FaZe Clan’s future owner explains how he hopes to rein in pissed-off talent and build a sustainable influencer business

Beginning in late 2022, Nordan “FaZe Rain” Shat posted a series of YouTube videos criticizing FaZe’s leadership and spending decisions. In April, influencer Richard “FaZe Banks” Bengtson tweeted his frustrations about the esports brand he helped launch, writing, “Idk what all these corporate fucks think they’re doing,” and requesting that they “give us our brand back.”

Rather than cut off FaZe’s in-house critics, GameSquare is instead putting Bengtson in charge of the company. After the deal closes, the company plans to make him the CEO of FaZe. He would oversee the brand alongside Thomas “FaZe Temperrr” Oliveira, FaZe’s proposed president, and Yousef “FaZe Apex” Abdelfattah, set to become FaZe’s COO.

GameSquare CEO Justin Kenna, a former CFO at FaZe, said he knew he needed buy-in from FaZe talent for the deal to move forward.

“It was actually extremely important to me that we had the backing and support of the founders, and that we got on the same page,” Kenna told Insider. “These are the guys that created this brand and this audience in the first place.”

In response to the deal announcement on October 20, Bengston posted on X, formerly Twitter, that he was “excited to have the keys again” and was “praying these partners are different.”

Even with the endorsement of talent, the path forward for revamping FaZe’s business will be challenging.

Its revenue dropped 30% in the first half of 2023 compared to the same period in 2022, per company filings. FaZe laid off 20% of its staff at the start of this year as it sought “increased financial discipline.” Nasdaq recently threatened to delist the company after its stock price dipped below $1. Amid these woes, the company fired CEO Lee Trink in September.

GameSquare wrote in a press release announcing its FaZe deal that it expects to record more than $18 million in savings by cutting “duplicate corporate costs” and other expenses following a merger.

FaZe’s over-reliance on a few influencers has led to big revenue swings

Part of FaZe’s troubles stem from a lack of revenue diversification. The company has relied heavily on brand sponsorships and ad-funded content to make money despite its efforts to grow revenue in areas like esports competitions and FaZe-branded products.

Kenna aims to diversify FaZe’s business by monetizing its intellectual property through licensing deals and consumer products, and by tapping into existing GameSquare brand partners. The company owns subsidiaries in merchandising, influencer marketing, and streaming analytics.

GameSquare will also need to diversify the number of creators that contribute to FaZe’s bottom line. In 2022, one creator accounted for roughly 18% of FaZe’s total revenue, per public filings. In 2021, the same content creator drove roughly 22% of its revenue.

Kenna said he sees an opportunity to bring in additional revenue from the brand’s other talent. As of June, FaZe had around 54 esports and gaming professionals across its various teams.

“There’s a huge opportunity to monetize a lot of the other talent that have huge audiences that aren’t being monetized to the full currently,” Kenna said.

GameSquare has signed deals with other well-known gaming talent in the past year, enlisting Tyler “Ninja” Blevins to run a division called Ninja Labs. Blevins is tasked with helping innovate in areas like merchandising, marketing, content creation, and consumer products.

Kenna recognizes FaZe’s path to profitability won’t come easily.

“We understand the skepticism, and we’re not approaching this as, ‘Look at this sexy story and look at the sizzle,'” Kenna said. “How do we de-risk this? To me, that is pulling out costs, creating runway, plugging in our infrastructure, and really working closely with the founders on re-engaging audience and the brand.”