A major development in the digital content and esports landscape has been made with the recent formation of FaZe Media under a creator-led intellectual property and next generation media and technology company GameSquare (NDAQ:GAME).
FaZe Media will integrate FaZe Clan’s extensive creator talent roster and non-esports assets, operating under the leadership of FaZe Banks, an original founder of FaZe Clan who serves as CEO. This move aims to leverage the FaZe brand and enhance its presence within the creator economy.
Leadership and investment
FaZe Media has secured USD$11 million in new investment capital from Matt Kalish, who will also join the board of FaZe Media. He is the Co-founder and President of DraftKings Inc. (NDAQ:DKNG). This infusion of capital and Kalish’s involvement underscore the confidence in FaZe Media’s potential to innovate and grow within the digital media space. GameSquare intends to provide essential corporate and agency services to support FaZe Media’s operations. GameSquare CEO, Justin Kenna, will also serve on the FaZe Media board along with FaZe Banks as the third board member.
Strategic vision and objectives
FaZe Media’s primary focus is on accelerating the growth and expanding the value of the FaZe brand IP, restoring creative control to its founding leaders. FaZe Banks, whose real name is Richard Bengston, expressed his gratitude for this opportunity, emphasizing the importance of creating a fun, passionate environment for FaZe members.
The new company will refresh its talent roster and develop compelling content featuring some of the internet’s most popular personalities. This approach aims to position FaZe Media as a leading entity in the creator economy, offering diverse licensing and sponsorship opportunities across various categories and content formats including short form, long form and podcasts. Additionally, FaZe Media plans to deliver a range of products, merchandise, and events – online and in real life – under the FaZe brand To achieve this, GameSquare will utilize existing infrastructure to provide certain corporate and agency services to FaZe Media as part of the agreement.
Recent achievements and future prospects
After GameSquare’s acquisition of FaZe Clan in March 2024, FaZe Clan relaunched the brand a month later. This relaunch generated unprecedented engagement across social media platforms, with FaZe Clan becoming the No. 1 trending topic on X (formerly Twitter) in the United States.
Search interest for FaZe Clan reached its highest levels on YouTube since May 2020 and on Google since May 2019, amassing more than 350 million social media impressions. The return of Banks and the relaunch of the brand have captivated the internet and gaming community, revitalizing interest and engagement It showcases the immense demand that still exists for FaZe Clan content and exemplifies the future upside of what this reinvigorated brand could mean for monetization and revenue growth.
As part of the relaunch, FaZe Clan introduced new members FaZe Max, FaZe Silky, FaZe Jason, and FaZe Lacy, joining a refreshed roster of key talent and creators. This new lineup is expected to further boost FaZe Clan’s influence and reach within the gaming and digital content communities.
Transaction details
FaZe Media is established as a new operating subsidiary of GameSquare, with GameSquare owning 51 per cent and Kalish holding the remaining 49 per cent. FaZe Media will focus on developing a creator-led internet media company, while GameSquare retains full ownership of the esports competition assets under FaZe Esports. The board of FaZe Media will include Banks, Kalish, and Justin Kenna, CEO of GameSquare, ensuring strong governance and strategic direction. As GameSquare owns more than half, it means that FaZe Media’s financial performance will be consolidated into GameSquare’s overall financial results.
In addition, management believes that there are $18 million of cost synergies as a result of the FaZe Clan acquisition and expect a majority of these savings to be realized during the 2024 second and third quarters. As a result, GameSquare CEO Justin Kenna expects to show meaningful improvements to profitability throughout 2024 as they focus on expanding gross margin and reducing operating expenses, while continuing to drive revenue growth.
Leadership perspectives
Justin Kenna, CEO of GameSquare, highlighted the strategic intent behind the acquisition and the formation of FaZe Media, emphasizing the importance of returning creative control to FaZe’s founders. “We are thrilled to better capitalize this business for growth with USD$11 million in new capital from Matt, and to strengthen the FaZe Media board with his addition,” he said in a news release. “Matt deeply believes in the power of founder and creator-led organizations and shares the vision to return FaZe back to its roots by empowering its creators.”
Click the video below to watch Justin Kenna’s exclusive interview with Stockhouse’s “The Watchlist.”
Banks also expressed his enthusiasm for the new venture, adding, “Grateful for the opportunity at a genuine reset with FaZe Clan. Anyone that’s actually tapped-in can agree, this was long overdue. We’ve prioritized pretty much exclusively on creating a fun environment that we (as FaZe members) can find passion in, be excited about, look forward to (while we) do things we find interesting, exploring opportunities in content we feel are important/relevant to our culture/community. Partnering with Matt Kalish and GameSquare has proven paramount in this vision coming to fruition. Slowly, but surely. Exciting.”
Investors’ corner
The formation of FaZe Media marks a new chapter for FaZe Clan and GameSquare, reinforcing their positions as leading brands in the digital content and creator economy. With the backing of GameSquare Holdings and strategic investment from Kalish, FaZe Media is poised to expand its influence and capitalize on the burgeoning creator-led media landscape. Investors should keep a close eye on FaZe Media’s developments as it leverages the power of the FaZe brand to drive growth and innovation in the digital media industry and acts as a catalyst for GameSquare next phase of growth as the company targets it’s 2024 annual revenue guidance of over $100M.
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