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Volume 25 No. 26
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Fanatics Carves Out Niche With Sports Apparel In Competitive Online-Retail Industry

Apparel companies have "traditionally been poorly positioned to meet the accompanying fan demand as it surges," but Fanatics is "changing that and, in the process, carving out a lucrative niche in a fiercely competitive online-retail industry," according to Zach Schonbrun of the N.Y. TIMES. Fanatics "has licensing rights" with the NFL, NBA, MLB, NHL, more than 500 colleges, NASCAR, MLS and PGA Tour. The company is "integrating design and manufacturing with distribution to fulfill orders within hours." As a result, Fanatics has "more than doubled its revenue in just a few years." It "expects to take in" $2B in '17 and to "ship more than 10 million items from Nov. 27, Cyber Monday, to Christmas." The strategy "has attracted" a $1B investment from Japanese firm SoftBank. Alibaba "has also taken a stake." Fanatics Founder & Chair Michael Rubin said that his company’s licensing deals, which "run from 13 to 17 years long with each of the four major professional sports leagues, are exclusive enough that 'somebody can’t be a significant player without the rights that we possess.'" Patriots Owner Robert Kraft said, "The industry needed to be disrupted. [Rubin]’s brought tech, innovation and a vertical on-demand model that’s brought agility to an industry that hadn’t changed much in decades.” Among the micro-moments that highlighted the new need for speed was Jeremy Lin’s "emergence as a sudden star" for the Knicks in '12. Rubin: "When Linsanity happened, within 12 hours to 24 hours, there were no jerseys to get. So you had this huge demand, and there’s no jerseys available. Then you order them like crazy, and by the time they get in, the moment’s over." NBA President of Global Partnerships Sal LaRocca said the episode "was a large catalyst in moving to where we ultimately moved to with Fanatics" (N.Y. TIMES, 11/21).

STAYING ON THE ICE: In this week's SPORTSBUSINESS JOURNAL, Terry Lefton notes Fanatics has "extended its omnibus NHL rights deal" to '34, "adding even broader rights to a deal that already included replica jerseys and championship apparel." Under the new deal, Fanatics "gets additional broad exclusives, including worldwide e-commerce rights, excluding China." It also has "rights to manufacture, market and sell all of the NHL’s top-shelf 'Center Ice' collection, including name and number apparel, with the exception of authentic (on-ice) NHL jerseys." The new agreement also "grants Fanatics headwear exclusivity within the sporting goods retail channel" (SPORTSBUSINESS JOURNAL, 11/20 issue).