Fanatics is nearing an agreement to sell its licensed sports apparel through a “major online marketplace” and is hoping to strike deals with “dozens of others,” Co-Founder Michael Rubin said during a presentation at the National Retail Federation Show (NRF) in New York. The pacts would make Fanatics the marketplaces’ exclusive supplier for licensed sports apparel, he said.

Rubin didn’t identify the potential marketplace partner or partners that would have access to what he says is more than a million SKUs of sports-related products. But Rubin noted that Amazon’s marketplace has a “very small assortment” of licensed sports apparel. Under the pending agreements, the marketplaces would be paid a commission on each sale, Rubin said.

“We hope to be the largest seller on many marketplaces,” Rubin said. “It is absolutely the right strategy for the leagues, the teams, and the marketplaces.”

(Many smaller retailers have complained about restrictions that some leagues and suppliers have put on their ability to sell league-licensed apparel via online marketplaces or on their own websites.)

Fanatics is forecasting sales of $2.7-$2.8 billion in 2019, Rubin said, up from $1.4 billion in 2016 and $2 billion in 2017. About two thirds of the products it sells will be designed, developed and sourced by the company in 2020, up from 2%-3% when it launched in 2011, Rubin said. (The company’s acquisitions over the past few years have included major sports apparel manufacturer Majestic.)

With the addition of Fanatics, professional sports leagues’ direct-to-consumer business has increased to about 20% of their collective annual revenue, up from a single-digit percentage several years ago, he said. Licensing pacts with the leagues are 10-15 years, with the average length running into the 2030s, Rubin said.

Fanatics is moving into eSports via a recently announced multi-year agreement with Activision Blizzard Entertainment for the Overwatch League. It will handle online, in-venue (largely at Blizzard Arena) and special event merchandising for jerseys, fan gear, head gear and hard goods for the Overwatch League and each of its 20 franchises when the second season begins on Feb. 14. Fanatics and the Overwatch League also will work to find additional licensees and suppliers. Fanatics EVP Alex Dean was appointed General Manager of the company’s new Esports Division.

The company will continue to promote its own brand, which sells “tens of millions” units each year, Rubin said. It spends about $100 million annually on marketing and advertising across digital, social media and TV.

It will continue to concentrate on fan gear, not performance apparel. “Fanatics is the brand of the fan. When you think about being on the field, court or ice that is Nike, Adidas and others,” Rubin said.

Contact:

Fanatics, Alex Dean, General Mgr. Esports, 904-421-8143