$18 billion Fanatics prepares for IPO — here’s what’s next for the

Sports merchandising company Fanatics shocked the sports world last month after securing trading card rights for Major League Baseball, the National Football league and the National Basketball Association.

Most notably, Fanatics’ deal with MLB terminated a decades-long partnership with Topps and possibly caused the end of Topps’ plans to go public through a SPAC with Mudrick Capital Acquisition Corp. II. It also sent Topps owner and former Disney CEO Michael Eisner back to the drawing board to contemplate the next move — if there is one. Panini, which had the NFL trading card license since 2016 and NBA’s since 2009, will also lose rights to Fanatics.

The string of deals highlights how Fanatics, under CEO Michael Rubin, plans to expand beyond the sportswear and into collectibles, sports betting and even broadcasting sports games. It’s already attracted big-name investors like Jay-Z to go along with its $18 billion private valuation ahead of an anticipated IPO.

Here’s how Fanatics landed the partnerships and what it means for the company moving forward.

Rubin’s move ends historic sports partnerships, which the NBA already proved aren’t carved in stone. Last May, the NBA dropped basketball maker Spalding, a partner for more than 30 years, and linked with Wilson to manufacture its basketballs. MLB made the next move when it aligned with Fanatics for trading cards.

Sports leagues like Fanatics’ moat around its products, and the company is already aligned with most leagues and teams to manufacture soft and hardgoods merchandise, including sports jerseys. The pandemic forced all leagues to re-examine business deals to maximize profits after taking substantial losses. Fanatics also had to rethink its business as live sporting events were suspended early in the pandemic.

According to people familiar with Fanatics’ plans, the company contemplated expanding last summer to add more pillars to its operation. Fanatics already dominates vertical and e-commerce in sports, mainly with all of its MLB rights. But it also saw an opportunity in the trading card market.

Fanatics declined to comment on this story.

The sports trading card business is projected to reach $98.7 billion by 2027, according to Verified Market Research. In 2021, the sector has been especially active, with Babe Ruth’s classic baseball card setting a record. Even Luka Doncic’s rookie card set an auction record.

Entering trading cards also aligns with Fanatics’ plans to build its name in the NFT collectibles sector through Candy Digital. To secure the new deals, Fanatics provided equity to leagues and player unions that is guaranteed to bring at least $1 billion in revenue…