During a keynote session at the National Retail Federation: Retail’s Big Show, Fanatics Founder and CEO Michael Rubin said the company now controls about one-third of the global market for sports fan merchandise, with significant opportunities to gain a greater share, particularly in the international markets.

Rubin said Fanatics Commerce, its merchandise business, was generating only $250 million in annual sales when he acquired the business in 2011. At the time, Rubin sold his former company, GSI Commerce, to eBay for $2.4 billion, and the Fanatics licensed sports division was spun off to Rubin.

Fanatics Commerce now does about a $7 billion in annual sales. Said Rubin of the merchandise business at the event held in New York City’s Javits Center, “I think we have a higher market share in the U.S. than we do outside of the US. But we are a global business today with about a billion dollars outside of the U.S.”

Overall, Fanatics’ annual revenue is about $13 billion, with roughly 22,000 employees across three businesses.

Beyond Fanatics Commerce, its two other divisions are Fanatics Collectibles, launched in 2021 and now a $4 billion business that leads the category, and Fanatics Betting & Gaming, launched in a few states nationwide in September 2023 and now a $2 billion business.

Rubin said one key to Fanatics’ success is that it continues to run the business as a start-up. “We do like to run it like a scrappy startup,” said Rubin. “I believe if you lose that mentality, you’ll be dead. You know, competition takes you out.” He added, “In each business, we have strong competitors, people that are coming for us.”

Even in the Fanatics Commerce business, where the company has a dominant share, Fanatics continues to fend off a wide range of competitors. Rubin said, “People say all the time things like, ‘We own the market.’ We don’t think that at all. We think we are a startup in three highly competitive businesses, and there are always people trying to disrupt everything that we’re doing.”

Rubin said about three-quarters of the Fanatics Commerce business is direct-to-consumer, with about two-thirds selling online and one-third through physical retail. The remaining one quarter is wholesale.

Beyond the flagship Fanatics website, Fanatics Commerce operates many of the leagues and individual teams’ e-commerce sites, serving about 1,000 e-commerce partners, including the NFL Shop, NBA store, NHL store, and college sites. Fanatics Commerce also has partnerships with Lids, which has 1,400 stores, and with Barnes & Noble, which sells fan gear in 600 college bookstores. It also owns several brands, including Mitchell & Ness, and makes all Nike fan apparel, as well as licensed apparel for Champion, Reebok and Under Armour.

“When you talk about competition, we have a lot,” said Rubin of the Fanatics Commerce business. “We have a lot of certainty that Amazon wakes up every day saying, ‘How do we give the lowest prices? How do we have every assortment on the planet?’ They’re a viable competitor in the business. We both work and compete with some of the big brands.

“You can look at an Adidas or other parts of Nike that we compete with. And then there are many individual companies that compete with us. So, it is a highly competitive business. It’s about a $25 billion category. We’re only $7 billion today. So, we need to, most importantly, grow the category. How do we double that category? And then we need to obviously grow our market share today, with only a third of the global market. We feel like we’re just getting going.”

Rubin said Fanatics’ broader vision is to become “the most important company in sport.”

As Fanatics extends into categories such as collectibles and gambling, Rubin said a priority in deciding to enter a new category is whether the company can add more value to the fan experience.

“You have to think about, ‘Can you do something better for your customer?’ said Rubin. “And if you do that, ‘Can it be a good business?’ We won’t get into any business that we don’t think we can make it better for the customer — materially better for the customer — and we can make at least a billion dollars of profit off that business.”

In many cases, businesses benefit from collaborating with one another. For instance, Fanatics Fest, its collectibles show that recently completed its third event in New York City, includes a strong merchandising component. Fanatics will launch a credit card later this spring, Rubin forecasts, which will be “a game changer for sports fans” and incorporate all of Fanatics’ businesses.

Rubin concluded, “I think we have endless opportunities, and I think in a decade from now we’ll be multiple businesses that we haven’t envisioned today. I think the most important thing is to start and stop every conversation with, ‘How do we make it better for the fan?’ If you make it better for the fan, then I think you’ll drive a viable business.”

Images courtesy Fanatics