Michael Rubin, chief executive officer of Fanatics and a minority owner of the Philadelphia 76ers and New Jersey Devils is selling his stake to avoid conflicts with the NBA and NHL related to ownership rules, ESPN reported.
Transitioning from Part-Owner to Life-Long Fan
Rubin, who holds 10% in Harris Blitzer Sports & Entertainment (HBSE), the company owning the NBA franchise from Philadelphia and the NHL franchise from New Jersey, is reluctantly divesting his stake in HBSE to facilitate further growth with Fanatics as the brand is about to launch into sports betting and individual player partnerships.
“As our Fanatics business has grown, so too have the obstacles I have to navigate to ensure our new businesses don’t conflict with my responsibilities as part-owner of the Sixers…Given these realities, I will sadly be selling my stake in the Sixers and shifting from part-owner back to a life-long fan.”Michael Rubin, CEO, Fanatics
The brand that is selling licensed professional and college merchandise online has been preparing its entry into sports betting for a while, starting with the recruitment of former FanDuel chief executive officer Matt King in May this year and followed by creating a betting and gaming division and going on a recruitment drive. In August, the merchandiser founded in 1995 in Jacksonville, Florida, reached a total valuation of $18 billion.
“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,” Rubin explained.
The Writing Was on the Wall
The news that Rubin is leaving HBSE prompted the company’s co-founder Josh Harris to express his gratitude to Rubin for his ‘fierce passion, entrepreneurial mindset and steadfast commitment to doing the right thing,” implying that the expansion of Fanatics into the global scene would inevitably mean Rubin would have to sell his stake.
“Michael will always be a member of our HBSE and Sixers family, continue to be a presence courtside, and a key partner in our collective commitment to be a force for good in Philadelphia,” Harris concluded.
In November, Fanatics’ objective to enter into sports betting suffered its first major setback after the New York State Gaming Commission refused to issue sports betting license for the company despite the support of rap legend Jay-Z.
Fanatics was in the center of rumors that it would enter sports betting via the M&A path by acquiring a US-based sportsbook only for Rubin to come out and quash reports of a possible acquisition implying there were no suitable candidates on the company’s radar.
In May, Fanatics filed with the US Patent and Trademark Office to register BetFanatics, a mobile sports betting, fantasy sports and gaming application.