On Thursday (October 28, 2021), the International Olympic Committee partnered with the sports retailer Fanatics in Florida to complete its first ever international e-commerce transaction.
The revenue-sharing arrangement, which runs until the Los Angeles Summer Olympics in 2028, offers Fanatics a share of sales from Olympics-related products. Sales from the Beijing Winter Olympics in 2022 will not be covered by the arrangement, though, as China has a separate e-commerce agreement with Alibaba.
Fans will create memorabilia related to past and upcoming Olympic Games, and they have already begun creating items related to the Paris Summer Olympics of 2024. Additionally, the business receives the right to manufacture and market Olympic rings.
Financial terms of the pact weren’t disclosed, and Fanatics didn’t offer estimates as to how much it could profit from the IOC agreement.
“This is an exciting launch for us, as fans from an increasing number of territories will be able to purchase official Olympic merchandising and connect with the magic of the Olympic Games ahead of each edition,” IOC television and marketing executive Timo Lumme said in a statement.
“We are looking forward to collaborating on this new shop with the Organising Committees of Paris 2024, Milano Cortina 2026 and LA28,” he added.
Fanatics already held Team USA’s e-commerce rights via a deal with the United States Olympic Committee. The IOC deal should align it with more revenue, especially around the 2028 Summer Games in the U.S.
This is an exciting launch for us, as fans from an increasing number of territories will be able to purchase official Olympic merchandising and connect with the magic of the Olympic Games ahead of each edition. We are looking forward to collaborating on this new shop with the Organising Committees of Paris 2024, Milano Cortina 2026 and LA28.
Timo Lumme
It’s unclear what the IOC generated from merchandise sales for the pandemic-impacted Tokyo Games this past summer.
But to paint a picture of the revenue that could be available to Fanatics, organizers projected $100 million from selling licensed products around the 2020 Olympics. For the 2016 Games in Brazil, officials initially estimated more than $400 million in sales. And the 2002 Winter Games the last Olympic games held in the states generated $500 million in gross retail sales for licensed products, according to the Salt Lake Organizing Committee.
Fanatics plans to leverage a heritage line that offers apparel, souvenirs, and other merchandise around previous Olympic games, including the 1996 Olympics in Atlanta. And the company’s “Olympic Collection” will target younger consumers with toys and sports equipment products. The collections are available domestically, in Mexico, and in European countries, including the United Kingdom and Switzerland.
The IOC pact also helps strengthen Fanatics’ economic moat. The company is valued at $18 billion after chairman Michael Rubin lured investors, including Japan-based SoftBank, to pump money into the e-commerce giant.
In 2021, Fanatics started a non-fungible token (NFT) company valued at $1.5 billion. Fanatics also said its trading card company is worth $10 billion. It took over just about all of Major League Baseball’s e-commerce rights and aligned with America’s team with the Dallas Cowboys’ e-commerce rights.
Fanatics also has operations in the world’s second-largest economy China. That division is a joint venture with investment firm Hillhouse Capital, an Asia-focused private equity fund with companies in Asia’s e-commerce and retail sectors.
Fanatics estimates it will surpass $3 billion in sales this year and plans to leverage its over 80 million user base to grow future digital offerings including sports betting.
