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E-commerce giant Fanatics scores a new deal with the NFL

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E-commerce giant Fanatics scores a new deal with the NFL

The NFL Players Association picks Fanatics as the lead manufacturer and seller of licensed merchandise featuring players’ names and images. One of the top draws is Carolina Panthers and Pro Bowl quarterback Cam Newton.

Nike Inc. may be used to being the biggest maker and seller of National Football League player merchandise like jerseys and T-shirts featuring the name of Pro Bowl quarterback Cam Newton, but starting next year it will have to go through Fanatics Inc. and pay it a sub-license fee to sell the same stuff.

Any company that wants to sell official NFL player products—Cam Newton jerseys, Odell Beckham Jr. bobbleheads, Richard Sherman dangle earrings—will soon have to go through e-commerce giant Fanatics, a designer, manufacturer and retailer of licensed sports merchandise. Fanatics was founded in 2011 by itsexecutive chairman, Michael Rubin, who founded and then sold e-commerce, fulfillment and digital marketing services company GSI Commerce Inc. to eBay Inc. in 2011 for $2.4 billion. GSI, originally known as Global Sports International, developed and operated e-commerce sites for professional leagues and associations, including Major League Baseball, the National Association for Stock Car Racing, and the Professional Golfers’ Association of America as well as theNFL—a business Rubin retained as he sold GSI and started Fanatics.

The NFL Players Association is granting the Jacksonville, Fla.-based Fanatics the right to say who can use players’ names and images on apparel and other merchandise, according to a letter the union sent Friday to its current partners and reviewed by Bloomberg News.

Starting in March 2017, Fanatics will replace Nike as the biggest maker and seller of player merchandise. If Nike or others want to sell player t-shirts or other merchandise, it will have to pay for a sub-license from Fanatics.

Both Ahmad Nassar, who leads the union’s marketing division, and Fanatics spokesman Meier Raivich declined to comment.

The Players Association chose Fanatics, already the biggest online seller of fan gear, in part because its design and production process is remarkably fast. When a big moment happens on the field, the company can put celebratory T-shirts for sale within hours, regardless of whether the player involved is Pro-Bowl quarterback Cam Newton of the Carolina Panthers or sixth-year tackle Derek Newton.

For example, New York Giants receiver Odell Beckham Jr. became an overnight sensation in 2014 when he made an acrobatic one-handed touchdown grab in a game against the Dallas Cowboys on Sunday Night Football. It took weeks to get product related to Beckham’s catch in the hands of consumers. By then the enthusiasm had died down, and the commercial opportunity was lost.

In the past few years, NFL Players Inc. has looked to make more sweeping deals, but with fewer companies. It’s made Panini America Inc. its exclusive licensee of trading cards, and broadened its relationship with Electronic Arts Inc.’s EA Sports video games.

Those categories cater to a deep player assortment—both trading cards and video games have always included stars and backups alike. Apparel and hard goods are more challenging. Last year roughly 1,000 NFL players, about half the league, was featured on a piece of clothing or merchandise, or made an official appearance. The union’s ultimate goal is to make all 2,000 players marketable in some way.

“The driving charge of the NFLPA’s licensing and marketing arm, NFL Players Inc., is to maximize the sales and assortment of player-identified products and to generate increased exposure for our members,” the NFLPA said in the letter. “We have spent significant time evaluating industry trends and new business models in order to determine the most effective way to achieve these objectives.”

Fanatics, which has licensing agreements with all four major U.S. leagues, runs the NFLPA’s e-commerce website, and has worked with the NFLPA since 2012 on what’s called the All-Player Program, offering jerseys of every single NFL player.

Fans may not care who holds the NFLPA licenses. The most noticeable change may be that Fanatics will be able to make available more products featuring a wider range of players. The players — especially those that aren’t superstars — may notice too, because every time one of “their” products is sold, they get a portion of the revenue.

Fanatics is No. 38 in the 2016 Internet Retailer Top 500, which ranks companies by their annual web sales. Nike is No. 47 in the Top 500 and No. 12 in the B2B E-Commerce 300, which ranks companies on their B2B web sales.

Sign up for a free subscription to B2BecNews, a twice-weekly newsletter that covers technology and business trends in the growing B2B e-commerce industry. B2BecNews is published by Vertical Web—Media LLC, which also publishes the monthly business magazine Internet Retailer.

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