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Volume 21 No. 26
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MLS extends Fanatics deal, with aim of broadening product lines

Editor’s note: This story is revised from the print edition.

Major League Soccer and Fanatics have signed a long-term agreement that will see an extension of their e-commerce partnership globally, as well as a shift in the league’s approach to licensing.

MLS also made an investment in Fanatics during a recent funding round for the company, according to industry sources. The NFL, MLB and NFL Players Association also participated in a separate funding round.

The amount of that investment could not be determined. MLS and Fanatics declined to comment on the investment.

As part of the new agreement, to begin in 2019, Fanatics will be given the exclusive right to produce all fan gear apparel, headwear and hard goods for all retail and wholesale channels. It will also, in consultation with MLS, sublicense rights to other brands to produce MLS merchandise and service other distribution channels outside of its core categories. Terms of the deal were not disclosed.

The consolidation of MLS licensing rights will work alongside the league’s new six-year deal with Adidas, a $700 million renewal it signed in July that includes all products worn on the field by MLS players and technical staff. MLS has more than 50 licensees.

Fanatics, MLS’s e-commerce partner, will produce fan gear and sublicense other rights.
Kathy Carter, president of MLS’s commercial arm, Soccer United Marketing, said that as the league began its renewal discussions with Adidas, it researched the products that it was offering fans. While MLS found that fans liked the athletic gear produced by Adidas, fans were being underserved because of the lack of diversity of product lines.

The renewal with Adidas focuses heavily on products used on the field, which allowed MLS and Fanatics to discuss these other products, Carter said.

Carter said she expects fans will see a significant increase in the number and range of products available when the partnership begins.

Carter said the league expects that merchandise revenue will see increases as well, but could not provide a specific target. MLS and Fanatics expect the new fan gear apparel and accessories to be at retail before the 2019 season.

Gary Gertzog, Fanatics president of business affairs, said the new agreement not only should provide a broader assortment of products for fans but also “allow the league to chase market trends” by activating new league licensing rights in categories such as hot market and name and number products.

The expansion of the agreement with MLS represents a deeper push into soccer and global markets for Fanatics alongside the league, Gertzog said. Fanatics’ localized Canadian e-commerce platform is expected to launch in 2018, and it will significantly expand the availability of MLS products around the globe both online and through wholesale.

In Februrary 2016, Fanatics acquired Kitbag, an England-based e-commerce company that operates the online and retail business for teams such as Manchester United, Real Madrid and Manchester City. Gertzog called it “like a mini-version of Fanatics in the U.K.”

Also as part of the deal, Fanatics will continue to operate the league and team’s e-commerce platform, and also will take over exclusive on-site operations at league events such as the MLS All-Star Game. Fanatics is the in-venue retail provider for five MLS clubs — Atlanta United, Chicago Fire, Houston Dynamo, Minnesota United and Vancouver Whitecaps. Gertzog said Fanatics already has several other clubs under contract for next season but declined to comment further.