Fanatics Has Billion-Dollar Aspirations for Its Memorabilia Arm
Should the Tampa Bay Buccaneers win on Sunday, Tom Brady fans will be able to buy signed Super Bowl memorabilia before the quarterback has even lifted the Lombardi Trophy.
Brady is one of 150 athletes signed to exclusive deals with Fanatics Authentic, the e-commerce giant’s growing memorabilia arm. He’s already committed to sign photos, balls, helmets and jerseys if the Buccaneers win, and he’s not alone. The company has deals in place with roughly 10 athletes on the field Sunday (some exclusive, some not) and will have listings ready to go moments after the final whistle.
That’s the speed at which memorabilia moves nowadays, and Fanatics, which brought the same urgency to apparel over the last decade, is trying to move faster than everyone else. Fanatics Authentic did more than $200 million in sales last year, up from $10 million when it entered the business in 2012, and the company believes it could soon be a billion-dollar enterprise.
“Our business model allows us to pivot, almost immediately, based on what fans are telling us they really want,” Fanatics executive vice president Victor Shaffer said in an interview. “We move as quickly as the rest of the company.”
Being first-to-market has obvious benefits, but Fanatics has more specific motivations. A fan’s passion burns brightest immediately following a big win—you’re more likely to buy that Division Champions shirt directly after the game, as opposed to three days later—and Fanatics has grown adept at offering products in that critical window. The company calls them “hot markets.”
Fanatics isn’t alone in accelerating the memorabilia industry. Topps sells limited edition trading cards following big moments, and NBA Top Shot is creating a new class of collectible, digital highlights, which also go up for sale quickly. It’s also not alone in signing athletes to exclusive deals—Panini’s stable includes David Beckham and Ja Morant.
But Fanatics, owned by billionaire Michael Rubin, is able to leverage its scale as the world’s largest seller of licensed sports merchandise, its relationships with teams and leagues, and its e-commerce platform to its advantage. The company operates the online shop for every major U.S. sports league, and hundreds of colleges and pro teams (including the Chiefs and Bucs). It also operates 50 or so in-stadium stores.
“We’re really the only memorabilia company that has the majority of its revenue come from direct-to-consumer e-commerce transactions,” Shaffer said. “As a part of the Fanatics family, we’re able to use those exclusive relationships and offer product directly to fans, as opposed to the wholesale model, where the rest of the industry sits.”
Fanatics’s exclusive athletes include Brady, Steph Curry and Aaron Judge. Those contracts ensure authenticity and create their own demand—no one else will be selling signed Tom Brady Super Bowl items. They also simplify the process around games like the Super Bowl.
For its non-exclusive athletes, Fanatics negotiates one-off contracts. Those generally come together prior to kickoff, but are occasionally negotiated with agents live, during the game, or right afterwards, Shaffer said.
Speed has changed the industry, according to Russ Spielman, executive vice president at GSE Worldwide. Star players now have a number of post-Super Bowl deals pre-negotiated and contingent on them winning, whether its memorabilia commitments or corporate appearances.
“These if-win instantaneous deals have become a lot more prevalent in recent years, because the turn time on the merchandise and memorabilia has become so much shorter,” said Spielman, whose agency represents former NFL stars Steve Young and Warren Moon, and current players Melvin Gordon III and Jarvis Landry. “Companies like Dick’s and Fanatics, the companies that can directly monetize these opportunities immediately, they’re the ones pushing things.”
Rubin purchased Fanatics in 2011 and combined it with U.S. league relationships from a prior venture. A year later Fanatics purchased Dreams Inc., parent of collectibles company Mounted Memories, for $183 million, which launched its entry into memorabilia. The company has since bolstered the business through internal growth and acquisition, including a purchase of assets and inventory from Steiner Sports in 2019.
Memorabilia is just one of a number of areas the company is looking to expand beyond its apparel roots. It also has a growing live events business, and recently purchased hard-goods maker WinCraft to broaden its reach in items like golf bags, pennants, umbrellas and coolers. Fanatics recently raised $350 million, its final round of private financing before going public.
Though Fanatics memorabilia listings will be posted in the moments after the Super Bowl ends, athletes like Brady generally won’t sign anything until a week or two after the game. That delay, appreciated by the athletes, allows Fanatics to monitor what’s hot, and change its inventory before the athlete signs.
As an example, Shaffer mentioned 2020 World Series MVP Corey Seager, another exclusive Fanatics Authentic athlete. In the moments after the Los Angeles Dodgers won the title, the company posted a handful of Seager autographed items. By the time he was set to actually sign them, the company had noticed that the Seager MVP balls were more popular than other items. So Fanatics had Seager sign more balls.
“We go in with assumptions—we think we’re going to sell x number of helmets, y number of jerseys and z number of photos,” Shaffer said. “We had no way of knowing that would happen prior to them starting to sell.”
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