Sunday, June 26, 2022

Fanatics CEO Michael Rubin selling stake in Philadelphia 76ers and New Jersey Devils

Date:

  • Rubin is HBSE’s third largest shareholder after increasing stake in 2020
  • Fanatics’ new business ventures such as sports betting posed risk of conflict

Michael Rubin, the chief executive of digital sports platform Fanatics, is selling his minority stake in Harris Blitzer Sports & Entertainment (HBSE), owner of the National Basketball Association’s (NBA) Philadelphia 76ers and the National Hockey League’s (NHL) New Jersey Devils.

Rubin, whose net worth is estimated at US$8 billion by Forbes, holds a reported ten per cent stake in HBSE. The 49-year-old last upped his holding in the group in September 2020, becoming HBSE’s third largest shareholder behind managing partners Josh Harris and David Blitzer.

HBSE was valued in excess of US$3 billion after selling a stake reportedly between five per cent and ten per cent to private equity firm Arctos Sports Partners this month.

Fanatics’ valuation hit US$27 billion in March after it raised an additional US$1.5 billion to fuel ongoing expansion into areas beyond its core licensed sports merchandise business. Since March 2021, the company has established a trading card business and launched its Candy Digital non-fungible token (NFT) venture.

Major acquisitions for Fanatics this year have included lifestyle brand Mitchell & Ness from Juggernaut Capital Partners and trading card giant Topps for US$500 million. Former Fan Duel chief executive Matt King has also been brought in to lead Fanatics’ sports betting and iGaming division.

The march into betting, as well as negotiating individual partnerships with athletes, has meant Rubin will part with his HBSE stake due to the various conflicts with collective bargaining rules.

‘As our Fanatics business has grown, so too have the obstacles I have to navigate to ensure our new business don’t conflict with my responsibilities as part-owner of the Sixers,’ Rubin said in a statement.

‘With the launch of our trading cards and collectibles business earlier this year – which will have individual contracts with thousands of athletes globally – and a soon-to-launch sports betting operation, these new businesses will directly conflict with the ownership rules of sports leagues .

‘Given these realities, I will sadly be selling my stake in the Sixers and shifting from part-owner back to life-long fan.’

SportsPro says…

Fanatics’ continued expansion means there is a degree of inevitably to Rubin’s decision to part with his HBSE stake. He is unlikely to be short of suitors, given the continued rise in NBA and NHL franchise values.

As for Fanatics, it is going all in on betting. speaking to Yahoo Finance in February, Rubin described sports betting and iGaming as a “very significant business long-term”. The total market is forecast to reach more than US$100 billion by the end of 2025, according to a study by Technavio.

Fanatics’ wider business means it is in a good position to reach potential bettors, but it will be a costly process. Yahoo Finance reports it typically takes about three years for a company to turn a profit in a given state. Rival betting operators are also posting large losses. DraftKings, for example, announced a loss of US$468 million for the first quarter of 2022.



Source

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Share post:

Subscribe

spot_imgspot_img

Popular

More like this
Related

Loco launches ‘Legends’, India’s first NFT platform for esports

Game streaming and e-sports platform Loco is set to...

Sporting Lisbon chief responds to Cristiano Ronaldo transfer links – “He can decide”

Cristiano Ronaldo has been linked with a return home...

Mumbai All-out for 269, Set 108-run Taregt for MP

read more and 45 respectively. Earlier, Shaw and makeshift opener...