Fanatics Reaches Sprawling Deal to Make and Sell Soccer-Fan GearBy
Major League Soccer to get equity in $4.5 billion retailer
Mirrors similar deals Fanatics has with hockey, baseball
Fanatics Inc., the biggest seller of the stuff sports fans wear, sit on and cook with, is expanding its empire.
Starting in 2019, Fanatics will have exclusive worldwide rights to make and sell pretty much any piece of Major League Soccer fan gear, ranging from t-shirts and hoodies to hard goods like flags, magnets and foam fingers. Fanatics will also farm out manufacturing of items, like the popular soccer scarves.
The new agreement, an expansion of their previous partnership, is one of the most comprehensive yet for Fanatics, which already runs the online shops for every major U.S. league and has significant product rights in the National Basketball Association, National Football League and Major League Baseball.
MLS is also taking a small equity stake in Fanatics, which was valued at $4.5 billion in a recent investment round led by SoftBank Group. MLS joins a group of recent investors that includes the NFL, MLB and the NFL Players Association.
For soccer fans, the most noticeable change will be more kinds of products available and faster production, which is critical to taking advantage of sports’ unpredictable, ephemeral moments when they present themselves. For example, the expansion Atlanta United FC moved into the new Mercedes-Benz Stadium midway through this season, triggering a run on merchandise that caught the league, and Adidas, flat-footed.
Fanatics has run e-commerce for MLS teams since 2015. In the past three years, the league’s online sales have doubled, growth that has come alongside a handful of new franchises and league records in attendance and TV ratings.
“They’re at an interesting point in time with their growth,” said Gary Gertzog, a former NFL executive who is now president of business affairs at Fanatics. “The fact that a large percentage of their fanbase are millennials who are tech-savvy fits very well with who we are as a company.”
The deal comes on the heels of MLS signing a six-year extension with Adidas, the largest commercial partnership in league history and the shoe company’s biggest-ever investment into U.S. soccer. Adidas will provide the official products like MLS balls and jerseys.
Fanatics assumes some of the rights that Adidas used to hold, said Kathy Carter, the president of Soccer United Marketing, which oversees commercial programs for the MLS. Big sportswear companies like Adidas and Nike are less interested in these kinds of wide-ranging product rights recently, retrenching instead around uniforms and other technical, on-field gear.