Fanatics Has "Definitive Agreement" For VF's Licensed Sports Group
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 Majestic will be holding an announcement event later 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 Majestic 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.
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.