August 9, 2022

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NFL, MLB and players unions lead latest investment in Fanatics

A detailed photo of the Fanatics apparel displayed at NFL Hospitality during the 2018 NFL Annual Meetings at the Ritz Carlton Orlando, Great Lakes on March 26, 2018 in Orlando, Florida.

Mark Brown | Getty Images

The NFL, other major sports leagues, players unions and team owners are leading the latest round of investment in Fanatics, the rapidly growing sports online-platform company.

The latest investment totals $1.5 billion, with the NFL kicking in the largest portion at $320 million. Fanatics is valued at $27 billion.

The NFL Players Association also made an investment. Other investors include Major League Baseball and its players union, as well as the National Hockey League.

Joseph Tsai, the Alibaba co-founder and Brooklyn Nets owner, and the Qatar Investment Authority, owner of the Paris Saint-Germain soccer team, also are investors in this latest round.

The investment continues the trend of leagues and players’ associations wanting a slice of the Fanatics pie. Similarly, the NBA recently took a 3% stake in SportRadar.

Florida-based Fanatics was founded in 2011 by Michael Rubin, co-owner of the Philadelphia 76ers and New Jersey Devils. It now has exclusive licensing deals with the NFL, NHL, NBA, MLB and colleges and universities to make and sell official team merchandise.

Earlier this year, the company expanded beyond its merchandise base, acquiring Topps trading cards for $500 million. That Fanatics’ entity is now valued at $10 billion after a $350 million round of funding last September.

Leagues, players’ associations and team owners now own approximately 10% of Fanatics. The NFL and MLB first invested $150 million in Fanatics in 2017. CNBC previously reported other investors in the most recent round of funding include Fidelity, BlackRock and Michael Dell’s MSD Partners.

“This investment not only reflects our experience having worked with Michael [Rubin] and the team at Fanatics for a number of years but our belief that the company is building a business that is new, unique and valuable,” Brian Rolapp, the NFL’s chief media and business officer, told CNBC regarding the latest investment round.

Last year, Fanatics launched Candy Digital, which sells non-fungible tokens, or NFTs. The company also owns half of the hat retailer Lids Sports Group, which it acquired in 2019.

Fanatics is now eyeing the sports-gambling space, with the launch of an online sportsbook under the direction of former FanDuel CEO Matt King.

With the growth comes speculation of a potential initial public offering, but Fanatics isn’t showing its hand: While it “is clearly an available option to us, there is no update on any timeline,” a company spokesperson said. “Our focus remains on expanding the business and building the leading digital sports platform over the next decade and beyond.”

Fanatics is a two-time CNBC Disruptor 50 company. Sign up for our weekly, original newsletter that goes beyond the annual Disruptor 50 list, offering a closer look at private companies like Fanatics that continue to innovate across every sector of the economy.

https://www.cnbc.com/2022/04/06/nfl-mlb-players-unions-lead-latest-investment-in-fanatics.html