Fanatics IPO: Is It Coming Up Soon?

March 3, 2023 5:00 pm
Published by: Marcus Crest

From sports apparel and headgear to baseball cards and collectibles, Fanatics is a company with several operating divisions. Thanks to its expansive growth in the last years, the company accumulated an impressive $31 billion valuation.

While the number is substantial, Mark Rubin, the Fanatics founder, remains to pursue profit-making. No, that doesn’t include creating IPOs.

Instead, the company is more willing to focus on its division expansion through the betting and gaming industry.

An IPO will have to wait until the company envisions smoother market conditions. Stick around to learn about Fanatics, its financial undertakings, and its IPO status.

About Fanatics

Fanatics is a global sports apparel company. It sells licensed merchandise, such as jerseys, hoodies, and headwear.

The organization offers a multi-channel medium for purchase, such as online shopping, flagship stores, and on-site during popular sporting events.

Fanatics has multiple sports league partners, such as the National Football League (NFL), National Basketball Association (NBA), Major League Baseball (MLB), and National Association for Stock Car Auto Racing (NASCAR). It also has collaborations with several collegiates and professional teams.

Fanatics has other divisions, such as betting and gaming. Additionally, the company also sells collectibles and trading cards to sports fans. Overall, it’s divided into Fanatics Collectibles, Fanatics Betting & Gaming, and Fanatics Commerce.

Company History

It all started in 1995 when Alan and Mitch Trager launched a storefront in the Orange Park Mall. The shop primarily sold Jacksonville Jaguars and local college merchandise. Two years later, another store opened in Avenues Mall. Brent Trager operated the store and devised the company’s first e-commerce scene in 2000.

In 2006, the company was more focused on acquisitions. One of its initial purchases was Richard Perel’s Marketsville Inc. It was a sports retail website specializing in college football merchandise.

Perel remained in the Fanatics team and assisted in garnering prime funding, such as a $170 million deal. It led to a company valuation from $2.9 billion to $3.1 billion. Other acquisitions included Demand Made and RuppShirts.

By 2011, the Rubin era began when his GSI corporation purchased Fanatics on eBay. He paid over $277 million for the transaction. He also bought a 70% share of ShopRunner and Rue La La. He combined the companies to form a parent one called Kynetic.

Following that, Fanatics acquired a prime competitor, Dreams Inc. The buyout consisted of $158 million in cash and a debt of $25 million. The company proceeded to garner more acquisitions, funding rounds, and divisions. Afterward, Rubin sold GSI commerce to eBay for $2.4 billion.

The now-CEO of Fanatics stepped into the sports market directly after co-owning the Philadelphia 76ers. Rubin also partook in a portion of the New Jersey Devils.

Fanatics Board of Directors

The company’s board of directors includes:

  • Michael Rubin: Chairman and Chief Executive Officer - Fanatics
  • Doug Mack: Vice Chairman - Fanatics and Chief Executive Officer - Fanatics Commerce
  • Michael Conn: Vice Chairman - Fanatics
  • Mindy Grossman: Former Chief Executive Officer - WW International
  • Earvin “Magic” Johnson: Chairman and Chief Executive Officer - Magic Johnson Enterprises and Special Advisor
  • Jonathan Mildenhall: Co-Founder & Executive Chairman - TwentyFirstCenturyBrand
  • Gerald Storch: Chief Executive Officer - Storch Advisors
  • Lydia Jett: Managing Partner and Head of Global eCommerce and US Consumer Internet Sector Investments - SoftBank Investment Advisers
  • Greg Mondre: Co-Chief Executive Officer - Silver Lake
  • Deven Parekh: Managing Director - Insight Partners

Fanatics Focus

Fanatics is a direct-to-customer company. The organization’s focus stems from its divisions. They include online sports betting, NFTs, iGaming, trading cards, commerce, and merchandise.

According to Sports Business Journal’s executive editor, Abe Madkour, he reported Fanatics as the “Amazon of sports.”

Rubin responded, “I think about Fanatics as the Fanatics of sports, not the Amazon of sports. ... We're building an addictive product, and (we) give them everything they want, or the key things they want, digitally. That's a great opportunity.”

The company’s prime motive is to remain vigilant and relevant in a fast-paced environment of sports trends.

Fanatics Success

Fanatics is an opportunistic company, which helped it land multiple successes. One of those carpe diem moments happened in an NFL match between the Chicago Bears and Pittsburgh Steelers.

The latter’s team waited in the locker rooms during the national anthem to display solidarity. Meanwhile, the team’s lineman, Alejandro Villanueva, decided to stand. Villanueva’s name trended throughout social media platforms.

Fanatics seized the moment and posted an image of the offensive player’s jersey with his name and number. Sales of the shirt increased significantly. Despite not winning any touchdowns or passes, Villanueva became an overnight sensation from the power of a Fanatics sales force.

Rubin characterizes these as micro-moments that occur continuously in the sports scene. Staying up to date on them reaps considerable profit. Some have compared the brand to fast fashion firms like Zara and H&M for quick delivery.

Fanatics Business Strategy

The company’s strategy is to differentiate itself from all market players. It does so with its exclusive licensure from famed sports leagues. The 13 to 17-year-long deals allowed Fanatics to dominate the industry leaving little room for new players.

Rubin’s model encourages a differentiated product that can’t be commoditized or repeated by the Internet. In other words, the company emphasizes an in-house model with a structured end-to-end.

The owner compares his business to Amazon and Alibaba corporations. He believes in the power of differentiation through quality licensed products for sports fans.

Fanatics Financial Outlook

Fanatics holds a lucrative investor share. From sports leagues to private equity firms like Silver Lake and Softbank, the company’s funding rounds offer exponential rates, such as the $700 million round offered by Clearlake Capital.

The latter financial round pushed Fanatics to a mammoth $31 billion valuation, gaining more promise of becoming an IPO.

Fanatics Acquisitions

In terms of its purchases, Fanatics owns Candy Digital, a digital collectible company selling NFTs. The organization also holds over 50% of Lids, which offers sports apparel, headwear, and gear.

Besides that, one of Fanatics’ early acquisitions was in 2019, when it took ownership of Steiner Sports. The exchange yielded the sports merchandise company Steiner’s intellectual property, inventory, and name.

Another big name in the Fanatics roster is Mitchell & Ness. It was the oldest sports apparel provider operating in Philadelphia. Fanatics, and Jay Z, dropped a whopping $250 million for the Mitchell & Ness acquisition.

Fanatic’s acquisition of Topps was one of the company’s most profitable choices. The corporation paid a jaw-dropping $500 million. The 80-year-old company started in the chewing gum business before branching out to selling baseball cards.

Before the hefty acquisition, Fanatics acquired trading rights for Major League Baseball (MLB), National Football Association (NBA), and their respective player associations.

Possible Acquisition

Fanatics is discussing an acquisition of Tipico, a game betting company, to expand its betting sector. Rubin sold his Philadelphia 76ers and New Jersey Devils ownerships to gain entrance into the betting industry.

The NBA forbids team owners from operating a betting and gambling company. According to CNBC, Rubin announced,

“With the launch of our trading cards and collectibles business earlier this year — which will have a soon-to-launch sports betting operation, these new businesses will directly conflict with the ownership rules of sports leagues. Given these realities, I will sadly be selling my stake in the Sixers and shifting from part-owner back to life-long fan.”

Fanatics Funding Rounds

Fanatics accumulated over 11 funding rounds in total. One of its priciest funds was over $1.5 billion, offered by ten investors in 2022. The NFL was a notable investor in this round.

Another one of its rounds gathered approximately $320 million in 2021. Private equity and investment firms like Silver Lake, Thrive Capital, and Blackstone group partook in this fund. An additional participant included the Major League Baseball (MLB).

An earlier funding round included a $1 billion amount offered by the investment company. Softbank. In 2017, the billion-dollar deal boosted Fanatic’s valuation to over $4.5 billion.

Fanatics Investors

Aside from the company’s funding rounds and acquisitions, here are some lead investors.

  • LionTree
  • Softbank Vision Fund
  • Silver Lake
  • Fidelity
  • Clearlake Capital Group
  • MSD Capital
  • NFL
  • National Hockey League (NHL)
  • MLB

Other investors included celebrities like

  • Jay-Z
  • Lil Baby
  • LeBron James
  • Kevin Durant
  • Chris Paul
  • Devin Booker
  • Odell Bekham Jr.
  • James Harden
  • Joel Embiid

Is Fanatics Offering New Allocations Soon?

As of now, Fanatics is still a privately-funded company. In 2021, the company’s founder, Mark Rubin, reported that he doesn’t plan on going public yet. He foresees more growth before an IPO is on the table.

That said, an IPO is possible depending on future market conditions. The IPO-acquisition process is exhaustive and requires plenty of growth prospectus. Fanatics has yet to approach the SEC on an IPO possibility..

While investors speculate Rubin is waiting for the market conditions to be more favorable, others believe he’s waiting for bigger things, a $100 billion valuation.

For the best chance to get involved early put your name down for the IPO and to get access to Pre-IPO allocations, you can register your interest here.

Fanatics IPO Possible Marketplace

Several Pre-IPO investing platforms allow users to share their interest in acquiring stocks for a company. The sites may contact equity holders and ask for shares if the requests are large enough.

Equity holders are more likely to liquidate their shares before IPO issuance. It could happen due to macroeconomic conditions, such as market fluctuations.

What an IPO Could Mean for Fanatics

Several speculators are awaiting an IPO from Fanatics this year. Investors predict that the company will rank high in IPO figures. If the company goes public, it could foresee exceptional capital growth.

Subsequently, the growth may fuel the company’s recent betting and NFT divisions. Additionally, it may cover the incurring costs of acquisitions, such as the recent Topps buyout. Nevertheless, acquiring an IPO also has its drawbacks for the company.

Maintaining IPO status takes a whole department to manage. Subsequently, the process is costly and requires lots of attention away from the business outlook. It may conflict with Rubin’s desire to sustain focus on his model of keeping up with a fast-paced environment.

Fanatics would also have to disclose its financial, tax, and accounting records to the public if it acquired an IPO. When exposed, these records could assist competitors and inhibit business performance.

To Conclude

At this point, a Fanatics IPO is a speculative possibility. The offering will likely be on Rubin’s agenda as the company projects a sizable growth of at least $100 billion.

That said, an IPO holds several advantages for the multi-faceted company. It can boost its market exposure and increase its capital at significant rates.

Nevertheless, with multiple investors and future funding rounds, Fanatics will likely see continuous growth. For now, it’s building its new divisions, namely the NFT, betting, and gaming department.

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The information in this article is well-researched and factual. Still, it contains opinions also, and IT IS NOT FINANCIAL ADVICE and should not be interpreted as such, do not make any financial decisions based on the information in this article; we are not financial advisors. We are journalists. You should always consult with a professional before making any investment decisions. We hold no stock or interests in any of the Companies discussed on this website/app.

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