Gaming analytics and esports brand company Gamesquare, which has Dallas Cowboys owner Jerry Jones as one of its main investors, is reportedly acquiring the beleaguered gaming influencer company Faze Clan.
According to a Bloomberg report, the all-stock deal is worth around $17 million, a significant decline from the company’s $725-million valuation at the time of its special purpose acquisition company (SPAC) merger in July 2022 - a figure significantly less than the $1-billion figure that was suggested the year before.
At the time of writing, Faze shares are worth less than 20 cents after trading at more than $24 each in September 2022.
FaZe investors will receive around 0.14 GameSquare shares for every FaZe share they have, according to the Bloomberg report.
Under the expected agreement, GameSquare’s shareholders will own 55% of the merged company by the fourth quarter of this year, with GameSquare also having had a net loss of $8.45 million on sales of $19.2 million in the first half of 2023 in a difficult year for esports.
Since the SPAC made it publicly traded on the Nasdaq exchange, Faze Clan, posted a $ 28.4 million loss through the first half of 2023, with a $48.7 million loss from operations last year, culminating in the firing of chief executive Lee Trink last month.
The acquisition will also involve Faze leadership going back to its founders, such as Richard “Faze Banks” Bengtson serving as chief executive, Thomas “Faze Temperrr” Oliveira as president, and Yousef “Faze Apex” Abdelfattah as chief operating officer, with the Los Angeles-based FaZe Clan having been founded by teenage boys who became famous playing Call of Duty on YouTube.
Faze Clan will operate as an independent division of Gamesquare with the aim of re-engaging with its core fanbase after efforts to diversify receiving mixed results.
The family of Dallas Cowboys owner Jerry Jones and Goff Capital, GameSquare’s largest investors, have agreed to commit $10 million as part of the deal, with Faze expecting to save about $18 million in cost savings.
In April this year, Bengtson spoke out on social media regarding FaZe’s direction, saying: “Give us our brand back, you stole it in the first place, it goes to zero otherwise. You have no idea what FaZe is.”
