Fanatics is loading up on cash with an eye toward expansion.

The digital sports platform and retail heavyweight raised around $700 million in common stock, bringing its valuation to $31 billion, sources close to the matter confirmed to Front Office Sports.

• The round was led by new Fanatics investor Clearlake Capital, the primary financial backer of Todd Boehly’s purchase of Chelsea FC.
• New investors, including LionTree LLC, made up 60% of the round. The balance was provided by previous backers including Silver Lake, Fidelity, and SoftBank.
• Fanatics raised $1.5 billion at a $27 billion valuation in March.

The business expects to bring in $8 billion next year, per sources, across separate companies including merchandise-focused Fanatics Commerce, Fanatics Collectibles — which includes $500 million acquisition Topps — and Fanatics Betting & Gaming, which will launch next year.

Although Fanatics will gain control of trading card rights for the NFL, NBA, WWE, UFC, and college athletics in the coming years, those future proceeds aren’t included in the revenue projection.

M&A Play

The company is free cash-flow positive, per sources, and intends to use the cash infusion to pursue mergers and acquisitions.

One area of focus could be its nascent sports betting and iGaming venture. In October, CEO Michael Rubin said Fanatics would launch its sportsbook in January and bring it to 15-20 states by the next NFL season.

German soccer’s governing body isn’t quite ready to sell a piece of the media rights for the country’s top professional league.

Deutsche Fussball Liga has reportedly postponed the sale of a 20% stake in the Bundesliga’s media rights until 2023 after clubs in Germany’s first- and second-tier leagues failed to reach a deal.

• The minority stake is worth $3.6 billion.
• A deal was expected to be reached in October.
• The Bundesliga’s media rights business is valued between $16 billion and $19 billion.

In August, the DFL hired Deutsche Bank AG to facilitate the sale as part of a plan to recoup pandemic losses that have plagued clubs across the world. The DFL has also considered loans and other strategic investment ideas to reinvigorate pro soccer in Germany.

Luxembourg-based CVC Capital Partners and roughly 10 other private equity firms have expressed interest in implementing a growth strategy in the DFL to improve its finances.

In March, CVC acquired a 13% stake worth $1.6 billion in the media rights of Ligue 1 — France’s premier pro soccer league.

Heavy Losses 

The Bundesliga and Bundesliga 2 have lost more than $1.1 billion in revenue since 2020. 

During the 2020-21 season, sales for the 36 clubs dropped 10.5% to nearly $4.5 billion behind reduced ticket income and other factors.

Last season, clubs were required to pay roughly $1.4 billion in “taxes and duties overall.”

A major sports beverage maker is just the latest household name to slash its workforce.

PepsiCo, parent company of Gatorade, is laying off hundreds of employees, according to the Wall Street Journal.

The cuts were weighted more toward the company’s beverage sector than its snacks unit, which already reduced its workforce via a voluntary retirement program.

• The company had roughly 309,000 global employees one year ago, including around 129,000 people in the U.S.
• PepsiCo brought in $22 billion in the fiscal quarter ending Sept. 3, beating analysts’ expectations with a 9% year-over-year increase.
• Net income rose 21.5% to $2.7 billion in the quarter.

The food and beverage giant, which also owns Frito Lay and Quaker Oats, among others, has leaned into energy drinks recently.

PepsiCo followed its $3.85 billion acquisition of Rockstar in 2020 with July’s $550 million investment in Celsius Holdings, which makes fitness-focused energy drinks. It also launched a caffeinated version of Gatorade in August in collaboration with the NFL.

Tech Trend

Headlines announcing layoffs have been a familiar sight of late due to big cutbacks in the tech sector. Amazon is shedding around 20,000 employees, while Meta let go of around 11,000.

Google is following suit with plans to lay off around 10,000 employees.