Fanatics CEO sells ownership stake in NBA and NHL teams to fully enter sports betting and NFTs markets

Fanatics CEO Michael Rubin said Wednesday he is selling his 10% stake in Harris Blitzer Sports and Entertainment (HBSE), which owns the NBA's Philadelphia 76ers and the NHL's New Jersey Devils, citing a conflict of interest with Fanatics’ collectibles and planned sports betting operations.

His move paves the way for Fanatics to enter the sports wagering and NFTs business landscape. Under league ownership rules, Rubin couldn’t own part of a team and operate a gambling platform at the same time.

“As our Fanatics business has grown, so too have the obstacles I have to navigate to ensure our new business don’t conflict with my responsibilities as part-owner of the Sixers,” Rubin said in his statement. “With the launch of our trading cards and collectibles business earlier this year — which will have individual contracts with thousands of athletes globally — and a soon-to-launch sports betting operation, these new businesses will directly conflict with the ownership rules of sports leagues. Given these realities, I will sadly be selling my stake in the Sixers and shifting from part-owner back to life-long fan.”

Thank you, @sixers fans ❤️ pic.twitter.com/46YX0Zoahm

— Michael Rubin (@michaelrubin) June 22, 2022

Fanatics is a $27 billion company —up from $4.5 billion in 2017— that sells licensed professional and college merchandise online, with more than 10,000 employees in 57 countries and with 100 million users, according to Rubin. Fanatics’ growth has been partly fueled by its acquisitions in recent years of WinCraft, which makes sports-themed merchandise, and Topps, the trading card company it bought for $500 million.

The NFL, MLB, NBA, NHL, MLS and some players unions all have stakes in Fanatics, which has numerous licensing rights and deals with professional and college athletes. Rubin has already succeeded in partnering with stars from other leagues, such as Tom Brady, who is an investor in Fanatics. "When we first bought the Sixers, Fanatics was only in the merchandise business. Now we have the trading card business and the gambling business," he told FOX Sports. "By the end of the year, we'll have individual contracts with thousands of players, and I'll be taking bets on the Sixers." This conclusion, he added, had been in the works for around 18 months, dating to his decision to expand Fanatics’ footprint. 

“Online sports betting and iGaming is a business that we think, for us, will be a very significant business long-term,” Rubin told Yahoo Finance in February. "I'll put it out there: We want to be the no. 1 player in the world long term. So a decade from now, I'd be disappointed if we weren't the top player in the world, both in online sports betting, iGaming. We're just getting started.”

"Given Michael's tremendous success growing Fanatics into a global platform across every major sport, his decision doesn't come as a surprise," HBSE founder and managing general partner Josh Harris said in a statement.