• Loading stock data...
Sunday, December 8, 2024
Tune in on Dec. 11 at 1:05 p.m. ET for our last Future of Sports virtual summit of the year – Future of Sports: Marketing! Register Now

Fanatics Denies Reports of Revenue Decline, Rubin Sell-Off

  • A recent story alleges that Fanatics’ owner wants to sell stock after an IPO never came to fruition for 2024.
  • Fanatics vehemently denies the reporting. 
Kyle Terada-USA TODAY Sports

On Monday, a panel of judges in Boston made it clear they are likely to side with DraftKings in an ongoing legal battle between the gambling company and Fanatics.

It would turn out to be just the beginning of a brutal week for Fanatics and its billionaire founder and CEO Michael Rubin.

Earlier this year, Rubin poached Michael Hermalyn, a former senior vice president, from DraftKings; the gambling company sued in February, saying that Hermalyn had a noncompete clause in his contract and accusing him of a “secret plan” to steal business secrets from DraftKings and use them at Fanatics. (Editor’s note: Separate from his role at Fanatics, Hermalyn is an “advisor” at SC Holdings, a company that is an investor in Front Office Sports.)

DraftKings won a temporary injunction against Hermalyn this spring that barred him from doing much of his current job at Fanatics. Hermalyn is appealing the injunction, which currently runs through February 2025. At a hearing for his appeal Monday, at the federal 1st U.S. Circuit Court of Appeals in Boston, two of the three judges appeared skeptical of Hermalyn’s case, pressing his lawyer on why his move to California would void his noncompete agreed to with DraftKings in Boston.

Hermalyn relocated to California for his new job with Fanatics, and his lawyers have leaned on the argument that noncompetes are illegal in the state. (Fanatics and Hermalyn are also suing DraftKings in California, where a court recently said they were “likely to prevail on the merits of this case.” A representative for Hermalyn told FOS that “California has long upheld the right of workers to pursue their livelihoods—and recognizes that non-compete restrictions are unfair restraints of trade… Put simply, he wants to work.  And he is free to do so in California.”)

Separately, two similar newsletters, both targeted at wealthy fans of media gossip, ran aggressive stories about Rubin this week. Air Mail and Puck ran lengthy investigative stories about recent legal and financial woes at Fanatics.

The Air Mail story contains the most damning reporting, which spokespeople for Fanatics vigorously contested to Front Office Sports and other outlets. According to Air Mail:

  • Rubin “could be looking to sell up to $1 billion of his stake” in the company.
  • The company’s revenue is set to decline by 14% in 2024.
  • There’s “growing concern among the credit-ratings agencies that Fanatics is facing rougher seas” ahead.

Fanatics denies the claims about Rubin selling and the revenue dipping. (The credit agencies’ assessments of the company are a matter of public record.) Fanatics is a privately held company and does not generally open its books; according to Air Mail, Rubin’s interest in selling his private shares stems from the company’s failure to launch an IPO this year.

In an interview with FOS, a spokesperson for the company said that the premise of the Air Mail story was false, that Rubin was not looking to sell his shares, and that he has had “no discussions” about doing so. While Air Mail, citing a source, has 2024 revenue declining by $1 billion this year, Fanatics says the opposite: That revenue is up 17% to date this year, which would be $1 billion in new revenue in 2025. “Margins are meaningfully up this year,” the spokesperson says.

These denials also appeared in the Air Mail story, which quoted the spokesperson saying of an IPO, “Right now, we’re heads-down on building our business.” 

A company source tells FOS that while an IPO is “the most likely long-term outcome” for the company, it has never made it to the stage of interviewing bankers for an offering.

Linkedin
Whatsapp
Copy Link
Link Copied
Link Copied

What to Read

breaking

Juan Soto Agrees to Groundbreaking $765M Mets Deal

Unlike Ohtani’s Dodgers deal, the Soto contract reportedly contains no deferred money.

ESPN, ABC To Simulcast First Non-NBC Notre Dame Home Game Since 1990

The Fighting Irish will play the first game of the College Football Playoff.

Big Ten Tops SEC With Four College Football Playoff Bids

The SEC ended up with three CFP teams after Alabama was left out.

TNT Will Broadcast Clemson-Texas, SMU–Penn St. CFP Games

The network will broadcast Clemson at Texas and SMU at Penn State.

Featured Today

Nov 2, 2024; Ann Arbor, Michigan, USA; Michigan Wolverines cheerleader runs with a flag before the game against the Oregon Ducks at Michigan Stadium.
opinion

College Football’s Billionaire Backer Era Begins

Is this the new normal in CFB recruiting?
LA Galaxy forward Dejan Joveljic (9) celebrates with midfielder Riqui Puig (10) after scoring a goal against Seattle Sounders FC in the second half in the 2024 MLS Cup Western Conference Final match at Dignity Health Sports Park
December 6, 2024

With or Without Messi, Major League Soccer Is Barreling Into the Future

After the Cup final, the league looks to accelerate its growth.
Dec 18, 2022; Lusail, Qatar; FIFA president Gianni Infantino claps during the awards ceremony after the 2022 World Cup final between Argentina and France at Lusail Stadium.
December 2, 2024

FIFA Wants More Matches. Resistance Is Growing Inside the Global Soccer World

Resentment and frustration over expanded schedules is nearing a breaking point.
November 30, 2024

U.S. Investors Are Gunning for England’s Small Soccer Clubs

Is another Hollywood-like success story possible among the U.K.’s smallest clubs?
A line of Black Friday shoppers streams into the Nike Store at Tanger Outlets in Pooler.

Sportswear Giants Are Ready for Trump’s Tariffs This Time Around

Retailers cut their exposure to China when Trump imposed tariffs in 2018.
Nov 5, 2023; New York, NY, USA; Hellen Obiri of Kenya celebrates after finishing first place in the NYC Marathon.
November 12, 2024

On Brand Posts Record Sales, Says It’s No Longer ‘Just a Running..

The Swiss company credited its full-price strategy for its stellar quarter.
Classic Football Shirts New York Pop-Up
November 18, 2024

Vintage Soccer Jerseys Have Found a Sweet Spot in the Lucrative U.S...

The money-making shirts are at the prime intersection of memorabilia and fashion.
Sponsored

How UBS Crafts Impactful Partnerships Across Sports, Arts, and Culture

As UBS continues to expand its impressive array of sports and entertainment partnerships, the company solidifies its position as a leader in wealth management.
April 13, 2019; Oakland, CA, USA; Detail view of Anta shoes worn by Golden State Warriors guard Klay Thompson (11) during the second quarter in game one of the first round of the 2019 NBA Playoffs against the LA Clippers at Oracle Arena.
November 8, 2024

Nike and Adidas Are Losing Sportswear Share in China

Chinese brands like Anta and Li-Ning are taking Nike’s share of the market.
November 7, 2024

Under Armour Turnaround Underway, Raises Profit Guidance

CEO and founder Kevin Plank returned to lead the company in April.
Brooks Running posted positive numbers in Q1 of 2023.
November 2, 2024

Brooks Running Is Having Its Best Year Ever

Brooks opened its first store in Shanghai as it pushes into China.
October 30, 2024

Lululemon-Fanatics Collab With NHL Sees ‘Explosive’ First-Day Sales

The premium collection made up 80% of all NHL merch sales.