NFL Biggest Investor in Latest Fanatics Funding Round, MLB Involved, Too

Posted on: April 7, 2022, 12:04h. 

Last updated on: April 7, 2022, 01:28h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Fanatics’ private market valuation soared to $27 billion last month. That’s following a $1.5 billion funding round in which the NFL was the biggest investor.

Fanatics valuation
Fanatics founder Michael Rubin at an event in 2021. The NFL was the biggest investor in the company’s latest funding round. (Image: Getty Images)

When news of the $27 billion valuation for the privately held company emerged in early March, existing investors and BlackRock, Fidelity, and MSD Partners — an investment vehicle controlled by Dell founder Michael Dell — were revealed among the participants.

New reports indicate the NFL contributed $320 million of that $1.5 billion — the largest chunk of any investor in that capital-raising round. Other investors in the latest Fanatics fundraising effort included the NFL Players Association (NFLPA), Major League Baseball (MLB) and its players’ union, and the NHL.

Brooklyn Nets owner Joseph Tsai and the Qatar Investment Authority were also involved. Fanatics founder Michael Rubin is the co-owner of the NBA’s Philadelphia 76ers and the NHL’s New Jersey Devils.

NFL Continuing Investment Spree

The NFL’s stake in Fanatics continues a trend of the dominant US professional sports league making investments in young companies, including some with ties to the gaming industry.

On Wednesday, it was revealed that following another round of vesting of equity warrants, the league owns 7.7% of sports betting data provider Genius Sports (NYSE:GENI). In addition to Fanatics and Genius, the NFL is an investor in Skillz Inc. (NYSE:SKLZ) and On Location Experiences.

For its part, the NFLPA isn’t a stranger to investing, either. In October, the union took a stake in daily fantasy sports (DFS) operator Monkey Knife Fight (MKF). That proved to be a shrewd move because Bally’s (NYSE:BALY) acquired MKF just three months later. The NFLPA and Major League Baseball Players Association (MLBPA) and other investors formed OneTeam Partners, which identifies investment opportunities for the unions.

The NFL and MLB are long-standing Fanatics investors, as those leagues initially invested in the firm in 2017. Today, leagues, players’ unions, and team owners control about 10% of Rubin’s company, according to CNBC.

Fanatics Gaming, IPO Speculation

The traditional avenue for investors to monetize stakes in private companies is for the firm in question to commence an initial public offering (IPO). While there’s ample speculation about Fanatics and an IPO by the company is highly anticipated, Rubin hasn’t publicly commented on the matter.

The company also has gaming ambitions, which are also proving slow-moving. Last year, the firm filed several patent applications with the US Patent and Trademark Office (USPTO) for a branded casino, mobile betting app, and sportsbook. Before that, the Florida-based company announced the hiring of former FanDuel CEO Matt King.

Florida-based Fanatics has also been tied to acquisition rumors involving multiple sports betting operators. But the company has yet to strike a deal.