What is Fanatics? At its most fundamental level it is a vertically integrated licensing business that has deals with various sports leagues and teams. It’s moat currently is exclusive agreements with these same leagues who also happen to be investors in the company.
In order to grow the moat the company has invested in categories that are complimentary to sports. collectibles and betting. Its worth noting that Fanatics has created new entities for these companies and raised capital to either buy a distressed asset (sports betting) or acquire a company (trading cards).
The trading card battle between Panini and Fanatics
Last week, sports trading card company Panini filed an antitrust lawsuit against Fanatics. One of the biggest points raised in the court documents is that the licences for sports trading cards for the MLB, NFL, and NBA was never publicly advertised to be open for tenders and Panini only learnt of these licenses when they were announced in press releases. in 2021. Panini currently own the exclusive licenses for the NBA till 2025 and for the NFL till 2026. The new deals are for long terms - two decades which will have significant financial impact for Panini and Fanatics.
Panini, the collectibles company that produces NFL and NBA cards, is suing Fanatics over its dramatic takeover of the industry
This is not the first time that Panini and Fanatics have been in the courts, was in May 2023, as part of a lawsuit filed by Panini against Fanatics in a Texas district court, the sides agreed to a temporary injunction that restricts Fanatics’ ability to recruit Panini employees and enjoins Fanatics’ ability to use confidential information from employees who used to work at Panini.
The apparel battle
It is worth noting that Fanatics apparel business also have class action suits against it. Fanatics and the sports leagues have made selling league branded apparel on third-party marketplaces such as Amazon, Walmart and others, impossible.
In 2021, a class action lawsuit was filled by a consumer against the NFL, its teams and Fanatics related to team merchandise being a monopoly. On March 30, 2022 this case was voluntarily dismissed by the plaintiff.
in 2022, a Nebraska-based online merchant filed a class action lawsuit against Major League Baseball, its 30 teams and Fanatics.