One of the most important esports groups in the world goes public
As members of the FaZe Clan compete in esports tournaments and play Call of Duty on Twitch, it is It is well known that the (not too) secret ingredient of the company is the frequent agreements signed with the brands. Beyond the obvious collaborations with companies that produce gaming headsets and keyboards, recently FaZe Clan has sponsored products of all kinds, from Nissan cars to McDonald's sandwiches.
Not surprisingly, the AdAge site, which is involved in marketing and media, included the group among the best marketing companies of 2021. It seems anyone in the industry who is interested in creating a better bond with Generation Z is trying to strike a deal with the organization. Companies that have partnered with FaZe Clan include sports betting companies, HyperX, artist Takashi Murakami, Disney, and the top football league in the United States.
"Historically, music has been the engine of youth culture - said Lee Trink, CEO of FaZe Clan at AdAge in 2021 -; but now youth culture is gaming ". The sentiment is thunderous and it's no surprise to hear that from someone running a sports media company, but he's not wrong.
Trink has cut his teeth as president of the Capitol Records label, and now other people who have made careers in the music industry seem willing to follow in his footsteps as well. In addition to investing in FaZe Clan, Jimmy Iovine, co-founder of Interscope Records, also helped lead a round of funding for the company in 2020. The same new president and chief operating officer of FaZe Clan, Zach Katz, comes from the music industry. . US rapper Snoop Dogg also joined the organization, under the moniker of FaZe Snoop.
The more than ninety members of the FaZe Clan fall into two main categories: content creators and professional gamers. Many of the content creators, such as FaZe Deestroying and FaZe Rug, have a cultural prestige that their competitors lack. Nonetheless, the group is no stranger to controversy. A former member of the organization sued FaZe Clan over contractual differences, while a current member disowned the LGBTQ community on social media in June. However, none of these cases has held back the company's ability to transform the most charismatic gamers into influencers and consequently attract rich sponsorship deals with brands.
In 2021, a few months after winning the cover of Sports Illustrated, the group announced a merger that brought the company's valuation to $ 1 billion. The entry among the unicorns - the companies that have a valuation of at least one million dollars - could however disappear before the company goes public. Sports Business Journal cites a document from the then amended group of the Securities and Exchange Commission, the US body that oversees the stock exchange, attributed FaZe Clan a valuation of less than a billion dollars.
Even a well-funded marketing machine who does everything possible to tap into youth culture (and parental wallets) will have a hard time navigating the turbulent economy of 2022. The allure of a once booming industry has begun to wane, as startups that rely on creators fire employees and sponsorships no longer satisfy influencers. Going public during a possible recession makes the FaZe Clan situation even more difficult to manage. The company could become an inspiring example of future entrepreneurs or a story that invites caution.
This article originally appeared on sportsgaming.win US.
