Unbundle Fanatics' E-commerce Role
Scott Sillcox, sports licensing consultant, on the economics of Fanatics' contracts
The key issue is channel control versus supplier neutrality. Fanatics is strongest when it runs the league store as a marketplace that carries the widest set of licensed goods, but that role gets harder to defend once the same company also owns brands, manages licensing, and uses league storefronts to push its own inventory. The more Fanatics expands beyond retail, the more leagues have to ask whether the store operator is still acting like a neutral shelf.
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In practice, the ecommerce business is the traffic gatekeeper. Fanatics runs hundreds of league and team stores and this retail operation still drives about 80% of company sales, which means product placement, search ranking, and which sellers get access to demand all sit inside the same company that also owns merchandise brands like WinCraft, Mitchell & Ness, and Topps.
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The conflict is most visible in assortment and distribution. League stores are supposed to offer the broadest catalog from all licensees, but if Fanatics also manufactures mugs, jerseys, or memorabilia, it has a direct incentive to feature its own goods first. The same logic extends to Amazon, where MLB licensees have been restricted while the NFL has started to open up.
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There is already a precedent for leagues rediscovering the value of competition. In the interview, the NFL example from the 2010s shows that moving away from a single all powerful supplier increased competitive pressure and helped sales. That is why a future split would likely mean not removing Fanatics, but cutting it back to one role in a broader vendor set.
The likely direction is structural unbundling. As Fanatics pushes deeper into betting, collectibles, events, and owned brands, leagues will have a stronger reason to separate the neutral store operator function from the businesses that compete for shelf space. That would make sports licensing look less like one vertically integrated stack and more like a controlled but competitive marketplace.