justin Kenna, a former FaZe executive, said in an interview that the acquisition is a natural fit because FaZe is already using GameSquare’s technology. “We can plug our infrastructure in,” he said, citing GameSquare’s media network and analytics capabilities. “There are clear synergies.” Kenna said talks of an acquisition began earlier this year and “heated up in recent months.” The company expects to realize about $18 million in cost savings.
With the purchase, GameSquare is betting it can revive the Faze Clan, which helped pioneer the way gamers and social-media influencers earn money from sponsorships and internet advertising. GameSquare operates a half dozen gaming, lifestyle and analytics companies, including the esports organization Complexity Gaming. Complexity’s chief innovation officer is gaming celebrity Tyler “Ninja” Blevins who made a name for himself playing Fortnite online. In April, GamesSquare bought the gaming analytics company Engine Gaming.
Los Angeles-based FaZe Clan was founded by teen boys who became famous playing Call of Duty on YouTube. It went public via a merger with a SPAC in July 2022 but struggled to earn money despite its enormous following. Former Faze employees have pointed to exorbitant spending, including on expensive leases in Los Angeles.
Read More: From $1 Billion to Almost Worthless: FaZe Clan Runs Out of Hype
FaZe reported a $48.7 million loss from operations last year and registered a $28.4 million loss through the first half of 2023. The board ousted Chief Executive Officer Lee Trink in September. The shares today fetch less than 20 cents after trading at more than $24 each in September of last year. GameSquare closed Thursday at $1.61.
Under the expected agreement, GameSquare’s shareholders will own 55% of the merged company. GameSquare had a net loss of $8.45 million on sales of $19.2 million in the first half of 2023. The parties expect the deal to close in the fourth quarter.
GameSquare plans to return FaZe’s founders to executive positions. Former YouTube influencer Richard “FaZe Banks” Bengtson will become CEO of the acquired company. Thomas “FaZe Temperrr” Oliveira will become president, while Yousef “FaZe Apex” Abdelfattah will become chief operating officer. Bengtson and Oliveira were executives in the company’s original incarnation. The founders will work to re-engage FaZe’s core fanbase and refresh its brand.
In April, Bengtson spoke out on social media about FaZe’s direction.
“Give us our brand back, you stole it in the first place,” he wrote on X, formerly known as Twitter. “It goes to zero otherwise. You have no idea what FaZe is.”
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.