Fanatics, this is how a sports empire of 25,000 million was created that wants to dominate the digital business Alta Newsletter 2P Access your member account Join Club2P Remember password

Fanatics is on its way to becoming the place to be for any sports-related merchandising business. What started as an online distributor from Jacksonville (Florida), over the years has grown to become an empire with branches in merchandising or ecommerce management of sports properties, through digital collectibles or betting. A project that, thanks to technology, rounds and acquisitions, today exceeds a valuation of 28,000 million dollars (24,814 million euros).

Its history is, of course, a success story that goes through having in its portfolio more than 1,800 suppliers and contracts with more than 900 properties between professional teams, competitions and universities. But, even more important: a database with 81 million users that you can monetize by selling everything related to the leagues and clubs you follow. Between 2020 and 2021, its revenues went from 2.6 billion dollars to 3.4 billion dollars (2.3 billion euros to 3.04 billion euros).

The company has led several financing rounds that have allowed it to enter new markets. In 2020, it managed to raise 350 million dollars (310 million euros) from Series E that it used to buy the Top of the World brand, specialized in sports caps and which includes items from more than 600 North American universities. In 2021, he took his most aggressive step, taking control of Topps after taking away his main assets, giving entry to the big leagues in his new trading card subsidiary.

The key to that growth? Its founder, Michael Rubin. Fanatics was part of Global Sport, created in 1998 by this entrepreneur who, before reaching the age of majority, had already set up -and sold- a chain of ski shops and a sports brand. In 2011, the founder sold the group to eBay for $2.4 billion, but bought back the Fanatics brand from him because he really wanted the assets related to wholesale and not the end consumer.

In a world dominated by giants like Amazon or Alibaba, the American multinational has decided to bet everything on the sports vertical. His business has historically been highly concentrated in the United States, and it wasn't until 2019 that Rubin really began to expand the company internationally, closing various financing rounds and diversifying his business. It was time to attack an industry that, according to his estimates, moves 25,000 million dollars (22,300 million euros) annually worldwide.

“Fanatics is a clear example of where we are and where we are going. We are heading towards brands that go beyond the channel. What this company does is try to understand the user experience very well, know what they want and offer it to them. That leads them to a physical channel, digital, or omnichannel integration. More than placing the channel as the center of its strategy, the company perfectly understands that the center of its strategy has to be the customer," says Marc Cortés, an expert in digital marketing and consultant at Esade.

One of the main gaming territories where Fanatics has come out on top is the NBA. In 2019, the company closed an agreement with the Golden State Warriors to manage its retail as well as the implementation of its merchandising in the online channel. In this context, the relationship that Fanatics has always maintained with Nike is remarkable, with whom they have shared the distribution of both NBA and MLB products.

It is from that moment when the company, which was born as an e-commerce, began to think big and took over the exclusive merchandising of Paris Saint-Germaine (PSG), as well as the sale of all its exclusive products until 2030. Another of the great successes of the sports giant, which seeks to close long-term agreements, between 10 and 15 years, to which more clubs later joined. In addition, Fanatics bought Kitbag in 2016, for 11.5 million pounds (15.2 million euros), manager of the online store of clubs such as Real Madrid or Manchester United.

After this operation, the company acquired its competitor in the merchandising market, WinCraft, which had contracts with all the major North American leagues and more than 700 universities, representing an annual income of around 100 million euros. dollars (82.5 million euros). Its exclusive sales agreements include not only clubs, such as Atlético de Madrid recently added to its portfolio, but also competitions such as Formula 1, the Tour de France or the Ryder Cup. In addition, the company has also managed agreements with important federations or sports committees such as the International Olympic Committee (IOC), which awarded it the management of its e-commerce until 2028.

“One thing Fanatics does very well is manage the data they have access to. We are going from models where the user wants a product and I am going to buy it, to business models in which brands try to know me, anticipate and offer me a product that I still do not know what I want. Even before you have imagined it. That is the intention of all these companies”, adds Cortés.

In 2021, Fanatics closed a new financing round in which it raised 320 million dollars (283 million euros) and the company reached a valuation of 12.8 billion dollars (10.766 million euros). If Rubin was clear about one thing, it was that the funds would be used to expand his sports vertical business and to finance possible corporate operations, such as the purchase or merger with other companies.

“We realized that we had an incredible opportunity to go from being an ecommerce company to being a leading digital platform in the sports world. In practice, this means that a fan can access Fanatics in order to purchase any product you can think of. News, products, over time even tickets... We want to have a wide range of products. We have created the best customer database in the sports industry," Rubin said in an interview for CNBC.

In September 2021, Fanatics signed an agreement with the NBA to open the first official store of the North American Basketball League in the United Kingdom. Just five months later, at the end of 2021, the sports giant raised another 325 million dollars (288 million euros) in a new round of financing, which boosted the company's valuation to 18,000 million dollars (15,960 million euro).

In the midst of all this meteoric growth, Rubin has been surrounding himself with executives from other large multinationals or from the sector, such as the signing of Younes Latayi, from Nike and now director of international licensing, or the former player Los Angeles Lakers and businessman with experience in the sports industry, Magic Johnson.

“As for how Fanatics can continue to expand, logic leads us to think that it still has to explore the world of ticketing, which is a way to expand its portfolio. The company has two forms of growth. On the one hand, continue acquiring companies within its portfolio and closing more agreements with clubs and competitions, or entering user experiences. This could be done through the sale of tickets or also through the organization of sporting events”, explains the Esade consultant.

Just two months ago, the sports e-commerce giant announced its intention to issue debt for 500 million dollars (433 million euros) to venture into new verticals. But wich ones? Fanatics has focused on the world of digital collectibles, since e-commerce already has more than 81 million active customers, according to data from the company itself.

Sports Collectibles

Thus, Fanatics has gained a foothold in the digital collectibles sector and aspires to build an entire ecommerce and retail empire that combines merchandising and crypto assets. In its steps to achieve this goal, the sports e-commerce reached an agreement last August with the North American basketball league to become its collectible trading card partner, thus taking over from Panini as of 2026. In addition to reaching an agreement With the NBA, Fanatics has also sealed alliances with other leagues such as the MLB or the NFL, along with various American professional sports associations.

The latest move by the company led by Rubin was the acquisition of Topps's digital collectibles division for $500 million (441 million euros). Topps Sports & Entertainment, one of its direct rivals in this sector, has agreements with Uefa, FC Barcelona, ​​Real Sociedad and the MLB, among others.

To be aware of the business opportunity that the company has in this sector, one only has to go back a week, when the sports merchandising giant launched the first MLB digital collectibles after winning its contract, and In just two days, it generated sales of 2.7 million dollars (2.4 million euros).

What is the next step for this giant of the sports sector? Many suggest that the company will try to take over PSA, specialized in the graduation of trading cards and collectibles. “Fanatics' main challenge is managing the rapid growth it is experiencing. This is highly desired, but it has many implications and difficulties to take into account”, concludes Cortés.