SBD/April 4, 2017/Marketing and Sponsorship

Fanatics' Purchase Of VF's Licensed Sports Group To Have Big Implications On Retail Biz

Fanatics has reached a "definitive agreement" to acquire VF's Licensed Sports Group (LSG), which has held exclusive MLB jersey rights since '05. News of the pending acquisition was announced just before the start of trading this morning on the NYSE. The transaction is expected to close in Q2 and is subject to standard closing conditions. Terms were not disclosed. Fanatics, MLB and VF-owned Majestic will be holding an announcement event at 2:00pm ET today at the Majestic manufacturing facility in Easton, Pa., with MLB Commissioner Rob Manfred, Fanatics Exec Chair Michael Rubin, Pennsylvania Gov. Tom Wolf, state Attorney General Josh Shapiro and LSG President Mike Pardini. The move continues Fanatics' rollup of licensing rights, e-commerce operations, along with brick-and-mortar venue sales, and a push into a vertical arrangement, within which it controls much of the sports-licensing business from end to end. VF put LSG up for sale last year. With annual sales of around $500M, VF’s sports licensing unit that includes LSG has rights with all four major stick-and-ball leagues, along with NASCAR and many colleges. Majestic is easily Fanatics' largest acquisition to date, and will add to its significant domestic manufacturing capabilities. VF/Majestic employs around 600 people in its Easton, Pa., plant, which is largely responsible for MLB jersey production.

BIG MOVE: Licensing industry sources today were still assessing the meaning of the deal and had more questions than answers. Fanatics’ already pervasive influence over the licensed-sports industry just increased exponentially with the addition of domestic manufacturing capabilities. However, an industry source said, "The industry just got smaller. Does this mean Fanatics will purchase from fewer licensees?” Another possible flashpoint could be Fanatics' relationships with larger licensed sports retailers, since the purchase of VF’s LSG leaves Fanatics in the position of both supplying retailers with product and competing with them to an even greater extent. A sports retail source said, "As soon as the deal closes, any retailer writing orders for MLB jerseys is putting money in Fanatics pocket. So the question is whether someone like Dick’s (Sporting Goods) will want to do that when they are already pushing their own e-commerce play.’’

BASEBALL FEVER: MLB in October struck a deal with Under Armour and Fanatics, making them MLB’s replica and on-field jersey rightsholders beginning in '20. That left VF/Majestic in the unprecedented position of being a three-year lame duck licensee with a major sports property. Fanatics' pending LSG acquisition means that UA-branded MLB authentic (on-field) jerseys and Fanatics replica MLB jerseys will likely be at retail long before '20. Over the past several years, Fanatics, once considered solely a back-end e-commerce provider, has amassed a slew of rights across leagues and teams. That includes licensing rights across colleges, MLB, NASCAR, NBA, NHL, NFL and NFLPA, ranging from on-field to replica jerseys.
Return to top
Video Powered By - Castfire CMS Powered By - Sitecore

Report a Bug