The Far Reach of Fanatics

Earlier this month, Fanatics revealed that it was purchasing VF Corporation’s sports business, which includes Majestic Athletic, a leading licensee of the U.S. pro sports leagues. This is just the latest step in the company’s continuing march toward sports-licensing domination over the past couple of years, and it seems like a good opportunity to take stock of the company’s role in the U.S. sports licensing business today.

While Fanatics came on the scene as an e-commerce platform for sports licensing, and has become the leading player in that arena, it has also moved into product sourcing and bricks-and-mortar retail, among other business segments. Some key developments over the last 12 to 18 months include:

• Expanding its merchandise and manufacturing capabilities. In advance of the VF deal, which brings a significant manufacturing infrastructure to the company, Fanatics had launched Fanatics Branded, an in-house merchandise division, to create licensed products for sale through its e-commerce and other distribution channels. The new division solidified Fanatics’ positioning as a licensee and not just a distributor.
• Serving as a master licensee for major leagues and players associations. Fanatics’ entry into manufacturing has enabled it to secure rights to produce and distribute Major League Baseball and Under Armour fan gear, including jerseys, for consumer retail outlets. (Under Armour simultaneously was awarded the license for on-field MLB gear.) Fanatics also became the official manufacturer of National Hockey League apparel and headwear and the master licensee for NFL Players Association goods; existing NFLPA partners are transitioning into sub-licensees of Fanatics.
• Expanding into bricks-and-mortar retail. Fanatics oversees the NBA’s flagship retail outlet in Manhattan, became the official trackside licensee for NASCAR, and has secured stadium retail rights for teams in football (Atlanta Falcons), baseball (Oakland A’s), hockey (San Jose Sharks, Phoenix Coyotes), soccer (Atlanta United, Houston Dynamo and Dash), and the collegiate market (University of Houston). The NHL deal, above, also includes overseeing on-site retail for NHL events.
• Consolidating its e-commerce strength. The company purchased Kitbag, the leading sports-merchandise e-commerce provider in Europe, giving it e-commerce rights for a long list of European football teams as well as tennis and racing events. Fanatics also continues to add pro and college teams to its extensive e-commerce roster, including, most recently, the University of Kansas, Oregon State, University of Wisconsin, and Cincinnati Bengals. Fanatics’ strengthened manufacturing capabilities allow it to create custom merchandise for these venues, expanding the product assortment available through e-commerce.
• Boosting its memorabilia business. Fanatics has garnered exclusive collectibles and memorabilia rights, including for signed objects, for a number of current and former athletes, including the Winnipeg Jets’ Patrik Laine, Chicago Cubs’ Jake Arrieta, UFC champion Ronda Rousey, and Green Bay Packers’ Aaron Rodgers.
• Increasing its presence in sports beyond the major U.S. leagues and colleges. Fanatics handles e-commerce and/or retail activities in the U.S. (and sometimes abroad) for global football/soccer clubs and events including Tottenham Hotspur and the International Champions Cup; the America’s Cup sailing regatta; boxing brand Golden Boy Promotions; golf licensors including USA Golf, the European Tour, and The Ryder Cup; auto racing entities including Dover International Speedway; and horse racing properties including Churchill Downs.
• Dipping a toe into non-sports. Fanatics is overseeing an athleticwear array under the RUN-CTY label in collaboration with hip-hop group RUN-DMC. The city-specific brand (which is customized as RUN-CHI, RUN-OKC, etc.) grew out of a partnership between RUN-DMC and the Yankees. The latter had nicknamed its lights-out bullpen “No Runs DMC” in 2016, leading to an apparel line under that name.

All of this activity has been worrisome to sports merchandise retailers and licensees, many of which see Fanatics as a threat. On the other hand, the licensors that work with the company tout as benefits its close relationship with consumers, its ability to react quickly to market trends and customer needs, and the synergies it offers between retail and e-tail. Time will tell what Fanatics’ next moves will be and, more importantly, the ramifications on sports licensing.

Fanatics’ Cole Gahagan will present the opening keynote on May 23 at Licensing Expo 2017 in Las Vegas. If you will be at the show, check out Karen Raugust’s Licensing University panel, “Capsules, Collaborations, and Limited Editions: Opportunities and Pitfalls,” with speakers including Christine Cool of Perfetti Van Melle, Carla Silva of King Features, and Pamela Deese of Arent Fox. If you would like to share your news with Karen before the show, or in person on site, contact her here.