Fanatics owns the licensed product rights for more than 300 sports teams and leagues, including the French club Paris Saint-Germain, in which the global icon Neymar plays the leading role.
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Michael Rubin has entered the US licensed sportswear market through its e-commerce company Fanatics, which handles online merchandise sales for the NFL, NBA, MLB, Nascar and more than 300 other leagues and teams. Next on the billionaire’s agenda: China.
Fanatics today announced plans for a 50:50 joint venture with Hillhouse Capital to open the global sports licensing market in China to Fanatics’ global partners. Hillhouse is an Asia-focused private equity firm with a deep investment background in online retailers including Chinese e-commerce giant JD.com and technology conglomerate Tencent. Another major investment is Topsports, which operates more than 20,000 Nike and Adidas stores in China.
“China has become an increasingly important market for sports clubs and leagues around the world. We believe this joint venture will offer our hundreds of global partners an incredible opportunity to reach millions of people in China’s traditionally underserved market,” said Fanatics General manager Zohar Ravid told Forbes this week.
The idea is to combine Fanatics’ sports experience and vertical trading model with Hillhouse’s operational expertise in China. The day-to-day business will have a local guide in Shanghai and produce products that are unique to Chinese fans. It is the eleventh country for fanatics including Germany, Japan, India, Spain and the UK. The company is expected to have sales of more than $ 3 billion in 2021.
Football is one of the main licensed sports categories in China, and Fanatics has exclusive relationships with a handful of the world’s biggest clubs, including Bayern Munich, Chelsea, Manchester United and Paris-Saint Germain.
Investors are demanding a piece of Fanatics that is part of Rubin’s holding, Kynetic, along with Rue Gilt Groupe. Fanatics graduated from a Series E invested $ 350 million Round in August that valued the company at $ 6.2 billion. The company originally wanted to raise $ 250 million, but the deal was oversubscribed, resulting in a $ 350 million increase. The money should acquire the rights to more sporting real estate and finance M&A activities.
Fanatics was previously valued at $ 4.5 billion in 2017 when SoftBank led a $ 1 billion investment. The NFL, MLB, NHL, and MLS were also major investors in this round, aligning their interests with those of their partner. The company is not expected to raise additional funds with its next capitalization going public. The company has not announced a public offering schedule.