FANATICS

Michael Rubin was 14 years old when he started a ski equipment business out of his parents' basement in Conshohocken, Pennsylvania. By the time he was 16, he had rented a storefront.

By 18, he had multiple locations. This is not a normal origin story.

He eventually built that into a company called Global Sports, which became one of the early leaders in sports e-commerce in the late 1990s. GSI Commerce — as it was renamed — became the backend e-commerce operator for major retailers who had no idea how to sell things online.

He sold GSI Commerce to eBay in 2011 for $2.4 billion. He was 38.

But before that deal closed, Rubin did something clever. He carved out the sports merchandise and fan gear business — including a small company called Fanatics — and kept it for himself.

eBay got the e-commerce services operation. Rubin kept the part that would eventually be worth $31 billion.

Fanatics at that point was still a relatively normal online sports retailer. What Rubin did next is what changed everything.

Instead of competing with traditional retailers on price or selection, he went directly to the leagues and renegotiated the licensing deals. He convinced the NFL, MLB, the NBA, and eventually everyone else that a vertically integrated partner — one that could design, manufacture, and ship merchandise fast — was worth more than the legacy setup.

By controlling the manufacturing and the licenses simultaneously, Fanatics became the only game in town.

The core business sounds simple: sell licensed sports merchandise online. Jerseys, hats, hoodies, all the stuff you buy after your team wins a championship or when your favorite player gets traded and you need a new name on the back.

But the real business model is vertical integration and licensing lock-in. Fanatics doesn't just sell the stuff — they design it, manufacture it, warehouse it, and ship it.

They hold the official licensing rights directly from the leagues, which means they control what merchandise gets made and who can sell it. Retailers who want to stock official NFL gear increasingly have to go through Fanatics.

The on-demand manufacturing capability is the technical moat. Traditional sports merchandise had a massive problem: you'd print 50,000 units of a player's jersey and then he'd get traded or suspended and you'd be stuck with inventory.

Fanatics built a system that lets them manufacture closer to real demand — even printing individual units after an order comes in. That's why you can order a jersey the night a player wins an MVP award and it shows up within a week.

The revenue model layers from there. Fanatics makes money on direct-to-consumer sales through their own site, through white-label stores they run for the leagues themselves, through wholesale to other retailers, and through the league partnerships where they share revenue.

They also operate the official team stores for hundreds of sports teams. The platform is the product — but the licensing library is the real asset.

The core product is the Fanatics e-commerce platform — the website and app where fans buy official licensed merchandise for the NFL, NBA, MLB, NHL, NASCAR, college sports, international soccer, and dozens of other leagues. It's the largest online retailer of licensed sports merchandise in the world, and it also powers the official online stores for most major professional teams and leagues under white-label arrangements.

Fanatics Collectibles is the trading card and memorabilia business. After acquiring the exclusive trading card manufacturing licenses from both Topps (MLB, UFC, MLS) and Panini (NBA, NFL, NASCAR), Fanatics now controls the entire American sports trading card market.

They produce physical cards, digital collectibles, and authenticated memorabilia. The business launched its first products in 2023 and 2024 under the Fanatics brand after years of preparation.

Fanatics Betting & Gaming launched in late 2023 following the acquisition of PointsBet USA. The sportsbook operates in multiple US states and is attempting to leverage Fanatics' existing customer database to acquire bettors more cheaply than competitors can.

The app integrates merchandise rewards with betting activity — a rewards program that gives bettors Fanatics store credit, which is clever because it keeps money cycling within the Fanatics ecosystem.

Fanatics Live is a live-stream shopping platform specifically for sports collectibles and trading cards — essentially QVC for sports memorabilia, where sellers can auction and sell cards directly to collectors via livestream.

The counterintuitive move was going upstream. Most e-commerce companies try to win by being cheaper or faster.

Rubin went to the source — the leagues themselves — and made Fanatics so indispensable that the leagues became equity holders.

The NFL, NBA, MLB, the NHL, and the MLS all hold equity stakes in Fanatics. The leagues are literally investors in the company that holds their merchandise rights.

That alignment is the entire defensive moat. When you own a piece of the company that sells your stuff, you don't shop around for alternatives.

The second growth move was the data asset. After two decades of selling merchandise, Fanatics has first-party purchase data on over 100 million sports fans.

They know who you root for, what you buy after a big win, how much you've spent, and what leagues you follow. That database is what made the pivot into sports betting and trading cards make sense.

Fanatics Betting & Gaming launched in 2023 by acquiring PointsBet's US operations for $150 million. The trading card business — Fanatics Collectibles — acquired the licensing rights from Topps and Panini, the two companies that had dominated that market for decades, and launched in 2022.

Rubin's playbook is: build a massive fan database, lock up the licensing rights, then sell that same audience multiple products across multiple categories. He's not building a merchandise company.

He's building a sports fan monetization platform.

The challenge with being dominant everywhere is that everyone eventually notices. Fanatics has faced growing antitrust scrutiny over its licensing arrangements with the major sports leagues.

When one company controls the merchandise rights for every major American sport simultaneously, and those same leagues are shareholders in that company, regulators start asking questions. That scrutiny hasn't produced action yet, but it's a real long-term risk.

The expansion into sports betting is the bigger near-term gamble. The sports betting market is brutal — DraftKings, FanDuel, and BetMGM have already spent billions establishing brand loyalty.

Fanatics Betting & Gaming is the new entrant in a market where the incumbents have multi-year head starts and deep-pocketed parent companies. Having 100 million fans in a database is a real advantage, but converting those customers into bettors when they already have accounts with competitors is genuinely hard.

The PointsBet acquisition got them the technology and state licenses fast, but market share in sports betting is expensive to buy.

The trading card business also came with problems. The transition from Topps and Panini to Fanatics Collectibles was rocky — longtime collectors were furious about quality control issues and printing delays in the early product releases.

In a category where brand trust and product quality are everything, a bad first impression sticks.

Rubin is essentially running three different businesses simultaneously, all of which are capital-intensive, all of which face serious incumbents. The merchandise business funds the bet.

But it has to keep performing while the new bets mature.

The investor roster reads like a who's who of people who want access to sports fans' wallets. The major sports leagues themselves — the NFL, NBA, MLB, MLS, and NHL — all hold equity stakes in Fanatics, which is the most important investor relationship in the company's history.

When your licensing partners are also your shareholders, the alignment solves a lot of problems before they start.

SoftBank Vision Fund led a $350 million investment in 2020, valuing the company at $6.2 billion. That was before the collectibles and betting expansions were fully underway.

By 2021, Fanatics raised another massive round — $325 million at an $18 billion valuation — with participation from Silver Lake, Fidelity, and various sovereign wealth funds. The 2022 round pushed the valuation to $31 billion, making it one of the most valuable private companies in the US at the time.

Individual athlete-investors have also come on board, including LeBron James, Tom Brady (before his NFL return), Derek Jeter, Peyton Manning, and others. These are not passive check writers — having star athletes invested in Fanatics creates natural marketing partnerships and social proof that money can't easily buy.

When LeBron James wears Fanatics merchandise and is also an investor, it's not an accident.

Rubin himself has been the consistent controlling shareholder throughout, having retained his equity position from the GSI Commerce carve-out and grown it through every subsequent funding round.