New York, NY. – December 7th. Portrait for a profile on Fanatics founder & CEO Michael Rubin at his office in downtown NYC.
The Washington Post | Getty Images
Fanatics is moving into livestreamed shopping around collectibles and trading cards, hiring a former Snap spirit Alphabet executive to launch its new business later this year.
Nick Bell, who previously led teams responsible for Google Search experience and was Snap’s global head of content and partnerships, will serve as the CEO of Fanatics Live, a new business division for the sports platform company.
Fanatics Live, which will have a standalone app and a coinciding website, plans to launch in the second half of 2023. The aim is to create a digital customer shopping experience where you can buy trading cards and other collectibles via curated and personality-driven content and entertainment. Fanatics will receive 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 big opportunity to really grow the hobby by bringing in people who wouldn’t necessarily classify themselves as a collector today and open them up to this hobby by the way of entertainment and a community where they can hang around like-minded people .”
Nick Bell, then of Snap speaks onstage last January in Pasadena, California.
Frederick M. Brown | Getty Images
Bell said one area of early focus will be around “breaking,” a form of social trading card buying that is growing in popularity. Similar to a blind raffle, a set number of individuals purchase an entry from a seller — called a “spot” — and the seller then opens an entire case of trading cards live online and allocates each of them.
“This is not just about taking a product and selling it; it’s about creating this really entertaining format and experience,” Bell said.
Livestream shopping has been growing in popularity in the US, aided by the pandemic-fueled rise in online commerce as well as brands and retailers looking to connect with shoppers at home on their phones and computers. Nordstrom, Petcoduck Macy’s-owned Bloomingdale’s are just some of the retailers that have experimented with livestreamed sales.
Walmart, Amazon, eBay, TikTok already in the livestream e-commerce market
Walmart hosts a livestreamed shopping experience called Walmart Live, where recent events centered on Valentine’s Day picks, New Years resolutions and fitness-related items. Amazon has its own live shoppable videos, where individual creators can host videos promoting products. Ebay has its Live platform where sellers can livestream auctions and promote other online sales.
TikTok made its shopping feature available to select US businesses this fall after previously partnering with Shopify to allow users to shop in-app. YouTube partnered with Shopify in July to allow video creators to feature products across their channels and content. Meta shut down the live shopping feature on Facebook in October, but still has a similar functionality on Instagram.
In the US, the livestreaming e-commerce market is expected to grow to an estimated $32 billion this year, according to consumer market research group Coresight Research. That is up from $6 billion in 2020.
But there have been some hiccups as the modern version of QVC has not taken off as much as it has in Asia. Douyin, the Chinese sister app to TikTok, reported that it generated $119 billion worth of product sales via live broadcasts in 2021, and sales have more than tripled year-over-year.
Only 31% of US adults have even heard of live shopping, with just 22% saying they’ve participated in a live shopping event, according to a December poll by Morning Consult.
Bell said that while livestreaming and social commerce “hasn’t taken off yet” in the US, “it’s just inevitable that it is going to happen.”
“There’s a lot of development to do around the format – shopping should become a byproduct of entertainment rather than how I think a lot of folks have been thinking about it, which is more akin to how we would think about QVC where it’s just about the shopping,” Bell said. “I think we’re moving to a slightly different world where it’s actually about the content and the community, and the shopping is the byproduct.”
Leveraging Topps brand in latest sports venture
For Fanatics, there is a big opportunity to establish itself as the hub for the trading card industry that 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 it saw trading card sales increase 142% in 2020, acquired trading card marketplace TCGPlayer for $295 million in August. Goldin, which was acquired by an investment group led by hedge fund billionaire Steve Cohen in July 2021, launched an online card marketplace last month.
But Fanatic’s effort will be aided by its acquisition of Topps trading cards for roughly $500 million last January. Topps holds MLB’s trading cards rights, as well as rights for MLS, UEFA, Bundesliga and Formula 1. Fanatics also previously struck deals to exclusively produce NFL and NBA cards starting in 2026.
“This hobby has so many people in the middle of it and perfectly set up to have an integrated direct-to-consumer experience,” Fanatics founder and CEO Michael Rubin said at the time of the Topps acquisition.
Bell said the collection of card rights and the connection to Topps is a “huge strategic advantage.” While Fanatics Live could move into other forms of entertainment and collectibles over time, it will solely focus on trading cards initially.
The deeper push into collectibles is the latest effort from Fanatics to become a one-stop shop for sports fans. Initially started as an e-commerce company selling sports merchandise, the company has evolved to hold the apparel rights to nearly every sports property with a database of more than 94 million fans.
The company is also circling the sports betting market, looking to take on operators like Flutter-owned FanDuel, DraftKings, Caesars and BetMGM, which is co-owned by MGM Resorts
Fanatics opened its first sportsbook last month at FedEx Field, the home of the NFL’s Washington Commanders, and was in discussions to acquire BetParx sportsbook, according to previous CNBC reporting.
Last year, Rubin sold his 10% stake in Harris Blitzer Sports Entertainment, the owner of the Philadelphia 76ers and New Jersey Devils, allowing Fanatics to enter the gambling space. NBA rules prohibit team owners from operating a gambling platform.
Fanatics raised $700 million in December to bring its valuation to $31 billion, capital that it planned to use on potential merger and acquisition opportunities across its collectibles, betting and gaming businesses, according to CNBC.
The company estimates its revenue for Fanatics, including its Lids segment, will be approximately $8 billion in 2023.
Fanatics is a three-time CNBC Disruptor 50 company, and ranked No. 21 in 2022.
CNBC is now accepting nominations for the 2023 Disruptor 50 list – our 11th annual look at the most innovative venture-backed companies. Learn more about eligibility and how to submit an application by Friday, Feb. 17.