Fanatics: A Recent Analysis of Their Current Events

In this post, I will list and analysis some notable current activity of Fanatics from the past year so we may all be better prepared for our visit to their headquarters over spring break.

Fanatics Has Record Super Bowl Sales After Targeted Ads

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Following this most recent Super Bowl, Fanatics has had record sales on sports merchandise. This was mostly due to a surprise win by a very passionate fanbase (Fly Eagles Fly!) and targeted advertisements to potential customers throughout Facebook and Instagram. Fanatics partnered with Facebook and its Dynamic Ads to reach fans immediately after the big game and were prepared to handle orders as soon as the clock hit “double zeroes”. Fanatics, which has partnered with the NFL for all of its E-Commerce, found that it had a much higher click rate on its advertisements which featured merchandise that was worn post-game by players.  This was their second biggest ever single event that generated sales in company history, following only the 2016 Cubs winning their first championship in over 100 years. Events like the Super Bowl are incredibly profitable to all firms involved, as millions of people use Facebook and are were interested in buying official NFL gear from Fanatics as soon as the game was over. Here is a fun GIF that shows the orders of gear following the Super Bowl:

http://www.adweek.com/digital/fanatics-targeted-fans-on-facebook-and-instagram-to-score-massive-super-bowl-sales/

 

Partnership with American Express and NBA

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Ever buy a jersey of one of your favorite players, only for them to leave the team? Well, now if you ordered a basketball jersey on NBAStore.com or Fanatics.com with an American Express card, you can breathe easy. Thanks to a partnership between American Express and Fanatics, you can either exchange an obsolete jersey for a current jersey of the same player on a new team, or a different player on the original team. This is an extension of the Jersey Assurance Program, which used to be an only 90 day policy in the past. This comes at a pivotal time for all parties involved, as this upcoming free agency is going poise to potentially have massive stars like Lebron James or Paul George switch teams. All three parties hope this creates an incentivized atmosphere for fans to buy their favorite jerseys and increase sales without having to worry about wasting their money. Additionally, Fanatics and American Express have in the past collaborated on campaigns for $15 discounts if you tweet #AmexFanatics, so keep an eye out for any future deals.

https://www.forbes.com/sites/alikocarter/2018/01/25/obsolete-jerseys-a-fear-no-more-as-american-express-partners-with-fanatics/#65273cd73663

 

Massive New Deal with the MLS Adds to Banner Year

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Fanatics and the MLS have announced a massive deal that builds upon an already established relationship between the two major companies. Their previous agreement gave Fanatics the right to all E-Commerce for the league through their websites. However, this new deal allows Fanatics to manufacture and sell all related MLS merchandise other than their the official Adidas jerseys, which they can only sell. Also included in the deal was that the MLS invested into Fanatics, purchasing a small equity stake in the firm. This is not the first time that Fanatics has had this type of deal, as they have agreed to similar terms with the NFL, NFLPA, and MLB. This great news is just the most recent for Fanatics, which is quietly having an outbreak year. Fanatics now runs the official online commerce for the NFL, MLB, NBA, NHL, MLS, NASCAR, and PGA Tour on top of already having manufacturing rights to NFL, MLB, NBA, and now the MLS. It is safe to say that if you are an American sports fan and have purchased a jersey within the last year, you probably have done business with Fanatics one way or another.

https://finance.yahoo.com/news/major-league-soccer-invests-fanatics-signs-long-term-rights-deal-120002384.html

Fanatics Raises $1B from SoftBank’s Vision Fund106397785-1.jpg

     Fanatics has closed a one billion dollar round from SoftBank’s Vision Fund, which gives the company a $4.5 billion total valuation. This is huge for Fanatics, who has stated in the past they are trying to target markets in Europe, Asia, and Africa. SoftBank has plenty of experience in the sports apparel industry within those markets and hopes to help expand Fanatics, whose international sales are only 10% of total sales. Fanatics CEO Doug Mack stated that “We’ve only scratched the surface of the global opportunity. Soccer is the world’s No. 1 sport, and then there’s cricket. You’ll see us extend our rights to international leagues.” In addition to buying licensing rights to other foreign leagues, Fanatics also hopes to make their manufacturing and processing more efficient with the money that have raised. Fanatics has also bought competitors like Majestic to vertically integrate their production and acquire manufacturing rights. As of now, Fanatics does not plan on going public and plans on spending their money on more licensing agreements with other leagues to expand their scope on sports sales.

https://www.reuters.com/article/us-fanatics-funding-softbank-group/sports-e-commerce-firm-fanatics-closes-1-billion-funding-round-led-by-softbank-idUSKCN1BH1DH

 

Conclusion

      I hope that this list helps shine some insight on what Fanatics has been up lately and leads to some quality questions being asked when we visit them. Some questions that I have for Fanatics right now would they plan on competing with Amazon’s two day Prime shipping, even though you cannot buy official gear off the Amazon website. Would it make sense for them to partner with Amazon for their current shipping logistics, or should they create their own shipping strategies in house. What would you guys do next if you were the CEO of Fanatics?

6 thoughts on “Fanatics: A Recent Analysis of Their Current Events

  1. Jacob, loved to read this! I was really interested int he deal with Amex that you talked about, it is awesome to see them making the experience especially user friendly. I also like to see their focus on international markets. I know soccer jerseys internationally are more common than Patagonia at Boston College, so it would be a great opportunity. However, the e-commerce giant still stands int heir way. As @abbykonkoly outlined, they have the licensing currently, but they need to maintain their leverage to keep it in the future. I really loved the heat map that you used as well, with Fanatics being able to make the championship merchandise so quickly, I wonder if there were even any “6 rings” T-shirts even made haha. Great post!

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  2. Hey Jake, great post! I find the concept of extending their rights to international leagues really valuable, as going global is certainly part of the trend we are seeing across various industries. This will allow Fanatics to penetrate other markets, create more revenue, and become not just a domestic player but an international one as well. I think the relationships Fanatics has built are another indicator of their success and value as a firm. Major sports leagues are the true drivers of professional sports in our countries and I think both parties definitely benefit from the mutual partnership, as well as all of us sports fans!

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  3. Great post, Jake! You highlighted a lot of things that also complemented my research, so I loved hearing another perspective on the company. I’m interested in the questions you posed about shipping – I think partnering with Amazon for shipping logistics could potentially hurt the Fanatics brand in the long run, but I agree that as they verticalize they may need to develop their own shipping strategies. That’s definitely a topic I’m interested in talking about when we visit.

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  4. Awesome job! Fanatics definitely benefits from the rise of social media. Now that athletes can communicate directly with fans, it strengthens the bond between players and fans. I’d imagine more people are going to buy a player’s jersey if they know them and their story better. This is also why Fanatics replacement program is so great!

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  5. Great post, Jake! It seems clear me to that Fanatics is becoming the standalone leader in targeted sports merchandise. With all of the different elements that they’re looking to incorporate, it’s hard not to assume that they’ll eventually be taking over the industry. Along those lines, though, I’m also curious how they plan to build the infrastructure for so many transactions: do they have that level of breadth and capital yet, or will they need to raise more funding? Similarly, have they adapted to cloud-based computing yet, or how do they plan to store all of the processed information? Great job again!

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  6. Nice post, Jake! It seems like Fanatics is dominating this sphere! I read a cool article (https://www.sportsbusinessdaily.com/Daily/Issues/2018/02/09/Olympics/Fanatics.aspx) that talked about their Olympic merchandise as well. Apparently, there has been a 60% increase in Team USA merchandise purchases leading up to the Pyeongchang Games compared to the same time period 4 years ago leading up to the Sochi Games. Hockey and curling are among the top-sellers! I wonder how much of the increase is due to improvements in targeting and advertising by Fanatics. Their brick-and-mortar stores in NYC and Pyeongchang have definitely been contributing to these new sales.

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