ESPORTS DISCUSSION

A discussion paper into the market & FaZe Clan August 2019 $1.1b MARKET ANALYSIS 2019 total Esports revenues +26.7% year on year

$456.7m +34.3%

$251.3m +41.8% $189.2m +14.8%

$103.7m $95.2m +22.4% -3.05%

Sponsorship Media Rights Advertising Merchandise & Gamer Publisher Tickets Fees Excluding revenues from betting, fantasy league, and similar cash-payout concepts, as well as revenues generated within games.

New investment coming in from outside the sport is being matched from within. Similar to the 1. POPULAR VICTORIES INCREASED INCREASED “Money-maker” effect that was seen in 2003 in POPULARITY REVENUE 2. LARGE PRIZEPOOLS the world of poker, where poker saw the first- place prize more than quadruple over three years markedly increasing its popularity, Esports (in particular ) are attempting to do Figure 1: ‘Money-maker’ pathway the same. Figure 2:

RECENT ESPORTS INVESTMENTS IS BOOMING Companies and fans investing titles due to strong financial backing, capital investment has gone into ▪ Fortnite managed to raise money into sport, competitions and Manchester City and Saint Esports teams since 2013. Teams over $100m for its players is nothing new. With Germain are examples of changing are currently competing to establish competition prize pool for expanding social media, media the status-quo as a result of strong themselves as the ‘Dallas Cowboys’ three years 2018-2021. rights and global reach, the number financial backing and interestingly or the ‘New York Yankees’ of of leagues turning over $1b in these two teams are two of the Esports to effectively guarantee ▪ Total prize pool of $113m revenue is ever increasing. Over the most active and successful themselves a sizeable share of the for all other competitions in last couple of decades, substantial professional sports teams in the market for the foreseeable future. 2018. investments have seen sports teams Esports world. There have been multiple funding transition from being successful due rounds for most teams competing at the top of their divisions as they ▪ Total prize pool is expected to their historic roots to being Another example of financial successful due to their financial support resulting in success in more look to capitalise on the money to reach over $400m by flowing into the sport. 2022. muscle. Financial clout has led to a recent times is the promotion of widening of the gap between Wolverhampton Wanderers to the teams, thereby introducing a phase English Premier League in 2018 Shareholders appear to have a ▪ First place prizes already of dominance which looks unlikely following its backing from Chinese mentality that it is better to own exceed those at Wimbledon, to wane soon. owners and subsequentially 10% of a company valued at $1b The Masters and the securing the highest points total by than 100% of a company valued as Daytona 500. Over time, and periods of success, a newly promoted team since $100m. financial muscle brings expanding 2001. ▪ $34m is the total prize pool fan bases, notoriety from success for the 2 International and an increase in the of Large amounts of investment is 2019. income from sponsorship, media now being seen in the Esports rights and tournament wins, world. thereby increasing the value of a team and making it self-sustaining. The universal excitement to be part of an Esports team competing for This can be seen, most notably, in titles in an exploding sector is sports without a salary cap, like driving investment, the scale of soccer, where teams with relatively which is surpassing many other little history of success have won mainstream sports. Over $3.3b of . 2 Figure 3: International

MARKET ANALYSIS

2016 2017 2018 2019 Wimbledon Singles winner (£m) 2.00 2.20 2.25 2.35 Masters Men’s winner ($m) 1.80 1.98 1.98 2.07 Daytona 500 winner ($m) 1.50 1.50 1.58 1.58 Asia has the largest 79% of viewers are YouTube and Dota 2 International online population under 35 years-old audiences are larger than winner (team of 5) ($m) 9.14 10.86 11.23 13.50 HBO, Netflix and ESPN combined Table 1: Comparable tournament prize winnings, Source: Individual tournament websites Figure 4a, b, c: Viewership Statistics

The growth in media rights is This number is expected to As the popularity increases COMPARABLE expected to provide the driving increase, reaching over 275m younger viewers will start force behind the increased by 2022 with a total media watching each year and fans at the BROADCASTING revenue in Esports. Similar to audience of 550m, due to the top end of the age range will not other sports with more and more demographic of Esports fans, stop supporting the sport as they RIGHTS networks and online broadcasters increasing popularity of gamers, get older, therefore expanding the wanting to get into televising (or increasing prize pools and audience. ▪ EPL £3.0b per season online streaming) matches, this is media rights. expected to occur in Esports as A single Esports fan provided an well. Amazon Prime will be Over 15% of millennials watch average revenue of $5.50 in 2018 streaming their first premier Esports on a monthly basis. This from merchandise sales and league games for the 2019 season. will increase over time as fans subscriptions. expose others in their age This gives an audience of 550m ▪ NFL $6.5b per season There is currently a monthly range to Esports and it viewership of over 167m in becomes ingrained in popular people a value of over $3b. Esports [1]. culture.

2017 Revenue ($600m) 2022 Predicted Revenue ($7.5b)

Other Other 7% ▪ Esports expected to be $3b by 17% 2022 Advertising 14% Sponsorship Sponsorship 38% Local 35% 4% Advertising 21%

Media Rights Tickets Media Rights 40% 9% 15%

Figure 5a: Esports industry 2017 revenue streams Figure 5b: Esports industry 2022 revenue streams Source: Goldman Sachs Equity Research

[1] Goldman Sachs Equity Research, 12th October 2018 3 Figure 6: FaZe Clan Fortnite squad

FAZE CLAN SUMMARY

Social Media

Fig. 7 compares the 12 teams listed in an article by Forbes FaZe Clan is an American Esports team with a significant presence on social media as well as an e- (the Forbes article, October 2018) against their social media commerce arm. Founded in 2010, FaZe Clan has entered over 250 tournaments and its social following per platform. It is very clear that FaZe Clan’s social media following is greater than any of its competitors. FaZe Clan is primed, with one of the biggest following is significantly greater than all other Esports teams fan bases in Esports, to establish itself as a global franchise similar to the New York Yankees. with a total following of more than double any other team. A limitation with this graph is that it doesn’t account for The current largest revenue stream in Esports is from sponsorship (Fig. 5a). The main reason for potential overlap across different platforms; however, this sponsoring is the number of people that can be impacted and the audience that will be reached. In doesn’t affect FaZe Clan’s results significantly. This is because the gaming world, publicity and fame not only come with success but with social media publishing the followers from YouTube (the most valuable following) and content. The most valued platforms are YouTube and Twitch, both of which are video alone is greater than the total following of all other teams, but streaming platforms. one.

Spread of followers including FaZe Clan YouTube is the primary platform used by gaming teams and players to distribute their content and earn revenue from 18000 their social media accounts.

16000 • The revenue from a YouTube channel is strongly based 14000 on the daily views, rather than subscribers. 12000

10000 • Daily views are strongly correlated to the number of subscribers, but views earn the channel advertising rates. 8000

6000 FaZe Clan is significantly further ahead of the competition in this category and, therefore has the most valuable channel. Number of followers thousands of followers Number 4000

2000 Scale up potential; PewDiePie, the most followed gaming

0 streamer, has been included to show the potential of a FaZe Gen. G Immortals Counter 100 Envy Team OpTic Team FaZe Clan Clan’s channel if audience engagement continues to grow. Esports Logic Thieves Gaming Liquid Gaming SoloMid Gaming Youtube Instagram Facebook Twitch In a sector dominated by sponsorship, media rights and Figure 7, Source: Individual Team Social media pages advertising it will be teams like FaZe Clan with the larger Total followings who, not only shape the sport, but also command Daily views Monthly Equivalent annual Team subscribers the greatest percentage of revenues, provided they are also (k) earnings ($) earnings ($) (m) reasonably successful ‘on the pitch’.

PewDiePie 98.30 18,000 1,020,000 12,240,000 • In the early days of a sport like this, where social media plays such a prominent role, it is not just success which determines popularity, but the quality, relatability and FaZe Clan 6.90 1,000 55,000 660,000 style of their online profile.

Team • FaZe Clan seem to be mastering this. 2.20 112 6,500 78,000 SoloMid 100 As more money and more fans come into Esports this is a 0.46 118 5,900 70,800 Thieves factor which will maximise the profitability of FaZe Clan and its potential to be one of the first household names in the sport. Fnatic 0.49 119 5,900 70,800

G2 Esports 0.22 72.5 3,900 46,800 Esports Results

Whilst FaZe Clan’s social media presence cannot be denied Cloud9 0.37 54.6 3,000 36,000 and certainly not ignored, it has less appealing figures when looking at their Esports tournament success where it ranks Team 16th among Esports teams for total prize money earned 0.29 30 1,600 19,200 Liquid ($7.54m) over the team’s entire history.

Optic 1.50 12.6 590 7,080 Gaming Table 2: YouTube Channel summaries across Esports teams, Source: Youtubermoney.com 4 GAME PARTICIPATION

Number of Prize FaZe Clan No. Game tournaments money ($m) Participation 1 Dota 2 1172 181.78 No 2 CS: GO 4207 80.40 Yes 3 Fortnite 387 71.51 Yes League of 4 2327 68.16 No Legends 5 StarCraft II 5450 30.82 No Heroes of the 6 451 18.03 No Storm 7 838 17.64 No 8 Overwatch 658 15.95 No 9 Counter-Strike 979 13.47 No 10 PUBG 152 12.40 Yes Figure 8: 2 of the games FaZe Clan has a team for Table 3: Top 10 games ordered by tournament prize money, Source: esportsearnings.com

Of the six games in which FaZe Along with Fortnite, it is games Focusing on The Gamers Clan competes, only three like FIFA and with (Counter-Strike: Global Offensive huge followings that have given When looking at the personnel on FaZe Clan Esports (CS:GO), Fortnite and PUBG) are FaZe Clan its large social media the teams there are two distinct in the top 10 games ranked by fan base; however, these games groups of gamers; Games total prize money awarded. aren’t profitable in terms of Notable omissions from its list are winnings. 1. Those who enter Dota 2 and competitions and make their ▪ Counter Strike: Global which are 1st and 4th on the list money from prize money; Offensive As Esports enters the of total prize money awarded at mainstream it can be expected and $181m and $68m respectively, as the games with large followings ▪ Fortnite seen in Table 3. Of the list of top will gain more sizeable prize 2. Those who may enter the players by prize money earned, pools, but for now the money occasional competition, but ▪ PUBG before the Fortnite World Cup, lies elsewhere. their social media presence is the top 38 all play Dota 2. what drives their income. ▪ Call of Duty With FaZe Clan’s large social FaZe Clan is missing out presence, it will be a prominent This divide is also present within significantly on success and prize ▪ FIFA part of Esports for the FaZe Clan, with a significant money by not participating in foreseeable future; however, number of gamers in each section. certain games. dynasties and great franchises At the current stage of Esports ▪ Tom Clancy’s Rainbow Siege are not solely built on the size there are very few personalities who cross the gap and make By not entering the most of a fan base. The wealthiest significant money from both profitable competitions, it is no teams in sport today, from tournaments and social media. surprise that FaZe Clan doesn’t Manchester United and Real have a single player who has won to the Dallas Cowboys over $1m throughout their career. and the New York Yankees, have all had their moments in 11 other teams have a total of 48 The current state of Esports the sun, typically in the players who have passed the means that unless you are winning formative years of their million-dollar mark. With the the top competitions then there is respective sports, where they $100m dollars raised for the prize relatively little income to be have dominated. pool by Fortnite, of which only earned. This income figure can be $20m was distributed in 2018, dwarfed by the top earners on Fortnite can be expected to rise • That is how a loyal, vocal social media platforms. from its 4th place ranking in prize and sizeable fan base is money offered. FaZe Clan will be built and that is what FaZe well placed to take some of this Clan must ensure becomes prize money with the current 2nd, the case over the next 3rd and 4th most successful decade. Fortnite players.

5 Figure 9a, b: Sommer Ray, JuJu Smith-Schuster

FAZE CLAN TEAM

Pos. Years Times Instagram Engagement Engaged in NFL in Pro Followers followers Bowl (m) Odell WR 5 3 13.56 3.26% 442,190 Beckham Jr Tom Brady QB 19 14 6.39 7.57% 483,976 Youth Pop Gaming Cam Newton QB 8 3 4.16 1.95% 81,161 Culture Content Icons Streamers Russell QB 7 6 3.89 1.53% 59,514 Wilson JJ Watt DL 8 5 3.63 2.30% 83,555 Antonio WR 9 7 3.35 1.13% 37,910 Brown Rob TE 9 5 3.31 4.27% 141,213 Esports Gronkowski Tournament Ezekiel Elliott RB 3 2 2.78 4.66% 129,408 Players JuJu Smith- WR 2 1 2.74 5.49% 150,647 Schuster Dez Bryant WR 9 3 2.32 1.37% 31,724 Figure 10: FaZe Clan team strategy Richard DB 8 4 2.04 1.41% 28,777 Sherman

Table 4: Most followed players in the NFL, Source: socialblade.com

Personalities: o For every 100 bits Lifestyle Icons his breakout season, he also placed Personalities with a viewership eclipsing donated to a FaZe Clan has also branched out 10th in shirt sales in the entire the majority of their rivals can earn up to broadcaster the channel into the world of lifestyle icons. league. JuJu has quickly shot to $12m on YouTube receives $1 and 100 bits Whilst this may be considered a fame as can be seen from his just from running adverts. The income can be purchased for departure from their profile in the Instagram followers: he is 9th in stream is slightly more complicated on $1.40. A typical FaZe world of Esports it is another the league. This places him in the Twitch. Channels receive an income Clan channel could huge market which they can have company of some of the greatest from adverts and there are two other receive over $2,500 a a foothold in. The most notable of and most established players in the streams purely supplied through Twitch. month in donations; these icons is Sommer Ray, who league currently, whilst also however, some had 15m followers before joining beating a significant number of • Firstly; subscriptions, these channels can make Faze Clan in July 2017 and now other top players. One attribute of have three tiers: more by offering has over 21m followers on significant interest is the level of exclusive benefits, like Instagram alone. She is an engagement that he has from his o Tier 1 costs $4.99/month and personnel snapchat American fitness model who fans, with a percentage of 5.49%, entitles the subscriber to handles, in return for a regularly posts workout videos second to only Tom Brady. JuJu’s exclusive content, chat donation of a certain with a predominantly male Instagram followers have also rooms, ad-free viewing, alerts size. Though a lot of follower base. FaZe Clan have more than doubled in the last year and emoticons; personalities believe this significant potential in the media from 1.2m in June 2018. This is isn’t in the best interests and influencer market. likely due to a his on field o Tier 2 costs $9.99/month and of the fanbase and so performances and social media provides 1 extra exclusive are much less active in Another icon signed up, after an activity likely being helped at every emoticon; and requesting donations. impressive first season in the stage by FaZe Clan. NFL, is JuJu Smith-Schuster in A channel with c.50,000 followers 2018. The Pittsburgh Steelers’ This branch of FaZe Clan o Tier 3 costs $24.99/month and 500 subscribers can expect an wide receiver is one of the most demonstrates the breadth of their providing 2 extra exclusive income of $3,000/pm, but this can popular players in the NFL. He talent management and, combined emoticons. increase to over $0.5m pm for the finished 5th in the league for with their demonstrated success in top streamers. Whilst this income receiving yards in his second building a brand, shows the power For a channel with over 1,000 stream is sizeable, the majority of season. This was partially helped they have across content creators, subscribers Twitch typically splits the income on YouTube and by the Steelers’ starting receiver, influencers and icons. The success the proceeds 70% for the channel Twitch comes in the form of Antonio Brown, sustaining an FaZe Clan has seen has also lead (the personality) and keeps 30% as sponsorships. Increasing revenue injury. Antonio, who is widely to being approached by other high commission. The most popular requires a high level of engagement considered amongst the best wide profile figures from the NFL and Twitch channel can have around from the audience. Revenue can receivers to have played the game, NBA and even rappers enquiring 50,000 subscribers. eclipse $1m/pm for streamers such left to join the Oakland Raiders, as to how FaZe Clan can help as Ninja who have 14 million leaving JuJu as the first choice. them. • Secondly; donations: Twitch followers. Signing with FaZe Clan wasn’t only followed by a significant This is an area where FaZe o This works with fans improvement in JuJu’s on field dominates, having an estimated purchasing ‘bits’ (effectively performances; following …. annual income for their gamers’ Twitch’s currency) and channels of over $4m solely from purchasing donations with Twitch. these bits to give to 6 personalities and channels; ……… RECENT PRESS

Figure 11: New York pop-up queue

On the 28th July 2019, straight making it the most successful FaZe Clan recently got into a legal after the Fortnite world cup, FaZe tournament in the team’s history. dispute with one of their most Clan signed a 13 year-old deaf girl, Winning prize money from the profitable gamers, Turner “” Press: the first female to join the team. solo competition was: Taylor, he is one of the few She is more of a streaming gamers who not only has a large FaZe Mongraal (13th, $150,000); personality than a tournament online following (11m YouTube and ▪ First female; FaZe gamer, having streamed with some subscribers) as well as a significant FaZe Dubs (15th, $150,000). Ewok, 13 year-old of the biggest names around. level of tournament success deaf girl Notably she played with Tyler In the duos competition: ($575,000). Tfue signed a contract “Ninja” Blevins despite him with FaZe Clan in 2018 and announcing that he would not be FaZe Mongraal (6th, $225,000) subsequently exploded onto the ▪ $1.5m in winnings at streaming with female players, winning with an outside partner; Esports scene becoming one of the recent Fornite demonstrating how she is one of and the most viewed streamers on FaZe Dubs and FaZe Megga (7th, World Cup the biggest personalities in the Twitch and winning several industry. When looking at this $187,500 each). Fortnite tournaments. The dispute decision from FaZe Clan, it clearly originated from Tfue stating that ▪ Dispute with Tfue A significant part of the prize the contract was oppressive and represents smart marketing. In an money came from FaZe Cizzorz environment where female gamers st hence breaks the law. The (1 , $336,000) who led a team in contract entitled FaZe Clan to don’t tend to enter or win the creative competition to tournaments as regularly as male 20% of all prize money won, 50% victory. This competition is more of Tfue’s merchandising and 50% gamers, yet as the audience isn’t for fun and views where Esports dominated by male viewers it of appearance fees with FaZe personalities and content creators Clan paying Tfue 20% of all FaZe opens FaZe up to a wave of new took part. Interestingly, all, but fans from aspiring female players. clan merchandise with which two, of the top 10 from the solo Tfue’s image was used. The claim This cannot be viewed solely from tournament were not a smart business strategy either, it is that both sides owe money to representing a major Esports the other, but is primarily that shows progressive thinking in a team. The success from the way other teams are yet to catch Tfue believes FaZe Clan should tournament wasn’t the only not be entitled to as high a up on. There was no pressure on positive; FaZe Clan opened a Esports or FaZe Clan to improve percentage of his income, whilst pop-up store for the weekend FaZe Clan maintains that his the female side of the sport. In that resulted in a huge turnout FaZe Ewok, FaZe have signed a income would not be as high if it from fans. So many people was not for their involvement streamer who has more Twitch showed up that police had to followers (230k) than a lot of their since his contract was signed. The close off 15 blocks due to the size court case and the loss of Tfue other current content creators, of the crowd. making her a valuable asset. are both damaging to the brand of FaZe Clan, but the team seems to Figure 12: FaZe Ewok be putting the trouble behind At the recent Fortnite World Cup them. representatives from FaZe Clan took home $1.5m in prize money, 7 Last 3 years Last 3 All time prize Tournaments Main Game Income COMPETITORS Teams prize money years money ($m) Entered Source ($m) Rank 1 33.71 1584 31.19 2 Dota 2 AND SIMILAR 2 OG 33.41 789 23.43 1 Dota 2 3 22.86 63 9.23 4 Dota 2 TRANSACTIONS 4 Fnatic 14.09 841 8.80 8 CS:GO 5 13.96 166 7.96 9 Dota 2 6 Virtus.pro 13.64 468 7.86 6 Dota 2 7 12.19 263 7.47 15 Dota 2 8 10.94 131 5.93 7 Dota 2 9 LGD Gaming 10.75 417 5.92 10 Dota 2 10 10.67 23 5.79 11 Dota 2 11 9.76 423 3.86 21 CS:GO 12 Wings Gaming 9.75 657 3.47 3 League of Legends 13 SK Telecom 9.18 191 3.45 16 Dota 2 14 Cloud9 9.16 236 3.43 14 CS:GO 15 PSG Esports 8.99 290 3.14 5 CS:GO 16 OpTic Gaming 7.81 270 2.92 17 CS:GO 17 FaZe Clan 7.56 71 2.86 13 CS:GO 18 (Danish) 6.72 315 2.41 12 CS:GO 19 Team EnVyUs 6.48 650 2.36 18 CS:GO 20 SK Gaming 6.29 481 2.34 22 Dota 2 21 MVP 6.19 351 1.71 23 League of Legends 22 G2 Esports 6.06 55 0.74 19 Dota 2 23 Team SoloMid 3.70 401 0.60 24 League of Legends 24 2.90 28 0.68 20 Fortnite

Table 8: Esports teams ordered by prize money earned, as of 2nd September 2019 Figure 15: FaZe Clan’s CS:GO 2017 team Source: esportsearnings.com

FaZe Clan’s Competitors Similar Transactions 100 Thieves:

In the Forbes article on the Esports An Esports media and entertainment provider, RFRSH In July of 2019, 100 Thieves closed market, it lists 12 different teams with Aps, sold a 35% stake in the company to a group of their $35m series B funding round, their estimated valuation and revenue. venture capitalist firms for €7m in June 2017. primarily funded by Artist Capital The valuation was based off a Representing a value of €20m for the whole company. Management which resulted in a combination of recent transactions, the post-money valuation of $160m. share of a team obtained from an • The team produced revenues of €1.8m the investment and rate of increase in year prior to the acquisition; It was valued at $90m in October market audience and revenue. Valuation 2018. A 78% rise in just 9 months. cannot be based solely off a single article, • Equates to a valuation to revenue multiple of but this provides a good benchmark for 11.1x. 100 Thieves is relatively new on the potential value of FaZe Clan of the scene having been founded in approximately 13x-14x annual revenue. • Whilst not directly comparable, as it is a 2017, but in that time, it has had 3 media platform rather than an Esports team, funding rounds raising a total of Due to the nature of the industry and what it does demonstrate is the huge over $60m. As a business, they are stage (early/growth) a multiple of expectations within and around Esports at not too dissimilar to FaZe Clan, revenue seems the most widely used the moment about this accelerating sector. A both place a major emphasis on and accepted valuation type. valuation of 11x revenue is a large multiple their digital content and e- and is due to the ever-increasing value of the commerce branches; however, in With FaZe Clan’s social profile beating Esports market. The 11x revenue valuation both these departments FaZe Clan all others in the Forbes article and is also not too dissimilar to the range is significantly further developed sharing similar prize money won by established from the Forbes report. turning more revenue and having a Cloud9, Optic Gaming, Team EnVyUs much larger fan base than 100 and G2 Esports, its value can certainly be Thieves. Hence, it could be In December 2015 Critical Hit Gaming released an placed above the $105m of G2 Esports. expected that FaZe Clan’s article which lists the top five Esports teams with the Also, due to the large social following valuation would be higher than the top team being Fnatic valued at $42.6m. A comparison and, hence, its ability to scale up in the $160m valuation of 100 Thieves. of the teams listed by Critical Hit Gaming to those in future it can be expected to have a the Forbes article shows an increase in value between valuation to revenue ratio around the 3-10x over the 3-year period. This is significant and top end of the range detailed in the demonstrates why so many investors are so keen for a report. This would place FaZe Clan’s share in the market and hence, why the valuations of valuation among the top teams. the teams are so high.

8 CONCLUSION

Figure 16: FaZe Clan’s 2019 PUBG championship winning team

Immortals and Optic Gaming: The Optic roster spot will have Conclusion: been valued as an asset and will In June 2019, Immortals acquired have contributed to the large Based on this evidence it would be Optic Gaming’s parent company; acquisition price. Optic also has easy to value FaZe Clan at 13x – Infinite Esports for over $100m. an Overwatch team, with an 14x its annual revenue. This is similar to the valuation estimated value of between from the Forbes list, adding more $60m - $80m; however, It must be noted that without the justification to a potential valuation Immortals already has an participation in of 13x revenue. However, this Overwatch franchise and leagues FaZe Clan cannot be deal has a significant number of Esports rules specify that two valued in the same way as Cloud9 layers to it. Immortal’s fan base is teams within the league cannot or Immortals. Having the one of the smallest among the top be owned by the same owner. Overwatch and League of Legends Esports teams, being less than Therefore, at the end of this franchises will improve the value 500,000 across all platforms. In year Immortals will be looking of the assets owned by a team acquiring Optic Gaming, Immortals to recoup some of the funds and the lack of FaZe Clan’s have purchased the third largest they have since spent on Optic presence in some of the top Esports team’s audience and by selling the Overwatch leagues does not help its valuation. effectively increased its social franchise they acquired from On the other hand, as was seen in media reach by over 5.5m fans. As Optic (perhaps an opportunity the RFRSH transaction, media and well as the fans, Optic will have for FaZe Clan to buy it). It is entertainment-based Esports firms acquired the producers of estimated that Immortals’ new are valued just as highly with Immortals’ social media content, value when merged with Optic respect to their revenue. Taking which will allow them to grow is over $250m, making it one of the most similar companies from their own fan base when Optic the most valuable Esports the Forbes article to FaZe Clan, an merges into Immortals. teams in the sport today. This is estimate for FaZe Clan’s worth a valuation that again matches can be made. Taking the top 3 The social media following of a up with the report from Forbes teams from the list in terms of team has a huge impact on its of the combined value of their fan base size (Team SoloMid value. Immortals and Optic. 7.2m fans, Optic Gaming 5.6m Another key reason for Immortal’s fans and Fnatic 5.1m fans), which acquisition is the obtaining of have a total prize winnings Optic’s League of Legends reasonably similar to FaZe Clan’s, Championship Series roster spot. a valuation range of 10x – 13x A single roster spot is valued at revenue seems reasonable and $50m. Immortals were unable to compares to the valuation of obtain a spot themselves and is a RFRSH at 11x revenue. This could huge opportunity for potential make FaZe Clan one of the most winnings and exposure that they valuable Esports brands in the have now acquired. world.

9 Aalto Capital Esports Discussion August 2019

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