Here's How Fanatics Has Been Thriving During the COVID-19 Crisis
It's probably fair to say that the sporting world has had a rough time of it during the global COVID-19 pandemic.
Of course, the same could be said about many industries. But, with crowds playing such an integral role in the sporting experience, when crowds became inherently dangerous, the business of sport found itself without its main source of income and motivation. Watching football games and other sporting events with empty stands was a surreal experience for many and the photos of spectators which some arenas tried to replace the usual crowds with was hardly an adequate substitute.
However, the business of sporting merchandise stops for no virus - no matter how virulent - and ecommerce sportswear, equipment, and merch superstar Fanatics hasn't just been surviving but thriving during the coronavirus crisis.
Fanatics
To demonstrate its success during the pandemic, the Jacksonville, Florida-based ecommerce retailer has recently raised its valuation to a staggering $18 billion, after raising $325 million from a suite of investors including Major League Baseball, SoftBank, and hip-hop legend Jay-Z.
Backing these ambitious numbers up are reports which suggest that Fanatics is on track to generate $3.4 billion in revenue by the close of 2021 - not bad during a global pandemic where many sports events have been cancelled or held without an audience.
It seems that even though sport fans haven't been able to go and see their favorite teams compete, they still want to show their support through merchandise. Exercise equipment and sportswear sales have also seen increases in demand during the pandemic as people seek ways to stay fit and healthy during lockdown restrictions.
"Merchandising revenues have become, and continue to be, an increasingly important revenue stream," said General Manager for Fanatics' international business, Zohar Ravid. "Particularly during the pandemic as grounds remain closed, media dollars are reduced, and sponsors are struggling to make their own P&Ls work. A company like Fanatics, being able to truly maximize this revenue stream, provides clubs with some guaranteed money, reduces their risk and working capital needs, and ensures the fans are being served in the best way possible."
New Deals and New Markets
Fanatics isn't prepared to simply sit on its laurels and enjoy the success it has had so far. It's constantly moving forward to establish new partnerships and expand into new and lucrative markets.
Online gaming, sport betting, and media are just three of the areas Fanatics is looking to expand into. Online gaming is a particularly relevant market for a sports brand such as Fanatics, even though on the surface it may seem like an odd fit - active sports compared to largely sedentary gaming. The audience for global competitive eSports sits at 474 million in 2021 and is predicted to rise to over 577 million over the next three years. The competitive nature of both traditional and eSports creates a fantastic link that Fanatics can use to break into this lucrative market.
Gambling and sports have gone hand in hand for centuries and many fans like to increase the stakes of a particular event by putting a little money down on their chosen competitor or team. Sports betting generates $2.5 billion in revenue in the US alone - a figure which is set to rise to $8 billion by 2025.
Fanatics has also extended its deal to provide merchandise ecommerce and manufacturing to the world of Formula 1 racing. Since partnering with F1 back in 2017, Fanatics has helped grow merchandising sales by around 200% - more than 40% globally in 2020 alone - and it is keen to continue this trend as we move further out of COVID-19 restrictions.
"We are pleased to extend our ecommerce and licensing partnership with Fanatics on the back of an exceptional 2020 performance, which follows the remarkable growth we have seen over the last few years," said Director of Commercial Partnerships at Formula 1, Ben Pincus. "Our ambition is to serve all our fans no matter where in the world they are located, and our focus in the years to come will be to access new markets and grow strategic territories like China."
"We have worked in partnership with Formula 1 for a number of years now and grown its global merchandise business significantly in that time," added Ravid.
Final Thoughts
It's great to see crowds starting to make their way back into global sporting events after such a long period of desolate stadiums. Likewise, it's encouraging to know brands which act in a periphery capacity to these events, such as Fanatics, have managed to thrive in such testing times, and are continuing to evolve into the future.
You can hear Fanatics' Director of Global Affiliate Marketing, Wade Tonkin speak at eTail Palm Springs 2022, taking place February 28 to March 02 in Palm Springs, CA.
Download the agenda today for more information and insights.