Fanatics Abandons Sports Franchise Ownership in Favor of Retail/Online Sports Betting
June 23, 2022
If there were any doubts about how Fanatics CEO Michael Rubin feels about the future growth of the U.S. sports betting market, those doubts can no be removed. Rubin has announced his intention to sell his 10% equity stake in Harris Blitzer Sports & Entertainment (HBSE). Yes, that’s the same corporation that owns the NBA’s Philadelphia 76ers and the NHL’s New Jersey Devils.
Fanatics has already made its mark on the U.S. sports industry as one of the largest licensed sellers of college and professional sports merchandise. The company has also been the recipient of large invests from investors like
- The NFL
- The NFL Players Association
- The NHL
- Major League Baseball (MLB)
- The MLB Players Union
- Institutional investors like Black Rock, Fidelity, and Michael Dell (Dell Computers)
With the help of their sports business ventures and the aforementioned investors, Fanatics has a current valuation of approximately $27 billion.
Addressing Conflict of Interest Issues
The gambling community and professional sports will always have an uneasy relationship. It’s for this reason that Rubin has decided to forgo his involvement in the U.S. sports industry in favor of making a huge leap of faith in the U.S. sports betting community. In a press release, Rubin recently stated:
“As our Fanatics business has grown, so too have the obstacles I have to navigate to ensure our new businesses don’t conflict with my responsibilities as part-owner of the Sixers. Given these realities, I will sadly be selling my stake in the Sixers and shifting from part-owner back to a life-long fan.”
By relinquishing his ownership in sports franchises in favor of his new BetFanatics sports betting brand, it opens the door to his BetFanatics brand being able to go out and negotiate sponsorship deals with professional sports leagues, teams, and players. His company will be able to start this process in earnest as soon as the sale of his professional sports assets is complete.
Prior to the sale, Rubin has been investing a lot of time and money resources while trying to accumulate the functional resources he will need to launch BetFanatics.
While the BetFanatics retail/online/mobile sports betting platform will serve as the company’s business cornerstone, it’s not likely that Rubin will be satisfied to rest on his laurels. Instead, it’s a good bet he will be looking for other opportunities to assume a bigger role in the U.S. sports betting industry. It’s certain that he will be using his merchandise business as a way of connecting to individual players with whom he has already had interactions.
It's worth noting that Colorado Rockies (MLB) outfielder Charlie Blackmon was the first U.S. professional baseball player to sign an endorsement deal with a U.S. sportsbook. Clearly, Rubin intends to get his BetFanatics brand involved in similar deals.
In a touching farewell to Rubin, HBSE Founder, and Managing General Partner Josh Harris stated:
“Given Michael’s tremendous success growing Fanatics into a global platform across every major sport, his decision doesn’t come as a surprise. I am so grateful for his years of partnership. His fierce passion, entrepreneurial mindset, and steadfast commitment to doing the right thing have left an indelible mark on the Sixers organization.”