FaZe Clan, one of the most prominent esports organizations globally, finds itself teetering on the brink of financial disaster. Recent revelations shed light on the extravagant spending habits that have pushed the company into dire straits.

FaZe Clan's Financial Woes Explained 

FaZe Clan's penchant for opulence became evident when the organization reportedly hosted an exclusive party at a San Diego nightclub. The event was designed to promote the FaZe brand and its members, with none other than popular rapper Travis Scott delivering a 15-minute performance. This came at a staggering cost of approximately $1.7 million.

While FaZe Clan did generate substantial revenue from merchandise and sponsorship deals, it was their extravagant expenses that raised eyebrows. The organization rented multiple luxury properties for its members' residences and filming sets, incurring monthly expenses of nearly $60,000. One of these homes allegedly once belonged to megastar Justin Bieber. According to company filings, FaZe's lease expenses for 2022 surged by a staggering 71 percent to reach $1.54 million.

Contracts also proved to be a significant financial drain for FaZe Clan. Content creator Nick "NICKMERCS" Kolcheff reportedly signed a three-year contract worth $500,000 annually. This contract sparked controversy within FaZe Clan, with owner Nordan "Rain" Shat suggesting that NICKMERCS' signing was a move to mitigate the fallout from the contentious departure of former member Turner "Tfue" Tenney.

These extravagant expenditures contributed to FaZe Clan amassing a debt that has now doubled to an alarming $70.8 million. This financial crisis has further eroded the organization's reputation, as it grappled with a series of controversies. One notable scandal involved FaZe members endorsing a cryptocurrency that ultimately plummeted in value, tarnishing the brand's credibility.

Also read: FaZe Clan Fired CEO Amid Plummeting Stock Prices

As the financial turmoil continues, FaZe Clan faces the specter of being delisted from the Nasdaq stock exchange. Its stock's value has dwindled to a mere $0.22, well below the required minimum stock closing price of $1.00 per share.