Fanatics CEO Michael Rubin on two sports businesses he will never enter

Since founding Fanatics in 2011, Michael Rubin has built the company from a small online retailer of sports merchandise and apparel into a global sports powerhouse.

Not only is Fanatics the biggest player in sports apparel, dealing with almost every major league in the world, but it also now has a large history in the collection, sports betting, and prediction markets. The company also launched its own branded credit card this year.

A broad spectrum of sports and sports fans came alive this week at the annual Fanatics Fest, the company’s attempt to create a Comic Con-style event for sports fans now in its third year.

Rubin, speaking with CNBC’s Andrew Ross Sorkin at the CNBC Sport x Boardroom Game Plan conference Thursday, held next to Fanatics Fest in New York City, said the company expects more than 200,000 people to attend the event over four days.

That’s on top of the more than 150 million fans who are now Fanatics customers everywhere in all of its various sports-focused businesses, whether that’s from jersey purchases, trading cards, or betting.

Rubin, in an appearance on CNBC in May, said the company will reach $14 billion in revenue this year. By comparison, the company had an estimated $8 billion in revenue by 2024, according to a previous CNBC report.

“We believe we probably have a huge opportunity in sports because it’s not like we’re in the same business,” Rubin told Sorkin at Game Plan. “I think of us as a platform that gives digital sports fans everything they want.”

Fanatics, with its three main business interests of retail, collectibles, and betting and gaming, “should create the most important company in sports,” Rubin said. “We think that would be the most important company in sports.”

The company’s last round of public financing was in December 2022, when it raised $700 million, valuing it at $31 billion. The company, which has made the CNBC Disruptor 50 list three times, has been rumored to be interested in going public in recent years, but Rubin told CNBC last year that “There is no rush to become a public company.”

But even with all that success, Rubin told Sorkin at Game Plan, “We think there are several opportunities to create new businesses that we’re not in, to leverage the relationships we have with customers, with sports properties, with athletes.”

“We think there’s a lot of growth for us,” Rubin said. “I’d say ten years from now, I bet you we’ll have a few businesses that are equally important to the three we have today.”

Rubin declined to say what those businesses might be. However, you mentioned what the Fanatics are not after: tickets and live sports broadcasts.

Ticketing is “a tough business … a complicated business; lots of competitors,” Rubin said. “The content providers, the bands and the artists, keep all the money, which is the way it should be. So that’s a business we’ll never get into.”

When it comes to being a sports broadcaster, Rubin said, “There are a lot of big companies … that’s a business where we want to pop the popcorn and watch.”

“But there are other businesses that I think we can make better for the fan,” he said. “We can do something different and better for them than what is currently being done.”

That strategy is now fueled by two recent situations in which Rubin said he and the Fanatics “got hit in the face by a few things.”

The first was when the Fanatics announced that they would be making NHL ice jerseys starting in the 2024-2025 season. “There were literally 10,000 hockey fans [saying] we don’t want you to take the hockey jersey,” he said.

The Fanatics faced an even bigger jersey-centric controversy in 2024 when they began producing a new MLB jersey template in partnership with Nike. Following significant criticism of the quality and appearance compared to previous jerseys due to Nike’s redesign, the jersey was overhauled.

“That was the best thing that ever happened to me because we got our team together and said, ‘Wait a minute, what are we going to do with this?'” Rubin said. “We never had a brand purpose, and I always thought it was strategic bullsh-t. [But] that was our time [to say] what is the purpose of our product. We said it is to tirelessly improve the fan experience.”

Rubin said, “Five years ago, we took money. Now, we won’t take money if it doesn’t continuously enhance the fan experience.”

“You ask me why I don’t go into the ticket business. No one likes the ticket business, even if you talk about how you can make billions of dollars a year,” he said. “I don’t want to be in that business; I want to be in a business where we will celebrate being loved like we do here.”

Rubin said that moment was “the greatest thing that ever happened because it really made us think.”

“We don’t want to be great; we want to be loved,” Rubin said. “The way we’re loved is by relentlessly improving the fan experience.”