FC

FaZe Clan Financial Model

• Digital-native lifestyle brand and premier esports organization founded 2010.
• 350mm+ combined social media followers (Twitter, Instagram, TikTok, YouTube, Twitch).
• ~120mm estimated unique YouTube audience (owned + talent channels).
• 80% of audience aged 13–34 - a demographic that is increasingly hard to reach via traditional media.
• Revenue streams: brand sponsorship, content (ad revenue, owned + talent network), esports/gaming (prize money, digital items, league participation, player transfers), consumer products (branded merch, collabs, mass retail), and international.
• Pipeline opportunities: subscriptions, real-money gaming, live events, virtual dining, NFTs/metaverse, game publisher partnerships.
• Evolving from digital publisher to full IP engine across formats (linear series, podcasts, documentaries, music).

• ~3bn global gamers.
• 400mm+ esports viewers, growing ~8% per year.
• Global video streaming market: CAGR of 21% from 2021E to 2028E.
• Gen Z expected global income of $33tn by 2030E.
• 82% of global gaming revenue is outside North America; 76% of global esports revenue outside U.S.
• Influencer marketing adoption by U.S. marketers (100+ employees): 55% (2019) → 62% (2020) → 68% (2021) → 73% (2022E).
• No explicit TAM/SAM/SOM framing; deck positions FaZe relative to peer sports leagues by sponsorship revenue and monetization per fan.

Five disclosed revenue streams:

1. Brand Sponsorship - corporate sponsors (McDonald's, General Mills, Nissan, G FUEL, etc.); both endemic gaming brands and mass-market blue chips. 2025E target ~$145mm from brand sponsorship.
2. Content - ad revenue from owned YouTube channels and talent network channels. 2025E target ~$133mm incremental from content.
3. Esports / Gaming - prize money, digital items, league participation fees, player transfers; 30 championships won to date. 2025E target ~$17mm (small relative contribution).
4. Consumer Products - branded merch, player collabs, mass retail, NFTs. Juice WRLD collab $1.7mm+ in 24h; Murakami collab $1.2mm+ in <4h. 2025E target ~$43mm.
5. International - replication of U.S. model in APAC, LatAm, Middle East via acquisitions/partnerships. 2025E target ~$68mm (acquisition-dependent).
6. M&A - 3 unidentified future acquisitions baked into plan; $178mm of 2025E revenue attributed to M&A.
7. Emerging Monetization Areas - subscriptions, gambling, virtual dining, NFTs, etc.; $92mm in 2025E.

2020 revenue base: $38mm (actual).

• 2020 Revenue: $38mm
• 2021E Revenue: $50mm
• Social media reach: 350mm+ total followers (2021); up from 215mm in 2019 - 63%+ increase.
• YouTube unique audience: ~120mm estimated uniques.
• Social interactions: 143mm cross-platform actions - more than next 8 esports orgs combined.
• Monetization per unique fan: ~$0.42 in 2021E; target $3.52 by 2025E.
• Sponsorship examples: McDonald's, General Mills, Nissan, G FUEL deals in place.
• Consumer product sales: Murakami collab >$1.2mm in <4h; Juice WRLD collab >$1.7mm in 24h.
• Audience composition: 80% aged 13–34.
• International revenue: ~5% of total revenue despite ~50% of audience being outside the U.S.
• FaZe5 talent contest: 200K+ applicants in first edition.

• Monetization per unique fan: $0.42 (2021E) vs. NFL ~$91, NBA ~$66, NHL ~$65, MLB ~$44, and broader esports comp ~$5.
• Gross margin: 20% (2021E) → 31% (2022E) → 34% (2023E) → 32% (2024E) → 32% (2025E).
• Adjusted EBITDA margin: (38%) (2021E) → (15%) (2022E) → 7% (2023E) → 16% (2024E) → 20% (2025E).

• Positioned as #3 U.S. individual sports/esports brand by cross-platform social actions (behind only two unnamed traditional sports brands based on bar chart).
• More social interactions than next 8 esports orgs combined (143mm vs. G2 Esports at 38mm next).
• Total followers (org + athletes): FaZe 363mm vs. Lakers 242mm, Warriors 106mm.
• Moat framed as: (a) brand affinity with hard-to-reach Gen Z/Millennial cohort; (b) authentic creator economy roots (not a constructed corporate entity); (c) cross-platform diversification insulating from any single platform risk.
• No traditional esports competitor is named as a direct moat threat; traditional sports leagues are held up as the revenue aspiration benchmark.

Management team (slide 31):

• Lee Trink - CEO; 25+ years media, Capitol/Virgin Records, Kid Rock/Backstreet Boys management.
• Amit Bajaj - CFO; 20+ years finance, Centerview Partners, Bank of America, CEO of Big 3.
• Tammy Brandt - CLO; DXC Technology, Dreamscape; 20+ years legal/M&A.
• Jaci Hays - Chief Corporate Alliance Officer; GoPro, CBS Interactive.
• Kai Henry - CSO; SKEE.TV, Sol Republic Headphones.
• Jeff Pabst - CRO; Shazam, ShareThis.
• Bill McCullough - EVP Content; 11x Emmy winner, NFL, HBO.

SPAC counterparty team: Daniel Shribman (CEO, BRPM; COO B. Riley Principal Investments); Bryant Riley (Chairman, B. Riley Financial).

Transaction / use of funds:

• BRPM Cash in Trust: $173mm
• PIPE Proceeds: $118mm
• FaZe Equity Rollover: $670mm
• Total Sources: $971mm
• New Cash to Balance Sheet: $264mm (used for organic investment, M&A, transaction expenses, general corporate purposes)
• Illustrative Fees & Expenses: $26mm
• Post-transaction ownership: FaZe existing shareholders 67.9%; BRPM public shareholders 17.5%; PIPE investors 11.9%; BRPM sponsor 2.7%.
• Implied post-money EV: $713mm at $10.00/share.
• EV/Revenue multiples: 3.8x (2023E), 1.9x (2024E), 1.1x (2025E).

This is a SPAC/de-SPAC deck for an operating company going public. The appropriate model is a de-SPAC operating model - not a plain-vanilla 3-statement, not an LBO. The primary analytical work is validating the target company's operating projections and layering on transaction mechanics.

• Archetype + why: De-SPAC operating forecast + transaction mechanics model. FaZe is a multi-revenue-stream media/lifestyle business; the operating core is a multi-segment revenue P&L (like a media/entertainment 3-statement) combined with SPAC trust/PIPE sources-and-uses, pro forma cap table, and EV/revenue sensitivity. The deck's projections are management estimates (non-GAAP, unaudited); the model must stress-test them.

• Forecast horizon & granularity: Annual, 2020A–2025E (matching deck). Monthly granularity for 2021–2022 would be useful for liquidity modelling given PIPE timing assumption (Dec 31, 2021). Extend to 2027E for DCF terminal value.

• Key drivers & assumptions:
• Unique audience (fans): ~120mm (2021E); grow to 185mm by 2025E at 15% CAGR. post-2025 growth decelerates to 8–10% as platform reach matures.
• Revenue per unique fan: $0.42 (2021E); $3.52 (2025E). The trajectory implies ~70% monetization CAGR - the single most important and most aggressive assumption. Model as a separate driver per segment.
• Brand Sponsorship revenue: $145mm (2025E). drives 22% of 2025E revenue; growth relies on expanding blue-chip sponsor roster and higher deal averages.
• Content revenue: $133mm (2025E) incremental above 2020 base. YouTube ad CPM stable; talent network revenue share at ~30% of gross.
• Esports/Gaming: $17mm (2025E). minor contribution; prize money lumpy; model as flat/low-growth.
• Consumer Products: $43mm (2025E). depends on retail distribution partnerships; gross margin ~50% for branded goods.
• International: $68mm (2025E); requires acquisition or partnership in 2022E. deal not yet identified; treat as acquisition-dependent; model with/without in scenarios.
• M&A revenue contribution: $178mm (2025E). 3 unidentified acquisitions; material uncertainty; model as a contingent scenario.
• Emerging Monetization: $92mm (2025E). includes NFTs, subscriptions, virtual dining - speculative; haircut heavily in base case.
• Gross margin: 20% (2021E) → 32% (2025E). margin expansion driven by operating leverage on fixed talent/content costs as sponsorship (high-margin) grows.
• Adjusted EBITDA margin: (38%) → 20%. cost structure largely fixed (talent salaries, content production, staff); scale drives EBITDA leverage.
• SPAC cash to balance sheet: $264mm. assumes zero redemptions and full $118mm PIPE.
• Transaction fees & expenses: $26mm.
• Earn-out shares: 2.2mm BRPM shares vest at $12/$14/$16 within 5 years post-close; model dilution impact in cap table.
• Warrants: 5.75mm public + 0.17mm private warrants at $11.50 strike; model dilution.

• Scenarios (Base / Bull / Bear):
• Flex variables: (1) Revenue per unique fan trajectory (the critical lever); (2) M&A and international revenue materializing vs. excluded; (3) gross margin expansion pace; (4) SPAC redemption rate (0% assumed in deck; model 20% and 50% redemption scenarios for liquidity sensitivity).
• Bull: M&A and international revenue per plan; audience grows 18% CAGR; monetization reaches $4+ per fan; gross margins hit 35%+.
• Base: International/M&A revenue at 70% of plan (reflecting execution risk); monetization at $2.50/fan by 2025E; gross margins at 28–30%.
• Bear: No M&A or international revenue; organic-only; monetization stays <$1.50/fan; EBITDA remains negative through 2025E.

• Required sheets / outputs:

1. Transaction overview - Sources & Uses, pro forma cap table, post-transaction ownership % (with earn-out + warrant dilution)
2. Operating assumptions - audience, revenue per fan, segment revenue build
3. Revenue detail - 7 segments × 5 years (2021E–2025E); stacked column chart
4. P&L - Revenue, COGS, Gross Profit, Opex, EBITDA (GAAP and Adj.) 2020A–2025E
5. Cash flow - FCF bridge; liquidity runway given $264mm new cash
6. Valuation - EV/Revenue comps (esports + media + sports); DCF with WACC sensitivity (given loss-making near term, weight comps heavily)
7. Scenario / sensitivity - Revenue per fan × audience size matrix; M&A on/off toggle
8. Dashboard - KPIs: social reach, unique audience, Rev/fan, gross margin %, Adj. EBITDA margin %