$ 18 Billion Fanatics Preparing For IPO — This Is The Company’s Next Step

Fanatics Founder / Executive Chairman Michael Rubin will be attending the Fanatics Super Bowl Party at the College Football Hall of Fame on February 2, 2019 in Atlanta, Georgia.

Mike Coppola | Getty Images

Fanatics, a sports merchandising company, shocked the sports world last month after securing trading card rights for Major League Baseball, the National Football League, and the National Basketball Association.

Most notably, Fanatics’ deal with MLB may have ended its decades of partnership with Topps and made Topps’ plans undisclosed through SPAC with Mudrick Capital Acquisition Corp. II. He also returned Topps owner and former Disney CEO Michael Eisner to the blueprints and considered the next move, if any. Panini, who has been licensed for NFL trading cards since 2016 and NBA since 2009, will also lose Fanatics rights.

The series of deals underscores CEO Michael Rubin’s plans to extend Fanatics beyond sportswear to collectibles, sports betting, and even broadcast sports games. Well-known investors like JAY-Z have already attracted a $ 18 billion personal valuation prior to the expected IPO.

Here’s how Fanatics established the partnership and what that means for the company to move forward.

Fanatics add another piece to the puzzle

Rubin’s move ends the historic sports partnership that the NBA has already proven. Last May, the NBA resigned from its more than 30-year partner basketball maker Sporting and partnered with Wilson to manufacture basketball. MLB made the following move when it partnered with trading card Fanatics:

A moat-like sports league that surrounds Fanatics’ products, the company has already partnered with most leagues and teams to manufacture soft and hard goods, including sports jerseys. The pandemic forced all leagues to rethink their commerce to maximize profits after suffering significant losses. Fanatics also had to rethink their business due to the interruption of live sports broadcasts early in the pandemic.

According to people familiar with Fanatics’ plans, the company was considering expanding its business last summer to add pillars to its business. Fanatics already dominate the vertical and e-commerce of sports, primarily in all rights of their MLB. But there was also an opportunity in the trading card market.

Fanatics refused to comment on this story.

Topps trading cards are available for taking pictures in Richmond, Virginia.

Jai Paul | Bloomberg | Getty Images

According to Verified Market Research, the sports trading card business is projected to reach $ 98.7 billion by 2027. In 2021, the sector was particularly active, with Babe Ruth’s classic baseball card setting a record. Even Luka Doncic’s rookie card set an auction record.

Trading card input is also in line with Fanatics’ plan to build its name in the NFT collectibles sector through Candy Digital. To secure the New Deal, Fanatics provided fairness to leagues and player unions, which are guaranteed to generate at least $ 1 billion in revenue over the duration of the partnership. The league is not fair in its current transactions with trading card companies.

Fanatics’ plan for physical trading card space is to expand it by opening the market and make better use of it by providing it directly to consumers. For example, if a collector buys a trading card, through Fanatics, the assets can be insured, graded, stored and even marketed for sale or trade. The company is likely to collect transaction fees, and the league also gets the valuable data they crave.

Speculation on Wall Street suggests that Fanatics will also try to buy one of its trading card companies. According to PitchBook, Panini is valued at $ 1.3 billion and includes companies such as Upper Deck and Texas-based leaf trading cards.

Winning the competition is similar to the acquisition of Fanatics, which was completed in 2017, when the VF Corp licensed sports group was purchased for about $ 225 million. The transaction included the Majestic Athletic brand, which took place shortly after Fanatics acquired Majestic’s MLB apparel rights.

Robert Craft, JAY-Z, and Mike Rubin will attend Michael Rubin’s Fanatics Super Bowl Party at the Loews Miami Beach Hotel on February 1, 2020 in Miami Beach, Florida.

Kevin Mazur | Getty Images

Still doing business on the table

Fanatics also wants an estimated $ 40 billion in US online gambling space through sports betting, sources said.

The company got a lot of attention after it was revealed that it wanted to enter the sports betting market in New York. Fanatics has the impression that it can leverage its 80 million user base associated with sports merchandising companies for sports betting services. If it works, Fanatics can lure sports bettors into the platform and combine offerings from product catalogs as a reward for consumer loyalty.

However, fanatics need to buy an established sportsbook to enter the space.

Industry chatter has combined Fanatics with online casino operator Rush Street Interactive. It has a sportsbook via the SugarHouse property. However, sources said CNBC Fanatics was not interested in the acquisition. Rush Street is traded on the New York Stock Exchange under the ticker symbol RSI and has a market capitalization of $ 2.6 billion. Rush Street declined to comment.

It’s unclear who Fanatics is targeting, but in the end we need to do something about it, as required by the Sports Betting Act.

Rubin’s company has not stated that it wants to be a global powerhouse offering a variety of services throughout the digital world. Fanatics wants sports media rights, gambling, improved ticket models, souvenir assets, NFTs, and current trading cards.

And as the deal continues, the IPO is waiting.

In sports betting circles, the question is not when Fanatics will be released, but when it will be released. Fanatics received a $ 18 billion valuation after raising additional funding. We have also started a business in China with investment entertainer JAY-Z. MLB and NFL are already partners, and SoftBank has funded Fanatics from the $ 93 billion Vision Fund.

Barrett Daniels, a partner at Deloitte, a global accounting firm, said companies similar to fanatics positioning and securing large transactions usually seek public offerings sooner or later.

Daniels, Deloitte’s national IPO co-leader and head of the Western SPAC region, said companies that emulate Fanatics status “reward everyone involved and enable them to share their success. This is a big driving force and important. It’s part of the puzzle. And some companies want to be the dominant players in their field. They’re going public. is needed.”

IPOs are possible, but Daniels added that staying private isn’t as taboo as it used to be.

“At that time, you were always public when you reached about $ 1 billion, but today there seems to be no limit,” Daniels said. “Companies are getting bigger and bigger in the private market and staying private, and there is still a lot of money in the private market.”

$ 18 Billion Fanatics Preparing For IPO — This Is The Company’s Next Step

Source link $ 18 Billion Fanatics Preparing For IPO — This Is The Company’s Next Step

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