New York, New York. – December 7. Profile portrait of Fanatics founder and CEO Michael Rubin in his office in downtown New York.
The Washington Post | Getty Images
Fanatics switch to buying collectibles and trading cards live, hiring the former Tie up and Alphabet manager to launch his new business later this year.
Nick Bell, who previously led search teams at Google and was Snap’s global head of content and partnerships, will serve as CEO of Fanatics Live, the company’s new sports platform business unit.
Fanatics Live, which will have a standalone app and associated website, is slated to launch in the second half of 2023. The goal is to create a digital shopping experience for customers where you can buy trading cards and other collectibles through curated and personalized content and entertainment. Fanatics will earn a percentage of each transaction.
“All collectors are fans, but not all fans are collectors,” said Bell, who will be based in Los Angeles and report to Fanatics Collectibles CEO Mike Mahan. “We have a great opportunity to really grow this hobby by bringing in people who don’t necessarily think of themselves as collectors today and exposing them to the hobby through entertainment and a community where they can connect with like-minded people. .”
Nick Bell, then with Snap, performs on stage last January in Pasadena, California.
Frederick M. Brown | Getty Images
Bell said one area of focus will be around “hacking,” a form of buying social cards that is becoming increasingly popular. Similar to a blind raffle, a set number of people buy a record from the seller — called a “spot” — and the seller then opens the entire box of trading cards online and deals out each one.
“It’s not just about taking a product and selling it; it’s about creating a really engaging format and experience,” Bell said.
Online shopping is growing in popularity in the U.S., helped by the rise of online shopping fueled by the pandemic and by brands and retailers looking to connect with shoppers at home via their phones and computers. Nordstrom, Petkoand Macy’sOwned by Bloomingdale’s, they are just a few of the retailers that have experimented with live sales.
Walmart, Amazon, eBay, TikTok are already in the live e-commerce market
Walmart is hosting a live shopping event called Walmart Live, focusing on recent events including Valentine’s Day picks, New Year’s resolutions and fitness-related items. Amazon has my own live videos where individual creators can post videos promoting products. Ebay has a live platform where sellers can broadcast live auctions and promote other online sales.
This fall, TikTok made its shopping feature available to select US companies after previously partnering with Shopify to allow users to make in-app purchases. YouTube partnered with Shopify in July to allow video creators to feature products on their channels and content. Meta shut down Live Shopping on Facebook in October, but still has similar functionality on Instagram.
The U.S. live e-commerce market is expected to grow to $32 billion this year, according to consumer market research group Coresight Research. That’s up from $6 billion in 2020.
But there were some drawbacks as the modern version of QVC did not gain as much popularity as it did in Asia. Douyin, a subsidiary of TikTok’s Chinese app, said it generated $119 billion in live streaming product sales in 2021, with sales more than tripling from last year.
According to a December survey conducted by Morning Consult, only 31% of US adults have even heard of live shopping, and only 22% said they have participated in live shopping.
Bell said that while live streaming and social commerce “have yet to take off” in the US, “it’s inevitable that it will.”
“There’s a lot that needs to be developed around this format – shopping has to become a byproduct of entertainment, not the way I think a lot of people thought of it, which is more like how we would think of QVC, where it’s just about shopping ” Bell said. “I think we’re moving into a little bit of a different world where it’s about content and community, and shopping is a byproduct.”
Using the Topps brand in the latest sports venture
There’s a big opportunity for Fanatics to establish itself as the center of the trading card industry, which is projected to reach $98.7 billion by 2027, according to Verified Market Research
Other companies are also looking to do the same, as well as develop an online marketplace around trading cards. Ebay, which said trading card sales are up 142% in 2020, acquired trading card marketplace TCGPlayer for $295 million in August. Goldin, which was acquired in July 2021 by an investment group led by hedge fund billionaire Steve Cohen, launched an online card marketplace last month.
But Fanatics’ efforts will be aided by the roughly $500 million acquisition of Topps trading cards last January. Topps owns the rights to MLB trading cards, as well as the rights to MLS, UEFA, Bundesliga and Formula 1. Fanatics has also previously inked deals to exclusively produce NFL and NBA cards starting in 2026.
“There are so many people involved in this hobby, and they are perfectly positioned to have an integrated direct-to-consumer connection,” Fanatics founder and CEO Michael Rubin said at the time of the Topps acquisition.
Bell said the collection of card rights and the association with Topps is a “huge strategic advantage.” While Fanatics Live may eventually expand into other types of entertainment and collectibles, it will initially focus solely on trading cards.
Pushing deeper into collectibles is Fanatics’ latest effort to become a one-stop shop for sports fans. Originally started as an e-commerce company selling sporting goods, the company has evolved into an apparel rights holder for virtually every sports property with a database of over 94 million fans.
The company is also active in the sports betting market, seeking to compete with operators such as FanDuel, DraftKings, Caesars and Flutter-owned BetMGM, which is co-owned by MGM Resorts.
Fanatics opened its first sportsbook last month at FedEx Field, home of the NFL’s Washington Commanders, and has been in discussions to acquire sportsbook BetParx, according to a previous report by CNBC.
Last year, Rubin sold his 10% stake in Harris Blitzer Sports Entertainment, owner of the Philadelphia 76ers and New Jersey Devils, allowing Fanatics to enter gambling. NBA rules prohibit team owners from operating a gambling platform.
According to CNBC, Fanatics raised $700 million in December to bring its valuation to $31 billion. That’s capital it planned to use for potential M&A opportunities in its collectibles, betting and gaming businesses.
The company estimates that its revenue from Fanatics, including the Lids segment, will be about $8 billion in 2023.
Fanatics has been named to CNBC’s Disruptor 50 three times and was ranked #21 in 2022.
CNBC is now accepting nominations for the 2023 Disruptor 50 list, our 11th annual look at the most innovative venture capital companies. Find out more about eligibility and how to apply by Friday 17 February.