GameSquare is selling its ownership of eSports Team Complexity Gaming as it gets ready for its acquisition of Faze Clan. The sale is due to rules surrounding the ownership of multiple teams by a single organization.
Last year, it was announced that GameSquare was willing to merge with another popular eSports organization, Faze Clan. The merger is closer than ever, with shareholders giving their seal of approval to the deal this week.
GameSquare closer to merge with FaZe Clan
Yesterday, it was revealed that GameSquare had reached a deal with Global Esports Properties for the sale of Complexity Gaming for $10.36 million. The purchasing company is headed by Jason Lake, the founder of Complexity Gaming. Lake sold Complexity Gaming to GameSquare for $27 million in 2021.
GameSquare prepares to close FaZe Clan merger by selling Complexity Gaming for $10.4 million https://t.co/PU2PXoET6A
— Tubefilter (@tubefilter) March 1, 2024
The deal has major implications for GameSquare’s interest in acquiring FaZe Clan. As GameSquare already owned Complexity, there were doubts relating to a conflict of interest with one parent company handling the ownership of two major eSports teams. Now that seems to be resolved with this announcement.
GameSquare also revealed that its investors voted for the merger to go ahead with Faze Clan. The decision was unanimous and steered clear of any complications that prevented the merger. We should get the news of a finalized deal any time now, the company reports.
Earlier, GameSquare revealed that Complexity Gaming flourished during the last three years. The annual profit went up 175%, and the social media followers made a 10X jump during this time. Now that they are taking the reigns of another major eSports team, they wish to replicate the same success with it.
Why is FaZe Clan merging with GameSquare?
FaZe Clan is merging with GameSquare after a difficult year last year that saw its sales drop to an all-time low. It has agreed to merge with Faze Clan for $17 million, a starkly lower value than its valuation of $1 billion at the end of 2021.
FaZe Clan reports $53 million loss despite increased revenue pic.twitter.com/zQn6N3Sinp
— Dexerto (@Dexerto) March 30, 2023
The company suffered losses of $48 million last year and had a debt of $70 million, with its shares plummeting to an all-time low of 70 cents. This was when the company laid off its staff and fired CEO Lee Trink. There were reports of excessive spending when its major eSports teams were not making a profit.
Faze will hope the merger brings the cash flow it desperately needs. With a new leadership, we expect a plethora of changes to come, which will hopefully revive the once-poster child of eSports gaming.
