Michael Rubin arrives at the 2019 Fanatics Super Bowl Party on Saturday, Feb. 2, 2019, in Atlanta.
Paul R. Giunta | Invision | AP
Sports e-commerce company Fanatics is growing quickly, but it's still nowhere near where it aims to be. Recently, the company said, it reached a $27 billion valuation and it wants to grow into a $100 billion empire over the next 10 years.
Its recent funding round, which included $320 million from the NFL, is making its investors optimistic.
The NFL, MLB, NBA, NHL, MLS and various players unions have a combined stake in Fanatics worth $5 billion, according to people familiar with knowledge of the company's business. The people spoke to CNBC about the company on condition of anonymity, as Fanatics doesn't publicly discuss its finances.
Fanatics is a major hub for sports merchandise such as jerseys and other apparel, as well as sports-themed home, office and automotive consumer products. It could get a boost as governments lift Covid restrictions and allow more fans to attend games. The company is expanding into online sports betting, too.
CEO Michael Rubin is emboldened and says he's on a mission to conquer the sports e-commerce sector and beyond.
"I'm 100% locked into making Fanatics the most incredible digital sports platform in the world," Rubin said at a conference in March.
Fanatics has some skeptics, too.
"I'm still not buying that it's worth that level," one executive said when asked about Fanatics' $27 billion valuation.
The executive, who spoke to CNBC on the condition of anonymity, said Fanatics' private status is a reason for skepticism. Private companies can conceal revenue struggles, as they aren't required by the SEC to report earnings.
"They can get away with a hell of a lot more because they have to anticipate the contribution of each business line to the revenue and EBITDA and how it will change for the future," the executive said. "And the leagues are also partners, so it's in their best interest to elevate the value."
Fanatics declined to comment for this story.
The latest investment round came after Fanatics had two years of apparently quick growth. The company had a $6.2 billion valuation in 2020, hit $12.8 billion in March 2021 and reached $18 billion in August. People familiar with the inner workings of the company suggest the goal is $10 billion in earnings before interest, taxes, depreciation and amortization, or EBITDA, over 10 years.
Fanatics is anticipating roughly $6 billion in revenue in 2022 and targeting $10 billion in revenue over the next few years, according to people familiar with the company's business.
Building a juggernaut
The comments from Rubin and the executive came days after it was revealed that Fanatics' most recent $1.5 billion funding round was driven in large part by the NFL, MLB, NHL and Qatar Investment Authority — the sovereign wealth fund that owns UEFA soccer club PSG.
"We're thinking about how to build a company that's beloved by billions of sports fans globally," Rubin said at the MIT Sloan Sports Analytics Conference in Boston on March 4. "Valuation just follows the business results."
Much of Fanatics' growth has been generated through acquisitions, particularly during a pandemic shopping spree. The company expanded its e-commerce business in 2020, when it purchased WinCraft, a company that makes sports-themed merchandise. It acquired the Topps trading card company for $500 million to jumpstart 2022, while also forging partnerships with major sports leagues and their players unions to end 2021.
The WinCraft purchase landed Fanatics 700 licensing rights to NCAA schools. The company also leveraged MLB's e-commerce rights to align future blockchain revenue when it launched NFT company Candy Digital in 2021. So far, Candy Digital is valued at $1.5 billion.
Fanatics already had exclusive licensing deals with the NFL and Nike to make jerseys and an exclusive e-commerce deal with Walmart. Add in the new revenue streams from Topps, a team e-commerce deal with the Dallas Cowboys, and global rights to the Olympics, and the people familiar with the company's business suggested Fanatics would lure in $1 billion in EBITDA in 2022.
Sports leagues are attracted to Fanatics' future around its products, and investors like that it deals directly with consumers.
Revenue keeps growing as a result, too, according to the company. Rubin said Fanatics is projecting $4.5 billion in revenue for its e-commerce business in 2022. That would be a jump from $2.3 billion before the pandemic.
Fanatics is also looking to technological capabilities to spur further growth. It aims to leverage its artificial intelligence, cloud computing and machine learning tech to advance it. The company touts its 80 million users. Rubin has said Fanatics has up to 16 data attributes per consumer. Data attributes, which contain characteristics about consumers, help companies personalize offers to consumers.
Green Bay Packers fan cave
Source: Fanatics
IPO in the cards?
Several major investors are sold on Fanatics' future as it inches closer to a potential initial public offering, which would deliver big returns.
Firms including Fidelity, Thrive Capital, Franklin Templeton and Neuberger Berman are among investors. They joined investing firm SoftBank and Chinese e-commerce giant Alibaba Group.
NFL legend Peyton Manning is an investor. Entertainer Shawn "Jay-Z" Carter joined in August. Hip-hop star Lil Baby, Dell founder Michael Dell, and Joseph Tsai, the Alibaba co-founder and Brooklyn Nets owner, are also investors.
In addition, Silver Lake, Insight Partners and entertainment company Endeavor are investors in Fanatics' projected $10 billion trading cards business.
Investors will likely have to wait a bit longer for an IPO. The company doesn't plan to go public this year, according to people familiar with the company's business.
Andrew Harrer | Bloomberg | Getty Images
Fanatics targets sports betting
Fanatics' quest for a $100 billion valuation could run into several obstacles.
Inflation is surging, giving rise to recession fears. Geopolitical strife could hit international growth as war rages in Ukraine and U.S.-China relations become chillier. (Fanatics launched operations in China in February 2021.) Antitrust concerns have also surfaced over Fanatics' agreement with the NFL, which competitors allege is a form of collusion that harms competing online retailers. That could attract a future challenge with the government.
But publicly and behind the scenes, Rubin remains optimistic about what lies ahead.
"Every industry changes radically," the CEO said. "I think sports is the greatest entertainment in the world, but we've got to keep making it relevant, and we've got to keep it fresh and innovative."
Expect more acquisitions and an integration of online betting at some point. Rubin has long shown an interest in online betting. Fanatics hired former FanDuel Chief Executive Matt King in 2021 and applied for a gambling license in New York as it looks to take on DraftKings, FanDuel, Caesars and MGM in the space.
It's not clear what gambling company Fanatics will target, but people familiar with the business downplayed speculation about a potential acquisition of WynnBET. That betting company is reportedly on the market for $500 million.
Rubin projected Fanatics would lead the category in 10 years. The advantage: Fanatics' 80 million users and $19 per customer acquisition cost, which is lower than average for betting companies. The cost is money spent to acquire new customers through methods such as marketing and promotion.
Fanatics can use that low cost in the e-commerce space to bring in new customers and then leverage sports betting while consumers are within Fanatics' ecosystem.
"The average cost to acquire a customer in online sports betting today is $500 on a good day," Rubin said at the conference. "I'd much rather look at the different places that I could acquire customers and cross-sell them into online sports betting than go out and spend $500-plus and have a multiyear payback in a highly promotional environment."
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Clarification: This story was updated to reflect more specific revenue projections for Fanatics.
FAQs
What is Fanatics business strategy? ›
Fanatics possesses an innovative vertical commerce business model that allows the company to quickly design, manufacture and distribute high quality fan gear, jerseys, lifestyle and streetwear products, headwear and hardgoods.
How did Fanatics become so big? ›Through transformative partnerships with Nike for both the NFL and MLB, Fanatics became the exclusive designer, manufacturer and distributor of all Nike fan apparel and jerseys sold at retail for both leagues.
How big of a company is Fanatics? ›| Type | Private |
|---|---|
| Owner | Michael Rubin |
| Number of employees | 10,000 |
| Subsidiaries | Fanatics Collectibles, Fanatics Betting & Gaming |
| Website | fanaticsinc.com |
Michael Rubin is the company's chairman and CEO. The company, which was last valued at $31 billion in December 2022, is a global digital sports platform for purchasing team apparel, jerseys, headwear and hardgoods.
Who is Fanatics biggest competitor? ›- lids.com, with 2.1M visits, 68 authority score, 0.42% bounce rate.
- fansedge.com, with 775.4K visits, 51 authority score, 0.36% bounce rate.
- rallyhouse.com, with 678.2K visits, 44 authority score, 0.41% bounce rate.
- nflshop.com, with 2.9M visits, 61 authority score, 0.60% bounce rate.
Fanatics is building the leading global digital sports platform to ignite and harness the passions of fans, and maximize the presence and reach for hundreds of partners globally.
Why is Fanatics successful? ›But Fanatics' success depends in part on its deals with the leagues, which could create competition by entering agreements with rivals. “While I have a lot of admiration for what Fanatics has done, what they're doing is replicable,” said Matt Powell, a sports industry analyst at the market research firm NPD Group.
Who is Fanatics target audience? ›Audience composition can reveal a site's current market share across various audiences. fanatics.com's audience is 56.33% male and 43.67% female. The largest age group of visitors are 25 - 34 year olds (Desktop).
Is Fanatics an ethical company? ›Sports apparel company Fanatics received accreditation by the Fair Labor Association in 2021. The FLA holds its partners accountable to standards like health and safety and nondiscrimination.
How often does Fanatics pay? ›What day does pay period end? Every Saturday.
Is Fanatics a good company to work for? ›
Fanatics is a great company with excellent opportunities, however, it is challenging to cypher through all that the company has going on to find what best suits me. Overall, working for Fanatics has been a very good experience.
How much money is Fanatics worth? ›Report: Fanatics worth $31 billion.
What is OnlyFans stock called? ›FANNED-USD - OnlyFans USD.
Where is Fanatics headquarters? ›Fanatics is headquartered in Jacksonville, Florida, the US.
Is Fanatics a Fortune 500 company? ›Fanatics Inc., a Fortune 500 company known for manufacturing licensed sports gear, clothing and other merchandise, will open a distribution center in North Las Vegas by June 2017.
How many Fanatics employees are there? ›Fanatics has 1,800 employees.
Does Fanatics own NFL shop? ›NFL About Us. Our website is managed by Fanatics (International) Ltd. As the global leader in licensed sports merchandise, Fanatics delivers to over 180 countries, runs stores in over 12 languages and supports multi-lingual call centres incorporating 11 languages.
What's the difference between fans and Fanatics? ›A fan, according to the American Heritage College Dictionary, is "an ardent devotee, an enthusiast." Fanatic is defined as "a person marked by an extreme unreasoning enthusiasm, as for a cause." The distinction, then, apparently rests on whether the enthusiasm is ardent or unreasoning.
What is Fanatics all in challenge? ›Each day, the biggest athletes, teams, leagues, celebrities, musicians and business moguls will “challenge” each other to up the ante and provide incredible prized possessions and once-in-a-lifetime experiences for fans to both bid on and enter for their chance to win.
Did Jay-Z invest in Fanatics? ›and a group of investors, including music artists Jay-Z, Meek Mill and Lil Baby, have acquired sports apparel company Mitchell & Ness, Fanatics said.
How much of Fanatics does Jay-Z own? ›
According to the terms of the deal, Fanatics owns 75 percent with 25 percent purchased by Jay-Z, Meek Mill, Maverick Carter, Lil Baby, and others.
What is Fanatics corporate dress code? ›The dress code at Fanatics is casual.
This means no short shorts, ripped jeans or shirts, or other clothing that may be considered offensive by others. Managers and supervisors are expected to dress less casually than their employees, in order to establish and maintain proper authority.
- Nestle.
- Tesco.
- Coca-cola.
- Nike.
- Adidas.
- Victoria's Secret.
- L.L. Bean.
- Amazon.
Apple, Microsoft, Dell Technologies, Hewlett Packard Enterprise, HP Inc., LinkedIn and Western Digital were among the companies named most ethical in the tech field by the advisory panel.
Does Fanatics do drug test? ›Yes, Fanatics does perform drug tests.
Fanatics, therefore, maintains a strict drug and alcohol policy that forbids employees from reporting to work or performing their duties with any unlawful drugs or alcohol in their system.
You have to be at least 18 years old to work at Fanatics.
Fanatics does not hire minors to any full- or part-time positions at its stores. Fanatics requires prospective employees to have a certain level of experience and availability in order to be hired.
Average Fanatics, Inc Data Analyst yearly pay in the United States is approximately $63,414, which is 9% below the national average.
What discounts do Fanatics employees get? ›As a Fanatics employee, you receive 40% off all regularly priced Fanatics merchandise plus free shipping. If you have a Fanatics.com email address, you can get this discount on the Fanatics website.
How do I call off work at Fanatics? ›Under our program, we will provide two weeks of paid leave to the employee, including if you are a spouse/significant other. If you are a regular part-time employee, please send an email with your full legal name to confidentialbenefits@fanatics.com with your request.
How long is Fanatics contract? ›Fanatics has signed a 10-year contract, beginning with the 2024-25 season, to become the NHL's authentic outfitter of on-ice uniforms and retail authentic jerseys.
Does Meek Mill own Fanatics? ›
The company that helped make throwbacks cool again will soon be owned by Fanatics Sportswear and a group that includes rappers Meek Mill, Jay-Z and Lil Baby. 76ers co-owner Michael Rubin owns Fanatics and he's driving the acquisition. Mitchell & Ness is the oldest sports apparel company in Philadelphia.
Does NBA own Fanatics? ›The National Basketball Association is a partner in Fanatics China, the joint venture launched last year between e-commerce giant Fanatics and private equity firm Hillhouse Capital, according to multiple people familiar with the matter.
Who is the CEO of Fanatics? ›Michael Rubin — Fanatics Inc.
Who is OnlyFans owned by? › What is Chick-fil-A stock called? ›Chick-fil-A is a private, family-owned company and does not offer stock options to the public. If you are interested in investing in Chick-fil-A by applying to become a franchised Owner/Operator, check our franchise page to learn more about opportunities in the U.S., Canada and Puerto Rico.
Does eBay own Fanatics? ›A Villanova University dropout, Rubin sold his e-commerce startup GSI Commerce for $2.4 billion to eBay in 2011, buying out the name Fanatics, a small sports merchandise retailer previously bought by GSI, in the transaction.
How popular is Fanatics? ›In June 2022, about 9% of U.S. sports and outdoor online shop users had heard about Fanatics in the media, on social media, or in advertising over the past three months.
Does Fanatics have physical locations? ›With more than 50 physical store locations worldwide, ranging from in-venue stadiums and arenas to flagship locations, Fanatics offers dynamic solutions to partners looking to seamlessly blend the online and offline shopping experience for their passionate fanbases.
Who is the Fortune 1 company? ›...
Fortune Global 500 of 2022.
| Rank | 1 |
|---|---|
| Company | Walmart |
| Country | United States |
| Industry | Retail |
| Revenue in USD | $572.8 billion |
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Is Fanatics associated with NFL? ›
The NFL Shop from Fanatics.com features Sportswear and Accessories from brands like Nike and New Era, as well as NFL coolers so you can head to the tailgate repping your team. Shop the new craze that are the NFL Funko POP dolls that we feature for some of the league's best players!
Who is the head of strategy for Fanatics? ›Diane Gotua - Senior Vice President - Head of Global Strategy - Fanatics, Inc.
What are DraftKings business strategies? ›User Acquisition and Retention – The marketing strategy of DraftKings is to acquire, retain and reactivate users while building a trusted consumer-facing brand. DraftKings uses a variety of free and paid marketing channels to achieve its marketing objectives.
Is Fanatics a unicorn? ›The one non-tech firm on the list is Fanatics, whose main products are sports merchandise and sports trading cards. Because a unicorn doesn't issue publicly traded stock, the firm's valuation is determined by how much an investor pays for a percentage of the firm.
Is Fanatics knock off? ›Fanatics Exclusive Athletes
In this direct-to-consumer model, Fanatics ensures only 100% authentic, officially licensed products are made available to fans.
Overall, DraftKings recorded total contribution profit of $105 million in 2022, covering states that were still in investment mode, Park added. By the end of 2023, Park estimates that DraftKings' total contribution profit will surpass $500 million, even when factoring investment in new states.
What's the key to winning DraftKings? ›A successful daily fantasy football player chooses his/her games wisely. Balanced game selection and money management are key. You want to play a lot of low risks, low return on investment games. A good fantasy player should be able to steadily increase bankroll by doubling up on 50/50 style contests.
What is DraftKings head to head strategy? ›Head to Head (H2H) Strategy:
one other player, the highest score wins the total of the entry fees, less rake. This type of contest is essentially the same as 50/50 contests, except for the number of entrants.