The billionaire chief executive of Fanatics plans to push on with his acquisition spree after raising another $1.5bn from investors, as the US group continues to expand from sports merchandising into digital collectibles and trading cards.
“All the capital raises are always for M&A, we don’t raise capital for our operations,” Fanatics CEO Michael Rubin told the Financial Times. “We’ll continue to be acquisitive.”
Fanatics has already splashed out roughly $700mn in the US this year on the Topps trading cards business and vintage sportswear maker Mitchell & Ness. Rubin plans more deals after the fundraising this month, which valued Fanatics at $27bn.
Key to his expansion plans is launching into new business areas, including trading cards and digital collectibles known as non-fungible tokens (NFT). The group is also exploring sports betting after hiring Matt King, former chief executive of FanDuel.
Fanatics is the majority owner of Candy Digital. The platform for NFTs has partnered with Major League Baseball and baseball players since launching in 2021. Candy was valued at $1.5bn after a $100mn fundraising in October.
“Just have a little imagination about what we can do with the fan experience,” Rubin said. “You can start putting merchandise and collectibles together, you include NFTs and trading cards, sports betting, sports rights, some kind of ticketing integration. The experience we can give you as a sports fan could be spectacular.”
The US National Football League, National Hockey League and MLB were among the investors in Fanatics’ funding round this month.
The players’ associations of the NFL and MLB also invested in the round, which was also backed by Alibaba co-founder Joe Tsai and the Qatar Investment Authority, which owns French football team and Fanatics partner Paris Saint-Germain.
Rubin, a minority shareholder in the Philadelphia 76ers basketball team, has built an empire in sports merchandise through a series of partnerships with leagues, teams and their owners and players, some of which are shareholders in Fanatics.
“Lots of players are investors in our business,” said Rubin. “It’s obvious, 40 per cent of the merchandise we sell is player-specific . . . our business told us players are really important.”
Fanatics’ core retail business manufactures kit and merchandise on behalf of teams and runs its own online stores. It also operates online outlets for a number of sports teams and leagues in the US and Europe, including Premier League teams Manchester United and Chelsea.
The group has grown from a 2011 deal in which Rubin’s online retail business GSI Commerce acquired Florida-based sports retailer Fanatics. Rubin then sold GSI to eBay the same year for $2.4bn, retaining the sports business and brand rights.
Its valuation has jumped from $18bn in August 2021, when investors including Japanese technology group SoftBank and US private equity firm SilverLake put $325mn into the company. In 2020, Fanatics was valued at $6.2bn.
Fanatics is on course to make revenues of around $6bn this year when including acquisitions, the group said.
Rubin said the company was profitable and generates cash, with $2bn on its balance sheet. “There’s no pressure to go public this year, for us it’s a midterm thing,” he said. “There’s no rush to do it.”