Sacra estimates Fanatics hit $7B in revenue in 2023, up 17% year-over-year. The revenue mix breaks down roughly as follows:

Fanatics Commerce (~80% of revenue): Fanatics operates ecommerce sites for over 900 teams, leagues and colleges through exclusive licensing deals, with leagues typically receiving 6-8% of retail revenue

Fanatics Collectibles (~15% of revenue): Acquired Topps for $500M in 2022, generating approximately $1B in revenue

Fanatics Betting & Gaming (~5% of revenue): Nascent division launched in 2023 through acquisition of PointsBet's US business ($130M revenue)

The core merchandise business maintains 40%+ gross margins due to vertical integration of manufacturing and distribution, significantly higher than typical ecommerce. However, profit margins have compressed to mid-single digits in 2023-24 as the company has invested heavily in new verticals like betting.

The company's primary competitive advantage stems from its exclusive long-term licensing deals (typically 15+ years) with major sports leagues and teams.

Fanatics was last valued at $31 billion in December 2022 following a $700 million funding round led by Clearlake Capital Group LP. The company is generating approximately $7 billion in revenue in 2023, implying a ~4.4x revenue multiple on that last valuation.

Key investors include SoftBank Group Corp., Silver Lake, and Fidelity Management & Research Co.

A more recent employee share sale program in 2024 valued the company at $25 billion, representing a 19% discount to the last funding round valuation.

Fanatics began as a roll-up of sports apparel retailers and manufacturers, and today generates ~80% of revenue through two core businesses: 1) being the exclusive maker and distributor of white-labeled jerseys for Nike and major sports leagues, and 2) operating ecommerce sites for over 900 teams, leagues and colleges, securing this position through equity partnerships with leagues (typically 1-2% ownership) and revenue sharing where partners receive 6-8% of all retail sales rather than just profits.

In 1995, Fanatics CEO Michael Rubin launched GSI Commerce, an ecommerce-storefront-as-a-service serving big brands (Ralph Lauren, Dick’s Sporting Goods) and major sports leagues (NFL, MLB, NBA)—in 2011, Rubin sold GSI to eBay for $2.4B, bought back the sports division, and began aggressively acquiring team licensees, apparel manufacturers, and both brick-and-mortar and ecommerce retailers, including the Florida-based Fanatics, which would give the roll-up its name.

Fanatics found product-market fit as a tech-enabled sports merchandise manufacturer and retailer for "displaced fans" - sports enthusiasts who lived far from their favorite teams and couldn't find official team merchandise in local stores.

Over time, Fanatics has expanded beyond merchandise into complementary verticals that leverage its fan relationships and data. The company now operates Fanatics Collectibles (trading cards), Fanatics Betting (sports gambling), and Fanatics Live (live shopping platform). However, the core commerce business remains the foundation, generating approximately 75% of the company's $8B in annual revenue through exclusive partnerships with over 900 sports properties across 11 countries. The model's success stems from its ability to capture "hot market" opportunities that traditional retailers can't service, while creating alignment with leagues by sharing revenue regardless of where products are sold.

Fanatics is a vertically-integrated sports commerce platform that generates revenue through three primary channels: direct-to-consumer merchandise sales, wholesale licensing/manufacturing, and operation of team/league online stores.

The core business leverages exclusive long-term licensing deals (typically 15-20 years) with major sports leagues like the NFL, NBA, MLB and NHL to manufacture and sell official team merchandise.

Fanatics operates on a hybrid revenue model: For direct sales through Fanatics.com and team stores they operate, they capture full retail margins. For wholesale and team store operations, they typically share 6-8% of revenue with leagues/teams. Their vertical integration allows them to maintain 40%+ gross margins compared to traditional retail's 15-20%.

Recent expansion into trading cards (through Topps acquisition), NFTs, and sports betting represents a strategic pivot to monetize their database of 100M+ sports fans through higher-margin adjacent verticals. This expansion strategy aims to increase wallet share from their existing customer base while reducing dependence on traditional retail margins.

Fanatics operates in a market that includes traditional sporting goods retailers, licensed merchandise manufacturers, and emerging digital sports platforms. The competitive landscape has evolved significantly as Fanatics has expanded beyond pure merchandise into betting, trading cards, and digital collectibles.

The largest traditional competitors are Dick's Sporting Goods ($12B revenue) and Academy Sports, who maintain significant brick-and-mortar presence for sports merchandise.

These retailers typically carry licensed products from manufacturers like Nike, Under Armour, and New Era, but lack the vertical integration and real-time manufacturing capabilities that characterize Fanatics' model.

Prior to Fanatics' rise, companies like Majestic Athletic (now owned by Fanatics) and VF Corp dominated the licensed apparel manufacturing space through traditional wholesale relationships with leagues.

Amazon represents the most significant potential threat in online commerce, with its massive scale and logistics capabilities.

However, Amazon's access to licensed sports merchandise remains limited due to Fanatics' exclusive long-term deals with major leagues. The NFL only began allowing licensees to sell on Amazon in 2021 after years of restriction.

Other pure-play ecommerce competitors like StockX ($1.5B estimated revenue) focus on sneakers and collectibles but lack Fanatics' direct relationships with leagues and teams.

In newer verticals, Fanatics faces category-specific competition:

Betting: DraftKings ($2.9B revenue) and FanDuel dominate sports betting with established user bases and technology platforms

Trading Cards: Before Fanatics' acquisition of Topps, the trading card market was controlled by Topps, Panini and Upper Deck through traditional distribution models

Digital Collectibles: NBA Top Shot and other sports NFT platforms compete for digital collecting market share, though with more fragmented rights deals

The key distinction is Fanatics' vertically integrated "v-commerce" model combining manufacturing, licensing and distribution. While competitors may excel in individual categories, none have replicated Fanatics' ability to control the entire value chain from design through delivery while maintaining exclusive long-term relationships with leagues.

This has allowed Fanatics to capture approximately 35% of licensed sports merchandise sales in the US and build a database of over 100M sports fans - assets that provide advantages as they expand into adjacent categories.

Fanatics has tailwinds from the digitization of sports commerce and fan engagement, plus growing global sports fandom, and has the opportunity to expand into adjacent markets like sports betting, live experiences, and international merchandising. The company's unique "v-commerce" model and database of over 100M sports fans provide strong foundations for expansion beyond its current $8B revenue base.

Fanatics has already transformed from a traditional retailer into a vertically integrated platform controlling manufacturing, licensing, and distribution for major sports leagues.

This gives them significant advantages in serving "hot market" opportunities - like when a player gets traded or a team wins a championship. Their real-time manufacturing capabilities and exclusive long-term licensing deals (typically 15-20 years) with leagues create high barriers to entry, even against Amazon.

The core commerce business still has room to grow internationally, particularly in soccer markets where the licensing landscape is more fragmented than US sports.

The company's expansion into sports betting leverages its massive fan database to potentially disrupt incumbent operators like DraftKings and FanDuel.

While those companies spend heavily on customer acquisition, Fanatics can market directly to its existing customers with known team affiliations and purchase histories.

The US sports betting market is projected to reach $40B by 2033, and Fanatics' ability to cross-sell merchandise, cards, and betting creates unique opportunities for customer engagement and retention.

Through acquiring Topps and securing exclusive rights with major leagues, Fanatics has positioned itself to modernize the $25B trading card industry. S

imilar to their commerce strategy, they're vertically integrating manufacturing, distribution, and increasingly the secondary market for cards. This allows them to capture more value across the ecosystem while providing better experiences for collectors.

The collectibles business also provides natural expansion opportunities into adjacent areas like grading, insurance, and digital collectibles/NFTs.

The company's expansion strategy mirrors Disney's historical success in monetizing IP across multiple channels.

By controlling key sports licensing rights and having direct relationships with fans, Fanatics can continue expanding into new verticals that enhance the overall sports fan experience. While execution risks exist in newer businesses like betting, the company's proven ability to transform traditional sports retail suggests similar opportunities to modernize and grow these adjacent markets.

1. League Relationship Dependencies: Fanatics' entire business model is built on exclusive, long-term licensing deals with major sports leagues. While these partnerships currently create a powerful moat, they also concentrate risk - if leagues become dissatisfied with the arrangement or feel Fanatics has too much power, they could begin fragmenting rights across multiple partners.

There are already early warning signs, like the NFL permitting licensees to sell on Amazon starting in 2021. The company's strategy of giving leagues small equity stakes (1-2%) may not be enough to maintain alignment as Fanatics' influence grows.

2. Manufacturing Integration Challenges: Fanatics' "v-commerce" model depends heavily on vertically integrated manufacturing to enable real-time production.

However, the company faces significant operational complexity in managing this infrastructure - from forecasting demand to maintaining quality at scale. Recent customer complaints about jersey quality and manufacturing errors suggest these challenges are already manifesting. Poor execution here could damage both consumer trust and league relationships simultaneously.

3. Core Business Growth Plateau: With ~35% share of licensed sports merchandise and slowing growth in the core retail business, Fanatics is aggressively expanding into adjacent verticals like betting and collectibles.

However, these new ventures face entrenched competitors and require different core competencies. If these bets fail while the merchandise business plateaus, Fanatics could struggle to justify its $31B valuation and face pressure from investors who backed its expansion vision.