Fanatics, Inc. Explained

Fanatics, Inc.
Type:Private
Industry:Textile, E-commerce, trading cards and collectibles, digital collectibles/NFTs, sports betting and iGaming
Foundation:2011 in Jacksonville, Florida
Location City:Jacksonville, Florida
New York, New York
Manchester, UK
Area Served:Worldwide
Products:Licensed sports apparel, trading cards and collectibles, sportsbook
Num Employees:22,000
Subsid:Fanatics Collectibles[1] [2]
Fanatics Betting & Gaming[3]
Brands:FansEdge
Kitbag
Majestic
Mitchell & Ness[4]
Top of the World
Topps[5]
WinCraft

Fanatics, Inc. is a global digital sports platform that consists of several businesses, including licensed sports merchandise, trading cards and collectibles, sports betting and iGaming, special events, and live commerce.

The company began as an American online retailer of licensed sportswear and merchandise, which operated the e-commerce businesses of major professional sports leagues and media brands, as well as hundreds of collegiate and professional team properties.

History

Michael G. Rubin is the founder and CEO of Fanatics.[6] In 1998, Rubin created an apparel and logistics company, Global Sports Incorporated, which would later turn into GSI Commerce, a multibillion-dollar e-commerce company.[7] Rubin sold GSI to eBay later that year for $2.4 billion and bought back the sports e-commerce business, which included online stores for all North American sports leagues along with hundreds of teams and colleges, keeping the name Fanatics, Inc. for the new company moving forward.[8]

The early years

In April 2012, Fanatics raised $150 million from Insight Venture Partners and Andreessen Horowitz and acquired its Florida-based rival Dreams, Inc. for $158 million in cash and $25 million in debt.[9] This move added the brands FansEdge and Mounted Memories, which was rebranded as Fanatics Authentic division.[10]

Rubin's vision was to differentiate Fanatics by serving the real-time expectations of global sports fans and partners.[11] [8] In 2014, Doug Mack was appointed CEO and Fanatics opened a Bay Area office to tap into the Silicon Valley tech talent pool.[12] [13] Mack helped Fanatics move from a domestic e-commerce business to a mobile-first, direct-to-consumer brand with its own manufacturing capabilities.[14] [15] Priorities such as real-time manufacturing, data, and technology, would guide the company's innovative vertical commerce (v-commerce) model.[15] [16]

In 2015, Fanatics raised $300 million from Silver Lake Partners and in early 2016 the company acquired UK-based internet retailer Kitbag to accelerate focus around international expansion and global soccer.[17] [18]

In April 2017, Fanatics bought sportswear and merchandise manufacturer and MLB uniform provider Majestic Athletic from VF Corporation in an effort to add to the company's growing vertical manufacturing capabilities. Nike Inc. would eventually take over as MLB's official on-field uniform partner, with Fanatics using the existing facilities acquired during the Majestic acquisition to now make Nike MLB uniforms.[19]

In September 2017, Fanatics closed a $1 billion round of fundraising led by Softbank, with participation from the NFL, MLB, NHL, MLS and NFLPA. Fanatics was expected to produce $2.2 billion in annual revenue that year.[20] The next month, Fanatics acquired Fermata Partners to transform the college licensed sports business and a new Fanatics College division was formed.[21]

In the following two years, Fanatics announced 10-year deals with Nike, the National Football League and Major League Baseball that granted Fanatics the rights to design, manufacture and distribute all Nike fan gear sold at retail for both leagues.[22]

At the onset of the pandemic in early 2020, Fanatics and MLB halted production of MLB jerseys to manufacture masks and gowns for emergency personnel battling COVID-19.[23] Using the exact same material that was previously used to make Yankees, Red Sox, Phillies and all other MLB jerseys, that fabric was instead used to make more than one million masks and gowns that were eventually shipped to more than a dozen states.[24] [25] [26]

In April 2020, Michael Rubin—with the help of Fanatics employees around the world—launched the ALL IN Challenge, one of the largest digital fundraisers in history.[23] The celebrity and athlete driven ALL IN Challenge exploded on social media and raised $60 million to provide nearly 300 million meals for Feeding America, Meals on Wheels, No Kid Hungry, and World Central Kitchen.[27] [28] [29] Also in 2020, Fanatics established the All-In Challenge Foundation, which will continue to serve as the philanthropic arm of the company.

In August 2020, the company secured $350 million Series E funding raising Fanatics' valuation to $6.2 billion.[30] [31] Using the new funds, Fanatics purchased assets from Vetta Brands, including leading collegiate headwear producer Top of the World. This acquisition saved more than 200 jobs and added significant headwear scale and capabilities.[32] [33] In December 2020, Fanatics acquired WinCraft, the preeminent licensed hardgoods and promotional products company, which increased the company's presence with non-apparel merchandise.[34]

Global digital sports platform (2021–present)

In March 2021, Fanatics secured a $320 million funding round, followed by another $325 million in August 2021 that brought the company's valuation to $18 billion as of September 2021.[35] [36] During the latter funding round, Fanatics also announced plans to evolve into a global digital sports platform through expansion into new verticals. It was reported at that time that these verticals may include NFTs, trading cards, sports betting and gaming, ticketing, media and more. With the move, Rubin assumed the new role of CEO of the broader Fanatics portfolio.[37]

In May 2021, Rubin co-founded the digital collectibles company Candy Digital with Mike Novogratz and Gary Vaynerchuk.[38] Candy Digital secured an exclusive, long-term agreement with MLB as its first content partner.[39] Later that year, Candy Digital received $100 million financing round, valuing the company at $1.5 billion. The round was led by Insight Partners and SoftBank Vision Fund2, and included NFL Hall of Famer Peyton Manning, Connect Ventures and Will Ventures.[40] In January 2022, Fanatics divested its 60% stake in Candy Digital.[41]

In August 2021, Fanatics secured long-term trading cards manufacturing and distribution rights from MLB, MLBPA, NBA, NBPA and NFLPA.[42] [43] [44] [45] A month later, Fanatics Collectibles, Fanatics' new trading cards and collectibles business secured a $350 million Series A round at $10.4 billion valuation.[46] [47] Fanatics acquired Topps, the preeminent licensed trading card brand that has serviced collectors, fans and retailers for more than 70 years, in early 2022.[48] As part of the deal, approximately 350 global Topps sports and entertainment employees joined Fanatics to operate under Fanatics Collectibles.

In February 2022, Fanatics, along with some names in sports, entertainment and culture, acquired lifestyle and streetwear brand Mitchell & Ness from Juggernaut Capital Partners.[49] Mitchell & Ness continues to operate as a separate, distinct brand within the Fanatics Commerce division.[50] In April 2022, Fanatics announced a $1.5 billion fundraising round followed by another $700 million in December 2022, reportedly pushing the company's valuation to $31 billion. During the December round, Rubin announced Fanatics would be expanding into a third vertical in 2023, Fanatics Betting & Gaming.[51] [52]

In May 2023, Fanatics bid to acquire PointsBet's U.S. business for $150 million, marking Fanatics' first move into the U.S. sports betting industry.[53] In June 2023, Fanatics increased the offer to $225 million to outbid DraftKings after that company made a competing bid of $195 million. The first wave of the deal closed in August 2023 in eight U.S. states and started the brand transition from PointsBet to Fanatics Sportsbook[54] [55]

Fanatics expanded its international footprint for the Commerce business with the acquisitions of Italian sports merchandise company Epi in April 2023, and Latin American sports wholesaler Fex Pro in June 2023.[56] [57]

Businesses

Fanatics Commerce

The Commerce division under CEO Andrew Low Ah Kee designs, manufactures, and sells licensed fan gear, jerseys, lifestyle and streetwear products, headwear, and hardgoods.[58] The business operates digital and physical retail locations across leagues, teams, colleges, and associations globally, as well as the flagship site, Fanatics.com.Fanatics has online, sports venue, and vertical apparel partnerships worldwide with all major professional sports leagues and hundreds of collegiate and professional teams, including the NFL, NBA, MLB, NHL, MLS, Formula One, and Australian Football League. Notable partnerships include the rights to design, manufacture, distribute all Nike MLB/NFL fan gear sold at retail; a deal with Barnes & Noble Education (BNED) and Lids to power the fan apparel experience across 750+ BNED online bookstores; a 10-year licensing, manufacturing and e-commerce partnership with French FC Paris Saint-Germain; a 10-year exclusive merchandise partnership with the Dallas Cowboys; and launching the first global e-commerce platform as part of an agreement with the International Olympic Committee that runs through the LA 2028 Summer Games.[59] [60] [61] [62] [63]

Fanatics Collectibles

Fanatics Collectibles was launched in 2021 after securing long-term, exclusive rights to design, manufacture and distribute trading cards for several sports properties, including MLB, MLBPA, NBA, NBPA and NFLPA.[64] [65] Fanatics Collectibles is led by CEO Mike Mahan, who joined the company in June 2022.[66]

Fanatics Betting & Gaming

Fanatics Betting & Gaming is developing an online and retail sports betting and online casino platform, leveraging the Fanatics brand and its extensive database of sports fans. The division is led by CEO Matt King, formerly of FanDuel.[67] Fanatics Sportsbook is live in 16 states as of March 2024.[68]

Fanatics Live

In July 2023, Fanatics launched Fanatics Live, a live commerce platform aimed at enhancing the digital shopping experience. Led by CEO Nick Bell, the live shopping app features trading card "breaks," limited edition merchandise drops, and creator content for sports fans and collectors to shop in real time.[69]

Fanatics Events

Fanatics Events is a venture focused on creating events similar to Comic Con for sports fans. In partnership with IMG, Fanatics Events aims to bring together fans from various interests, including sports, music, fashion, and entertainment. The first event, WWE World, took place as part of WrestleMania in April 2024.[70]

Criticism and controversies

Fanatics, by many, is considered a monopoly in North America due its aggressive ventures into sports merchandising and collectible card markets.[71] [72] [73] [74] [75]

Such aggressive actions have been the subject of lawsuits by smaller vendors and other companies such as Panini. These legal battles have centered around allegations of anti-competitive conduct and interference with business relations, further fueling the debate about Fanatics’ market practices.[76] [77] [78] [79]

In addition to legal challenges, Fanatics has also been subject to various types of fan criticism.[80] [81] Many consider the Fanatics products subpar, citing issues with the quality and design of their merchandise. So much so, that there are even dedicated pages where consumers voice their dissatisfaction and critique such poor products.[82] [83]

A notable event was the backlash over the quality of its MLB jerseys before and during the 2024 season.[84] [85] During spring training, the Kansas City Royals opted out of using the Vapor Premier template, instead wearing uniforms that featured the larger player name and number font used by the older uniforms.[86] By the time the 2024 regular season started, however, the league required the Royals to instead wear the new uniforms with the smaller font sizes, with a league spokesperson giving "consistency with other Major League Baseball teams" as the rationale for the mandate.[87] Following player complaints, MLB and Nike announced adjustments to the uniforms, including enlarged lettering and full pant customization starting in the 2025 season.[88] The MLB Players Association memo emphasized that the issues were related to Nike's design rather than Fanatics' manufacturing.[89]

Notes and References

  1. Web site: Fanatics Collectibles.
  2. Web site: Fanatics acquires Topps trading cards for $500 million. CNBC. January 4, 2022.
  3. Web site: Fanatics Betting and Gaming. Fanatics Inc.
  4. Web site: Michael Rubin's Fanatics, Jay-Z, Meek Mill, Lil Baby, and More Acquire Mitchell & Ness for $250 Million. Complex Networks.
  5. Web site: Fanatics acquires Topps' trading cards and collectables businesses. January 3, 2022. ESPN.
  6. News: Bobrowski . Meghan . August 10, 2021 . Fanatics Valuation Rises to $18 Billion as It Plans to Expand Sports Offerings . The Wall Street Journal . July 6, 2022 . en .
  7. Web site: Liberman . Noah . November 5, 2001 . Michael Rubin profile . July 6, 2022 . Sports Business Journal . en .
  8. News: DiStefano . Joseph . September 12, 2011 . Facebook, Zynga, Groupon ... and Philly's Kynetic . The Philadelphia Inquirer .
  9. News: Associated Press . August 16, 2012 . Fanatics buying Dreams for about $158 million . Yahoo! News .
  10. News: Bensinger . Greg . June 6, 2013 . Score! Web Sports Retailer Fanatics Inc. Tops $3 Billion Valuation . The Wall Street Journal .
  11. Web site: Newly-Minted Billionaire Is Spinning eBay Scraps Into Gold. Forbes. 2024-07-11.
  12. News: Bensinger . Greg . August 9, 2014 . Sports Apparel Purveyor Fanatics Swipes One Kings Lane Chief . The Wall Street Journal .
  13. News: Donato-Weinstein . Nathan . May 4, 2016 . Why the world's largest licensed sports merchandise retailer is moving hundreds of jobs to San Mateo . Silicon Valley Business Journal .
  14. News: Snyder . Benjamin . December 3, 2014 . For online sports retailer Fanatics, the holidays are its Super Bowl . Fortune .
  15. News: Palmieri . Jean . Clark . Evan . July 21, 2021 . CEO Talks: Doug Mack on Fanatics' Fast Rise . WWD .
  16. News: 2019 Disruptor 50 list . May 15, 2019 . 25. Fanatics . CNBC .
  17. News: Primack . Dan . August 25, 2015 . Exclusive: Fanatics raises $300 million from Silver Lake . Fortune .
  18. News: Del Rey . Jason . February 2, 2016 . Fanatics Buys European Online Sports Retailer for $17 Million in Big Soccer Push . Vox .
  19. News: Dixon . Drew . April 5, 2017 . Jacksonville's Fanatics Inc. to acquire Majestic sports apparel company . Jacksonville.com .
  20. News: Loizos . Connie . September 6, 2017 . Given an assist, sports e-commerce giant Fanatics closes that $1 billion round led by SoftBank . TechCrunch .
  21. News: Long . Michael . October 16, 2017 . Fanatics creates college division after Fermata Partners acquisition . Sports Pro .
  22. Web site: The N.F.L. and Nike Make Room for Fanatics . . May 23, 2018 . July 5, 2022 .
  23. Web site: The dynamic career and life of Michael Rubin — billionaire team partner, friend of high-profile rappers, and criminal-justice reform advocate . . April 21, 2021 . July 5, 2022 .
  24. Web site: Coronavirus: MLB jersey provider Fanatics creating masks and gowns for medical workers .
  25. Web site: July 6, 2022 . 15,000 masks donated to Cleveland Clinic . Castrovince . Anthony . April 23, 2020 . Major League Baseball .
  26. Web site: MLB Officially Partners With Nike And Fanatics; Nike To Be Official Uniform And Footwear Provider . . January 25, 2019 . July 5, 2022 .
  27. Web site: Lee . Michael . April 20, 2020 . Brotherly Love: How a Sixers co-partner is getting stars of all kinds to pitch in. . July 6, 2022 . The Athletic . en .
  28. Web site: Beer . Jeff . May 18, 2020 . How Fanatics' All In Challenge became the wildest $50 million celebrity charity contest ever . July 6, 2022 . Fast Company . en .
  29. Web site: Kane . Dr. Gerald C . June 25, 2021 . In Pandemic Pivot, Fanatics Reinvents the Playbook . July 6, 2022 . The Wall Street Journal . en .
  30. Web site: Young . Jabari . August 13, 2020 . Michael Rubin's Fanatics now valued at $6.2 billion after latest Series E funding round . July 6, 2022 . CNBC . en .
  31. Web site: Herrera . Sebastian . August 13, 2020 . Web Retailer Fanatics Raises $350 Million Amid Rebound in IPO Market . July 6, 2022 . The Wall Street Journal . en .
  32. Web site: Palmieri . Jean . September 8, 2020 . Fanatics Acquires Assets of Top of the World Headwear Company . July 6, 2022 . Yahoo! Sports . en .
  33. Web site: Novy-Williams . Eben . September 7, 2020 . Fanatics Expands Headwear Business with Acquisition of Vetta Brands Assets . July 6, 2022 . Sportico . en .
  34. Web site: Young . Jabari . December 7, 2020 . Fanatics acquires WinCraft, a company that makes sports-themed merchandise . July 6, 2022 . CNBC . en .
  35. Web site: Young . Jabari . March 24, 2021 . Fanatics valuation doubles to $12.8 billion after a new funding round . July 6, 2022 . CNBC . en .
  36. Web site: Fanatics Valuation Rises to $18 Billion as It Plans to Expand Sports Offerings. The Wall Street Journal. 2024-07-11.
  37. Web site: Jay-Z and Roc Nation Invest in Michael Rubin's Fanatics Now Valued at $18 Billion. Complex. 2024-07-11.
  38. Web site: Novy-Williams . Eben . June 1, 2021 . Fanatics Launches Nft Firm Candy Digital with Novogratz, Vaynerchuk . July 6, 2022 . Sportico . en .
  39. Web site: Young . Jabari . June 1, 2021 . MLB launches into NFT space with help from Lou Gehrig and new company led by Fanatics . July 6, 2022 . CNBC . en .
  40. Web site: Young . Jabari . October 21, 2021 . Fanatics' NFT company is worth $1.5 billion, and NFL legend Peyton Manning now owns a stake . July 6, 2022 . CNBC . en .
  41. Web site: Fanatics is divesting its 60% stake in NFT company Candy Digital . . January 5, 2023 .
  42. Web site: Young . Jabari . August 19, 2021 . MLB will end 70-year deal with trading card company Topps . January 4, 2022 . CNBC . en .
  43. Web site: Young . Jabari . January 4, 2022 . Fanatics acquires Topps trading cards for $500 million . January 4, 2022 . CNBC . en .
  44. Web site: Beer . Tommy . Report: Fanatics Strikes Again, Set To Become Exclusive Licensee For NBA Trading Cards . January 4, 2022 . Forbes . en .
  45. Web site: Munar . Julio Luis . August 25, 2021 . Fanatics Takes NFL Cards From Panini To Complete Sole Control Of Big 3 Sports Cards . January 4, 2022 . ClutchPoints . en-US .
  46. Web site: Beaton . Andrew . September 29, 2021 . Fanatics Trading Cards Valuation Rises to $10.4 Billion as New Firm Aims to Expand Its Reach . The Wall Street Journal . en .
  47. News: 2021-09-29 . Fanatics Trading Cards valued at over $10 billion after latest funding . en . Reuters . 2023-11-07.
  48. Web site: Beaton . Andrew . January 4, 2022 . Fanatics Pried Baseball Cards From Topps. Now Fanatics Is Buying Topps. . The Wall Street Journal . en .
  49. Web site: Hirsch . Lauren . February 18, 2022 . Fanatics is buying Mitchell & Ness, a fellow sports merchandiser . The New York Times . en .
  50. Web site: Cowen . Trace William . February 18, 2022 . Michael Rubin's Fanatics, Jay-Z, Meek Mill, Lil Baby, and More Acquire Mitchell & Ness for $250 Million . .
  51. Web site: Golden . Jessica . April 6, 2022 . NFL, MLB and players unions lead the latest round of investment in rapidly growing Fanatics . CNBC . en .
  52. Web site: Fanatics Hits $31 Billion Valuation in Latest Funding Round. The Wall Street Journal. 2024-07-11.
  53. https://gamblingindustrynews.com/news/business/fanatics-150-million-acquire-pointsbets-us/ Gambling Industry News
  54. Web site: Golden . Jessica . 2023-06-28 . Fanatics increases its offer to $225 million to acquire PointsBet's U.S. assets . 2023-06-30 . CNBC . en.
  55. Web site: Q&A: Fanatics Betting CEO Matt King on acquiring PointsBet, innovating a new app and more. USA Today. 2024-07-11.
  56. Web site: US sports giant Fanatics acquires top Italian football club merchandiser. CNBC. 2024-07-11.
  57. Web site: Fanatics acquires Latin America-based retailer Fexpro. SportsPro. 2024-07-11.
  58. Web site: Andrew Low Ah Kee named new CEO of Fanatics Commerce. FOX Business. 2024-07-24.
  59. Web site: Nike Lands Major League Baseball Jersey Rights in 10-Year Deal. Bloomberg. 2024-07-24.
  60. Web site: Fanatics and Lids grow college presence with Barnes & Noble Education investment. SportsPro. 2024-07-24.
  61. Web site: Inside the deal: PSG and Fanatics’ landmark ecommerce partnership. SportsPro. 2024-07-24.
  62. Web site: Paris Saint-Germain Signs 10-Year Merchandise Deal With Fanatics. Bloomberg. 2024-07-24.
  63. Web site: Fanatics lands global e-commerce rights for Olympics merchandise. CNBC.com. 2024-07-24.
  64. Web site: ESPN: NFLPA, Fanatics Agree to 20-Year Contract for Trading Cards; Joining NBA, MLB. Bleacher Report. 2024-07-24.
  65. Web site: With a Frenzy of Deals, Fanatics Swoops In to Reorder the Trading-Card World. The Wall Street Journal. 2024-07-24.
  66. Web site: Fanatics hires former Dick Clark Productions CEO to lead its collectibles business. CNBC. 2024-07-24.
  67. Web site: Fanatics’ Matt King brings new thinking to US sports betting. iGaming Business. 2024-07-24.
  68. Web site: Fanatics, Connecticut Lottery Open New Retail Sportsbook. Covers. 2024-07-24.
  69. Web site: Will Fanatics Upend the World of Sports Collectibles?. The New York Times. 2024-07-24.
  70. Web site: Fanatics Taps Mannings, Brady, Jeter for Sports-Fan Fest in NYC. Bloomberg. 2024-07-24.
  71. Web site: Stoller . Matt . How Fanatics Is Building a Weird Monopoly Over Sports Trading Cards . 2024-05-02 . BIG by Matt Stoller . en.
  72. Web site: Vins . 2024-04-09 . Fanatics Is Running a De Facto Sports Apparel Monopoly . 2024-05-02 . . en-US.
  73. Web site: Fanatics' Dominance in the Sports Card Industry: What are they doing w . 2024-05-02 . Fan Arch . en.
  74. News: Kirshner . Alex . 2024-03-07 . It’s Time for Fanatics to Get Grilled by Congress . 2024-05-02 . Slate . en-US . 1091-2339.
  75. Web site: Pompliano . Joe . 2023-03-27 . How Fanatics Plans To Become A $100 Billion Company . 2024-05-02 . Huddle Up . Substack.
  76. Web site: Fanatics, NFL Sued For Conspiracy To Curb Merch Competition . 2024-05-02 . PPAI Media . en.
  77. Web site: MLB, Teams, Fanatics Inc. Accused of Online Merchandise Monopoly . 2024-05-02 . news.bloomberglaw.com . en.
  78. Web site: Fanatics, Italian Rival Test Antitrust Law in Market Share Fight . 2024-05-02 . news.bloomberglaw.com . en.
  79. Web site: Hajducky . Dan . 2023-08-03 . Panini America sues Fanatics, alleges monopoly . 2024-05-02 . ESPN.com . en.
  80. News: Grella . Nathan . 2023-03-23 . Why are NHL fans angry about the Fanatics jersey deal? . 2024-05-02 . Sportskeeda.
  81. Web site: Morin . Richard . 2023-03-21 . Hockey fans are outraged by the NHL's jersey deal with Fanatics. . 2024-05-02 . Yahoo Sports . . en-CA.
  82. Web site: Fanatic Sucks . 2024-05-02 . Twitter.
  83. Web site: Hockey Fans Brutally Expose Fanatics On Twitter . 2024-05-02 . HockeyPatrol . en-US.
  84. Web site: Fanatics MLB jerseys controversy, explained: Players, fans express displeasure for 'cheap' uniforms . February 20, 2024 . The Sporting News.
  85. Web site: ‘Everyone hates them’: see-through pants add to MLB’s uniform controversy . February 23, 2024 . The Guardian.
  86. Web site: Royals avoid unpopular uniform lettering during Nike/Fanatics overhaul, reportedly because they asked . February 27, 2024 . Yahoo!.
  87. Web site: Report: Royals Forced to Change NOB Lettering for ‘Consistency’ . April 27, 2024 . UniWatch.
  88. Web site: MLB, Nike announce uniform adjustments . May 3, 2024 . MLB.com.
  89. Web site: MLB to address uniforms after player complaints, per memo . April 28, 2024 . ESPN.com.