FaZe Clan Is Going Public—Just as the Creator Economy Shifts

FaZe Clan is a power that is on its way to doing the unthinkable for a sports organization: going public as a listed company on the NASDAQ. Later this year, you may be able to diversify your investment portfolio by adding “FAZE” to the combination.

While members of the FaZe Clan compete in sports tournaments and play Call of Duty on Twitch, the company’s not-so-secret sauce is its high frequency of branded deals. Beyond obvious collaborations like headphones and gaming keyboards, FaZe Clan has recently helped sell everything from Nissan cars to McDonald’s crispy chicken sandwich.

AdAge declared the group one of the top sellers of 2021 for a reason. It seems as if all the marketing executives who are striving to establish a better connection with the Gen Z have already asked their assistant to try to reach an agreement. Here’s just a small sample of FaZe Clan contributors: DraftKings, Totino’s Pizza Rolls, HyperX, Takashi Murakami, Disney, the National Football League, and DoorDash.

“Historically, music was the engine of youth culture,” said Lee Trink, CEO of FaZe Clan AdAge in 2021. “But now, games are youth culture.” The feeling is pompous and it’s not surprising to hear from someone who runs a sports media company, but make no mistake.

Trink gritted his teeth as president of Capitol Records, and others who made a career in the music industry join his effort. Jimmy Iovine, co-founder of Interscope Records, not only invested in FaZe Clan, but also helped lead a round of funding for it in 2020. Artists like Offset are also putting skin to the game. The group’s new president and chief operating officer, Zach Katz, was robbed of the music industry. Even Snoop Dogg took part in the action and transformed into FaZe Snoop.

The more than 90 members of FaZe Clan fall into two main categories: content creators and professional players. Many of the content creators, such as FaZe Deestroying and FaZe Rug, have a cultural cache that their competitors do not have. However, the group is no stranger to controversy. A former member sued FaZe Clan for contractual disagreements and a current member repudiated the LGBTQ community in June through social media, but neither has hindered the company’s ability to turn charismatic players into influential and, as as a result, attract lucrative brand offers.

A few months after pasting the cover of Illustrated Sports in 2021, the group announced a planned merger of SPAC with a valuation of $ 1 billion. However, the unicorn horn may disappear before the company goes public. Sports business magazine reports that a modified FaZe Clan SEC filing places it below $ 1 billion.

Even a well-funded marketing machine that does its best to take advantage of youth culture (and parents ’pocket) will have trouble maneuvering through the turbulent economy of 2022. The brilliance has begun to fade from a industry that boomed earlier, as creator-focused startups lay off employees and sponsorships feel tenuous for influencers.

As the threat of recession approaches, LinkedIn entrepreneurs spend each other spreading lists of companies formed during recessions. Microsoft, Venmo and Airbnb did it, why can’t you do it yourself? By becoming public during a possible crisis, the FaZe Clan situation becomes even more difficult to navigate. The company could become an inspiring investment story or an exaggerated warning story.

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