business

Fanatics Lands Global E-Commerce Rights for Olympics Merchandise

BEHROUZ MEHRI | AFP | Getty Images
  • Florida-based Fanatics will leverage merchandise tied to past and future Olympic Games in a deal that extends until the 2028 Games in Los Angeles.  

The International Olympic Committee struck its first global e-commerce deal on Thursday, partnering with Florida-based sports company Fanatics.

The revenue-sharing agreement gives Fanatics a percentage of sales from Olympics merchandise and extends to the 2028 Summer Games in Los Angeles. The agreement, however, will not include sales from the 2022 Winter Olympics in Beijing because China has a separate e-commerce deal with Alibaba.

Fanatics will make items tied to past and future Olympic Games and it has already started producing items around the 2024 Summer Games in Paris. The company also gets manufacturing rights to make and sell Olympic rings.

Financial terms of the pact weren't disclosed, and Fanatics didn't offer estimates as to how much it could profit from the IOC agreement. 

"This is an exciting launch for us, as fans from an increasing number of territories will be able to purchase official Olympic merchandising and connect with the magic of the Olympic Games ahead of each edition," IOC television and marketing executive Timo Lumme said in a statement. "We are looking forward to collaborating on this new shop with the Organising Committees of Paris 2024, Milano Cortina 2026 and LA28," he added.

Fanatics already held Team USA's e-commerce rights via a deal with the United States Olympic Committee. The IOC deal should align it with more revenue, especially around the 2028 Summer Games in the U.S.

Bronze medallist Simone Biles of the United States poses in front of the Olympic rings at the Tokyo 2020 Olympics, Women's Beam Medal Ceremony, Ariake Gymnastics Centre, Tokyo, Japan, August 3, 2021.
Mike Blake | Reuters
Bronze medallist Simone Biles of the United States poses in front of the Olympic rings at the Tokyo 2020 Olympics, Women's Beam Medal Ceremony, Ariake Gymnastics Centre, Tokyo, Japan, August 3, 2021.

It's unclear what the IOC generated from merchandise sales for the pandemic-impacted Tokyo Games this past summer.

But to paint a picture of the revenue that could be available to Fanatics, organizers projected $100 million from selling licensed products around the 2020 Olympics. For the 2016 Games in Brazil, officials initially estimated more than $400 million in sales. And the 2002 Winter Games – the last Olympic games held in the states – generated $500 million in gross retail sales for licensed products, according to the Salt Lake Organizing Committee.

Fanatics plans to leverage a heritage line that offers apparel, souvenirs, and other merchandise around previous Olympic games, including the 1996 Olympics in Atlanta. And the company's "Olympic Collection" will target younger consumers with toys and sports equipment products. The collections are available domestically, in Mexico, and in European countries, including the United Kingdom and Switzerland.

The IOC pact also helps strengthen Fanatics' economic moat. The company is valued at $18 billion after chairman Michael Rubin lured investors, including Japan-based SoftBank, to pump money into the e-commerce giant.

In 2021, Fanatics started a non-fungible token (NFT) company valued at $1.5 billion. Fanatics also said its trading card company is worth $10 billion. It took over just about all of Major League Baseball's e-commerce rights and aligned with America's team with the Dallas Cowboys' e-commerce rights.

Fanatics also has operations in the world's second-largest economy China. That division is a joint venture with investment firm Hillhouse Capital, an Asia-focused private equity fund with companies in Asia's e-commerce and retail sectors.

Fanatics estimates it will surpass $3 billion in sales this year and plans to leverage its over 80 million user base to grow future digital offerings including sports betting.

Disclosure: CNBC parent NBCUniversal owns NBC Sports and NBC Olympics. NBC Olympics is the U.S. broadcast rights holder to all Summer and Winter Games through 2032.

Copyright CNBCs - CNBC
Contact Us