As one of the most prominent brands in gaming and youth culture, FaZe Clan seems to be everywhere these days. But have you ever wondered who actually owns and runs this esports and entertainment empire? Let‘s take a closer look under the hood.
Origins: Born as a Call of Duty Trickshotting Team
To understand FaZe Clan‘s ownership, you have to go back to its origins. FaZe was founded in 2010 by three Call of Duty trickshotting gamers – Eric "CLipZ" Rivera, Jeff "House Cat" Emann, and Ben "Resistance" Christensen.
Back then, it was just a small group focused on innovating and perfecting the art of trickshots in Call of Duty: Modern Warfare 2. But they quickly gained a reputation for their skills and grew a loyal following on YouTube.
Over the next decade, these founders molded FaZe Clan into so much more – an esports organization, content creator hub, and massive lifestyle/apparel brand worth millions.
Current Ownership Structure: Distributed Among Founders, Investors and Executives
Today, FaZe Clan is still controlled by a mix of its original founders, early employees, celebrity investors, and experienced executives.
As a private company until 2022, FaZe Clan was owned by this blend of strategic shareholders:
- Founders & Early Employees: Approximately 20%
- Investors: Such as Pitbull, Meyers Leonard, Josh Hart – Roughly 57%
- CEO Lee Trink: Around 4%
- Other Key Executives: Less than 5% combined
But in 2022, FaZe completed a merger with a SPAC (special purpose acquisition company) to finally go public.
This deal allowed some early backers to cash out shares while raising new funds for growth. It also diluted ownership percentages across more shareholders.
Here is the estimated breakdown as of early 2023:
| Shareholder | Ownership Percentage |
|---|---|
| Founders & Employees | 10-15% |
| Institutional Investors | 35-40% |
| Celebrity Investors | 15-20% |
| CEO Lee Trink | 4% |
| Other Executives | 2-3% |
| Public Shareholders | 25-30% |
As you can see, no single entity controls a majority stake. This diverse ownership structure has strategic benefits but also risks, as we‘ll explore later.
Notable Individual Owners: Founders, Execs and Celebrity Backers
While ownership is distributed, it‘s useful to know who some of the major individual shareholders are:
- CEO Lee Trink – The CEO holds around 4% of FaZe Clan. He provides key leadership and strategic direction.
- Nick Lewin – An early investor with a 3% stake. He‘s a General Partner at VC firm Alpha Edison.
- Pitbull – The rapper was an early backer and still owns an undisclosed stake.
- Josh Hart – The NBA star bought equity in FaZe and promotes their apparel.
- Greg Selkoe – An entrepreneur who founded Karmaloop. He owns approximately 1.5% of FaZe.
Having celebrity influencers as investors has helped grow FaZe Clan‘s audience and credibility. But maintaining ownership diversity is crucial to stability.
Board of Directors: Overseeing Strategy for Shareholders
Along with its unique ownership structure, FaZe Clan also has an experienced Board of Directors to oversee corporate strategy:
- Lee Trink (CEO)
- Nick Lewin
- Daniel Shribman – An executive from B. Riley Financial
- Ross Levinsohn – Former LA Times CEO
- Mickie Rosen – Entertainment exec and promoter
- A.J. Caldwell Pope – NBA player and early investor
This Board represents all shareholders by advising on important decisions, acquisitions, and public market guidance.
Financial Breakdown: Valuation, Revenue and Growth
Let‘s look at some key financial stats to understand FaZe Clan‘s value and performance:
- Valuation: Estimated around $1 billion following the public listing
- 2022 Revenue: Projected at $52 million, up 95% year-over-year
- Projected 2023 Revenue: Over $180 million
- Key Revenue Sources
| Revenue Source | Percentage of Total |
|---|---|
| Sponsorships | 45% |
| Esports Winnings | 18% |
| Content Creator Deals | 15% |
| Apparel/Merchandise | 12% |
| Other | 10% |
With triple digit revenue growth and a strong brand, it‘s no wonder investors are clamoring for a piece of FaZe Clan.
Ongoing Challenges: Lawsuits, Scandals and Operating Losses
However, it hasn‘t always been smooth sailing for this gaming juggernaut. FaZe has faced its share of controversies, lawsuits and operating struggles:
- Founder "FaZe Banks" sued over contract disputes
- Allegations of underage gambling and misconduct
- Sexual assault allegations against a former director
- Operating losses over $20M from 2019-2021 until public listing
- Stock down over 80% since debut amid market conditions
These challenges have put pressure on management and raised governance concerns among some investors. However, FaZe Clan aims to move past these incidents and focus on expansion plans.
How Does This Compare to Other Esports Organizations?
FaZe Clan isn‘t the only major player in esports and gaming content creation. Let‘s see how their ownership and structure compares to key rivals:
- 100 Thieves – Funded by Drake, Scooter Braun and others. Managed day-to-day by founder Matthew Haag.
- TSM – Previously backed by Disney, TSM is now owned by FTX exchange founder Sam Bankman-Fried.
- Liquid – Founded and run by co-CEOs Victor Goossens and Ben Spoont. Recently raised $35M.
- Cloud9 – Has taken investments from WWE, Monumental Sports & Entertainment, and others.
Most esports organizations now have some level of celebrity backing. But FaZe Clan is one of the few that has already gone public.
The Pros and Cons of FaZe Clan‘s Ownership Approach
There are some clear benefits to FaZe‘s model, but also risks to evaluate:
Pros
- Access to capital from diverse investors
- Leverages celeb co-owners for reach
- Public listing provides liquidity and flexibility
- Management still heavily involved
Cons
- Complex structure makes governance challenging
- Allegations of mismanagement and misconduct
- Ownership battles and infighting between stakeholders
- Pressure to satisfy short-term public market demands
On the whole, FaZe seems to be making their ownership model work as they scale up. But the challenges are formidable for any fast-growing digital youth brand under the spotlight.
What Does the Future Hold for FaZe Clan‘s Ownership?
Looking ahead, here are some possible implications to consider:
- Founders and management could increase their stake if public shares continue to slide
- External investors may push for more oversight and strategic changes
- M&A is now more feasible as a public company – could a tech or media giant acquire FaZe?
- Celebrity investor hype could fade if business fundamentals falter
- Cryptocurrencies and NFTs could allow novel fractionalized ownership models
One thing is certain – it will be fascinating to watch this dynasty navigate their next era in the gaming industry and public markets.
The Bottom Line
While complex, FaZe Clan‘s distributed ownership structure and diverse leadership has been key to their ascent as a pop culture force. Lee Trink and other executives still drive the vision, but investors enable the capital and creativity needed to evolve.
If they can learn from recent struggles and maintain their agility, FaZe can succeed in sports, entertainment and the metaverse alike. But they‘ll have to keep shareholders aligned and appease finicky public markets. For all their fame, this is still the beginning of the story for FaZe Clan.
