Leagues Should Diversify From Fanatics

The strategic risk for leagues is that Fanatics is no longer just a seller, it is becoming the system that decides what gets made, where it gets sold, and which products get the best placement. That is efficient in the short run, but it gives one partner too much leverage over merchandising, distribution, and customer access. As Fanatics has grown to roughly 35% of licensed sports merchandise sales in the U.S., leagues have stronger reasons to reopen space for other licensees and channels.

• Fanatics sits in several positions at once. It runs team and league online stores, owns brands like WinCraft, Mitchell & Ness, Topps, and Majestic, and in some cases manages licensing through FLM. In practice, that means the same company can both approve license structures and benefit when its own products get featured most prominently.
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• The money flow helps explain why leagues tolerated this concentration. Fanatics powers more than 900 storefronts and typically shares a slice of retail sales back to leagues, while some leagues also hold small equity stakes. That aligned incentives when online commerce was fragmented, but becomes harder to justify once one partner controls so much of the shelf space.
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• Diversifying away from a single source would not remove Fanatics, it would redefine its role. Fanatics Commerce still made about $6.2B in 2024, or 77% of company revenue, but faster growth is now coming from collectibles and betting. That gives Fanatics room to stay important even if leagues spread merchandise rights across more partners.
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The next phase is likely a more plural market, with Fanatics remaining the biggest node but not the only one. Leagues should increasingly separate ecommerce operation, product licensing, and marketplace access, which would reduce concentration risk and push Fanatics to compete more on product quality, merchandising, and consumer experience.