Where Fanatics finds its next billion; why the AO is sport’s fan-friendliest event

0:03Hello and welcome to Worth Knowing, the sports industry podcast from Leaders, where we talk about what's worth knowing in the business of sport this week. I'm James Emmett. I'm the editorial director at Leaders. And I'm David Cushman. I'm the content director at Leaders. On the show this week, we get under the skin of my interview with Chris Bryant, managing director of Euro 2028, and work out what Zone X planning is. We unpack Michael Rubin's plan for a fourth billion dollar vertical in the fanatics empire. And we explain why the Australian Open is one of the most innovative outfits in global sport.

0:41David, happy new year to you. How the heck are you? I think it's a bit too late to say happy new year. Well, when is the cutoff point? It's certainly not the, where are we, the 14th of January as we record. It depends how much holiday you've had. Happy new year to you. I've had the same amount of holiday as you, James, and that means we've both been back at work for a while, but we haven't quite got around to being together in the studio until this very moment. So it's lovely to see you and lovely to be with you. Yeah. Did you have a pleasant break, David? Anything sort of sporty, noteworthy business?

1:15Did you start a new business? Did you patronise a new business? Did you make any major sports industry appointments over the break? None of those things. I saw you started a sub stack. I did. I did. Dabbling with sub stack. You put your famous yearly A to Z on your A to Z for our American listeners on your new sub stack. Yeah. I loved I, by the way. What was I? Incessant noise. Yeah. I is, you know, I is actually, people talk about X. Yeah. People talk sometimes about Z. As letters. Yeah. As the difficult ones. I, traditionally, once you've done India, is quite tricky. Yeah, we should explain what we're talking about, the A to Z of the sports industry, your annual look ahead via the medium of 26 letters to what's coming up across the sporting year, the sports industry year.

2:13What's coming up on today's show, Dave? On today's show, we are going to reflect a little on the conversation that I had with Chris Bryant, the MD of Euro 2028, which you can hear just down the feed slightly on a podcast we put out a couple of days ago. and I know you've had a chance to listen into that. Thoroughly enjoyed chatting to Chris about a tournament that actually we're not hearing that much about so far, but I think that will change in 2026. There are a few tournaments that we're not hearing about at the moment, are there? Aren't there? The under the radar ones. Yes, some major, major tournaments, which will absolutely be massive news when they're upon us.

2:58But Euro 2028 is one of them. I would say World Cup 2030, the Spain-Portugal-Morocco affair absolutely will be a massive one as well. And do you know what? I hate to say it, but Milan-Cortina approaching fast is also one of them. Yeah, we're just about three weeks away now from the big kickoff in, is it the Dolomites? It's not the Dolomites, is it? I don't know. I think it's not the Dolomites, but it's certainly Italy. But you're right. There isn't a great deal of buzz about it. And actually, there's not been a great deal of stories, good or bad about it, if you exclude the sort of continuing dramas over the ice hockey venue, the primary ice hockey venue and the NHL's, I think it's fair to say, disappointment with how swift progress has been to complete that.

3:55And they had a couple of test events at the weekend, which by all accounts were OK. And they learned a lot, but it's still very much a venue under construction. Now, I'll tell you what is really impressing me about the Winter Olympics. And that is the look of the merchandise that's coming out of it. I feel like the Olympics has really upped its game in terms of the design of the licensed clothing coming out of, is it fanatics that are doing, I think it is fanatics, you know, doing the IOC's merch. But there is some fantastic stuff, heritage Olympic rings branded stuff, Garmisch Partenkirchen. Remember when they did the winter, was it 1932?

4:42Something like that. Yes, beautiful garb. Stay tuned. It's your birthday around the corner, David. You know I like to shop for Olympic merchandise for you. Anyway, should we talk about Chris Bryant? You had him in the studio yesterday. The episode is up on the feed. Our intention with this complimentary podcast is to dig into that interview that we have done once a week. And obviously this week it's Chris Bryant. How did you find it? Really interesting. I think not somebody who we hear too much about considering the importance of his role. And as you will hear when you listen to it, I think his role fundamentally is bringing people together and being the connector for what is quite a complicated event, actually, involving four, five-ish football associations, England, Wales, Scotland, Ireland, and also Northern Ireland.

5:36island governments multiple governments all of whom have a say have an opinion have an impact on how the whole thing is organized and protected and how the whole thing runs from a transportation point of view and so he's got a very sort of operational logistical job there also working very closely as you would imagine with uefa and i thought it was quite interesting he touched on the the division of responsibilities between the local delivery company and UEFA. UEFA, for example, responsible for ticket sales and setting the ticketing strategy. And on that sort of note of events that tend to happen without much drama or without much obvious controversy, actually, UEFA, I think, overall have a pretty good track record.

6:23If you think about Euro 2024, that was a tournament that I'm sure there were things that didn't quite go to plan. But top level, there wasn't much in that tournament or pre that tournament that caught mainstream attention in terms of something being wrong or incomplete. And I think there's a lot of muscle memory within UEFA about how to run these tournaments. It's obviously fortunate for UEFA that very often these tournaments are being played in countries with very well-established infrastructure. So there's not that big construction element that FIFA, for example, has faced, certainly in previous editions of the World Cup, which makes things a bit more straightforward.

7:03But yeah, I think there's a particular challenge with this tournament in getting all the opinions on the table, but then being able to take the right decision for the tournament delivery itself. Yeah, you mentioned challenges and not necessarily having sort of massive obvious challenges. It can't be that common that a senior executive with at least some responsibility for a major difficult moment, you know, a point where things do go wrong. and I'm specifically referring to Euro 2020, which took place in 2021 here, where there were significant security issues, particularly for the final. Chris was the tournament director for Wembley for that tournament.

7:49So he is and was at least partly responsible for what happened on that day. As I mentioned, multiple security issues, a perfect storm of conditions coming well, in the middle of COVID, leading to multiple breaches of the security rings around Wembley, charging of security lines, police horses involved, multiple ticketless people inside Wembley. It can't be that common that an exec with responsibility has the opportunity to make amends or to basically repeat those exact circumstances, but have another go at hosting a major final in exactly the same place. And he is having that opportunity. And it was very clear to me from listening to that interview that he's absolutely learned a lot of lessons there.

8:34And what was shining through Loud and Clear, coming through Loud and Clear, is the focus on security at the moment, 2026 being a big year for the development of security protocols and personnel for Euro 2028. But did you notice a big focus on Zone X planning, David? Do you know what Zone X planning is? Zone X planning, as far as I understand, is around the venue, right? Well, it's specifically the space between the venue and the transport. So it's the ring. It's Wembley Way. It's Wembley Way. And this was obviously the zone of challenge, the zone of difficulty in Euro 2020. But there is clearly a big emphasis going on right now across the nine venues that will be used for Euro 2028 in terms of what the Zone X looks like and the security protocols for those spaces.

9:29At the same time, a lot of work being done on what the fan experience looks like. It's not all about security. A safe experience is a good experience, but there's got to be a little bit more to it than that. and Chris and his team are working on that with their various city stakeholders right now. Yeah, absolutely. And I do think, and we talked about it in the conversation, there's feels like there's a big opportunity there to do something really memorable that takes the the fan zone experience over and above what it currently is in and around these major football tournaments. And that does require a sort of separate set of logistics.

10:06He talked about, I think six million visitors potentially across the tournament, far more people than they can fit into stadiums, even if they're all complete sellouts. So you are going to get, as various cities in the US will find this summer with the World Cup, you're going to get thousands upon thousands of a national team supporters congregating in cities for potentially a couple of days in and around key games and sort of managing that, making sure that that is an entertaining experience. I think leaning on the increased creativity that we're seeing from brand partners in terms of delivering experiences, it does feel like a big opportunity.

10:47There's probably a technological element as well. And that's going to be clearly an area of focus over the next 12 months. Well, there were three key areas, I think. And one of them, I get the impression is quite new in terms of what an outside of venue fan experience, programmed fan experience looks like. Obviously, you've got fan parks, you've got screenings. So those two often come alongside each other. But the third one, which is being discussed with various city authorities across UK and Ireland right now, is this idea of a walk, like an organised walk from a city centre location to the ground or backwards.

11:26Which you do see from certain supporters of clubs. Yes, but it's sort of informally organized, organically put together. This is very much being thought about right now. And alongside that, all the relevant conversations being had with transport operators, train companies that need to schedule extra trains, etc. right now. And just to go back to the multi-stakeholder piece, because I think that is something that we are increasingly going to see recognised and required by major rights holders as they organise events. We are definitely moving into this era of joint hosts of tournaments, whether that's countries or whether that's multiple cities.

12:10Just this week, Switzerland has sort of unveiled its plan for the 2038 Winter Olympics. And it's going to be a Swiss national bid, which is very unusual and, in fact, pretty unique as far as Olympic bids are concerned. Multi-resort, multi-city. It's going to require a lot more joined up collaboration. It's also quite a canny way of spreading the budgetary load of maybe avoiding referendums. We're also going to see it with UEFA in 2032, when the Euros are going to be co-hosted by Turkey and Italy. And that's a complicated job because you're going to have a combination of two very different organising teams, two very different cultures, frankly, in some respect, and also probably a big construction job, certainly in Italy with some stadium refurbishments or new stadiums that are coming on stream.

13:00So the kind of skill set that Chris Bryant specializes in, I think is going to become the one for certainly Olympics, World Cups, European championships moving forward. Absolutely. Another thing that struck me very quickly, and again, back to the fan experience, is you so often hear in the sports industry that the US absolutely sets the benchmark for the fan experience in general. But what is often not taken into account is the freedom and blank canvas that they have with a lot of their sports venues. There are a lot more restrictions, certainly in the UK, with what's possible architecturally in sports venues.

13:43So Chris mentioned the US has open concourses traditionally, which we do not have in general in the UK. There are different alcohol restrictions. There are different sight line pressures. So it's not always fair to directly point to what happens in the US and see if we can replicate that here. Good interview. Thank you. Let's move on and let's consider a couple of the key signings of the week. And FIFA has signed content deals with TikTok and Stats Perform over the last week or so, allowing TikTok to show segments of live World Cup games this summer via national broadcasters, national rights holders, and the data company Stats Perform carrying streams for betting operators.

14:26Major League Soccer in the news has named a new creative and strategic partner, Radhika Dugall, the CMO all over this one. And the partner is Ogilvy. Yes. Yeah. TikTok, Rollo Goldstab going great guns in signing up formal partnerships with rights holders for TikTok at the moment. Panini America has signed an exclusive multi-year trading card partnership with women's three on three basketball league Unrivaled. rivaled. That's a deal that was led by Panini SVP of Marketing and Athlete Relations, Jason Howarth. Infosys CMO Sumit Vamani and ATP Chief Technology Officer Chris Dix have extended their organisation's partnership until 2028.

15:09Glasgow Rangers have a new CEO incoming in April. Jim Gillespie joining the club from outside sport. He has a background and arrives from Scottish social care charity Kibble. Sodexo have named Stephen Kover as their new division operations director for sports and stadia. And Mathieu Sacas is the latest addition at the top level for the French Alps 2030 Winter Olympics local organising team. He is joining as brand and image director. Rob Forden, formerly of Vero Communications and my cricket team, if you'll remember, David. has left Arsenal for a new communications role at Manchester United. He's going to be head of corporate comms there.

15:59Arctos has hired former Real Madrid stadium CEO Santiago Lopez Villas as their European managing partner. And Gary Lineker's goal hanger, which is signing deals left, right and centre, has also hired a trio of senior execs. Andy Hodgson is the new CFO. Chloe Straw is the new director of operations and Emily Kent Smith will oversee written content as the beautifully named editorial director. That's the same role as your role here at the Leaders' Organization. Goalhanger, very much the current darling of the sports industry LinkedIn gang. so many pieces talking about what Goalhanger are doing, what their strategy is, why they are, everything that is new and interesting about how sports content is packaged, distributed, and put together.

16:55Do you know what? For good reason, I think. Agreed. Agreed. And certainly in the sports space, Gary Lineker and the rest is football signed a noteworthy deal a few weeks ago for Premier League archive content and LinkedIn went mad for it. But essentially, that gives them, you know, they've long since moved into video with their podcast output, and that gives them the right to use Premier League video up to 2020, the 2024, up to last season, basically. Gary Lineker is essentially the safe, steady establishment pair of hands, I think the gateway for rights holders to try new things, to, you know, loosen their control of their IP for a more creative sort of modern approach.

17:45They're doing that, but doing it with a very safe establishment figure. Yeah. And just on podcasts, it's worth noting that I suppose the other big beast in the football podcast world, The Overlap, was acquired last week by Global and Global Studios, the new arm of the Global Radio and Outdoor Advertising Organization, and Rebecca Martin in there looking after commercial for that, which is definitely an organization to watch. And I did see just before we popped into the studio that TalkSport have just announced a new head of podcast, Abby Patterson, who comes over from The Athletic. So all these organizations very much upping their game and putting their talent and their squad together as far as podcasts are concerned.

18:31So any one of them do give us a call. Right. This is the podcast to accompany the newsletter that we produce every week, the Leaders Worth Knowing newsletter. And it's our intention to pick out a couple of the most interesting bits from that multi-bit newsletter. If you're not subscribed to that newsletter, A, Y, B, correct it, C, how, D, with this link, leadersinsport.com forward slash newsletter. Yes. And the way it works is James and I alternate writing it each week. So you'll be able to check out our slightly different styles and approaches to writing the newsletter. It's my turn this week.

19:10A couple of items that I have been musing on that you can read about, but that I would like to talk about and get your take on, James. first of which is fanatics which is a company we all know about in the sports industry but i do think we possibly don't talk about enough in terms of just what a colossus it is and is becoming and um some really interesting comments this week um michael rubin the uh i think we call him larger than life founder of Fanatics, was speaking at a conference in the States and sort of went public on his desire and sort of made a prediction that he will quite soon have a fourth billion dollar revenue stream as part of the Fanatics empire.

20:00So they've got merchandise, which currently sits at around four billion in revenues, collectibles and trading cards also around about 4 billion, gaming 2 billion. And he is now in the process of launching a new Fanatics credit card, which he says could be a bit of a game changer. And he had a really interesting quote about how sports fans have never really had a proper credit card that they can sort of believe in and really get excited by. He believes he has the answer to that. So, you know, that's potentially one area that could end up in Michael Rubin's mind certainly as another billion dollar strand to the Fanatics bow.

20:44The other one, he hasn't quite said it could be worth a billion dollars, but I suspect it might one day, is Fanatic Studios, which launched this week. Yeah, Fanatic Studios is a joint venture with Michael Ratner's OBB Studios, which I have to confess I don't know a great deal about, but launched this week with a full roster of partnerships and projects already on the books. There are tie-ups with LA28, Tom Brady's flag football tournament, which I think is taking place in the Middle East, the ESPY Awards, ESPN, WWE, and Major League Baseball. This is essentially an extension of a partnership that Fanatics and And OBB Studios have had since last year where they have collaborated on content output from Fanatics Fest, which is Fanatics big kind of sports, cultural crossover, entertainment, consumer show, which has been performing very well by all accounts.

21:48So although Michael Rubin talks about the credit card being the potential fourth billion dollar vertical in the Fanatics business, he's clearly making inroads in content as well. And yeah, anything that Fanatics do is worth watching with some interest. This got me thinking, actually, it wasn't too long ago that we had the then Fanatics SVP of strategy, Diane Gotwer, on a version of this podcast. I think it was 2024, summer of 2024, in the Convergence series that we were doing alongside LiveScore. And Diane was on to talk about Fanatics' process for adding business verticals into their holding group and their sort of strategic priority list and operations.

22:35Absolutely fascinating. So I listened back to that episode this morning in light of this sort of credit card red herring, in my view, and content move. And what Diane had to say, I think, is really instructive. So first of all, she talked about Fanatics as wanting to be the leading global digital sports platform, full stop. She doesn't talk about them as an e-commerce company, a collectibles company. anything that you or I might call fanatics, that's not what fanatics people call themselves. They call themselves the potential leading global digital sports platform. They want to be the preferred destination for every sports fan.

23:19So at the time when we were speaking, there were these three established verticals. You mentioned them earlier, but commerce, collectibles and betting and gaming everything is driven by that first vertical commerce and arguably that is what most people know fanatics for they have around 900 sports property licenses they provide different services for those 900 partners but by and large they are producing and distributing and marketing licensed merch for those 900 partners. What they are able to do at the same time as providing those services is gather arguably the richest set of first-party data in sport.

24:09And that data is what sits at the center of what Diane describes as the flywheel that drives all strategic decisions at Fanatics. And it's this flywheel that gives them a model for understanding where to go next. And she made no bones about the fact that Michael Rubin and the leadership at Fanatics are really driven to become this digital, this sort of sports fan bear moth. So although they were content with the three verticals at the time we were speaking in 2024, they were definitely planning their next moves. When we spoke, Diane mentioned ticketing and content as the two potential verticals that were being strategically assessed.

24:56And the filter through which all these assessments are made via the flywheel is, do we have a right to win? So is there a competitive advantage in this particular space? If not, it's not worth jumping in. So clearly, with content, there has been a decision within the Fanatics leadership that they do have a right to win there, as they would say. Yeah. And I think it's long been speculated about that Fanatics would make this move into content. I think they've been, Michael Rubin in particular, who is the front man, obviously, has been on the record and talking about this a few times. It's also worth noting that they are currently testing a predictions market in, I think, 24 US states.

25:46This is very much at the sort of beta stage, but we're seeing this sort of predictions markets, but, you know, trend, I guess, sort of sprout up in the US. Here's a quote from Michael Rubin, ever quotable Michael Rubin, a decade from now, we'll be in multiple businesses that we don't even know about yet, he told the National Retail Conference in the US this week. I love what I do at Fanatics, I'm doing this until I die. So there you go. That's Fanatics. Oh, sorry. One more thing. The first party data. I honestly can't think of another organization in the sports industry, aside from maybe in the not too distant future, two circles, that would have the breadth of the first party data available to them that would give them an edge on insight from the market as to what sports fans want with thinking about content here what what drives sports fans fanatics know because they have the data and they can see what they sell to who uh and also at the same time um close this sort of league of very close relationships with ip owners across sport already established already up and running yeah i mean the only real comparison.

27:07It's not really an apples to apples comparison would be Amazon, I guess, but they're not coming from that sort of sports native background. I also wanted to touch on big events, which are happening all over the place. But I think one of the biggest events over the next couple of weeks is clearly going to be the Australian Open, the first grand slam of the tennis year. You mean the AO? The AO, which begins officially on Monday. Don't do that again. You're the one going to Australia, mate. Officially, the tournament begins on Monday. But this week, James, has been badged as opening week in Melbourne by the Australian Open organisers by Tennis Australia.

27:49and this is the week of qualifiers it's the week of you know fan activations meet and greets with players kids day this uh by all accounts fantastic looking one shot slam where a member of the public has won a million australian dollars in a competition have you seen the footage yeah in a competition with uh sinner and alcaraz and shvantec and a number of they filled an arena for that amazing and what they also did on monday which was the the first day of this opening week qualifying week um but they've been billing it as opening week um 29 261 fans through the gate adults paying 20 kids going free really canny bits of marketing potentially a little bit too canny as it turns out because some fans it turns out are saying they believe that they were buying tickets to the opening day of the tournament, which feels like they should have read the small print.

28:46The Olympics did that in 2024. They were selling tickets for a fan zone in Paris, and lots of people thought they were buying quite cheap tickets. The bigger picture here is, literally the bigger picture, is that certainly the Australian Open, the French Open, the US Open are absolutely building on this idea of turning what was historically two weeks grand slam tournaments into three week grand slam events well they're land grabbing bits of the calendar and actually the other one wimbledon is land grabbing physical bits of land in order to do this to expand out uh into the surround so the grand slams are singing from the same sort of hymn sheet they are yeah expanding maybe recognizing their own might in the tennis universe and gigantifying.

29:37Absolutely. And I think it's something we're going to see only continue. And we should probably mention here, James, that you are going to be heading out to Melbourne for the business end of the tournament. That's right. Yes. I am. You don't mess around with the qualifiers. Not opening week, David. Or indeed, middle week, finals week. No, I'm excited. I'm going out to, I've never been to Australia before, actually. I'm heading out to the AO, to Melbourne, for the last knockings of the tournament. I'm going to be there covering the business side of the event for Asset Leaders and for Sports Business Journal.

30:17I'm also then heading off to Brisbane to work on our Leaders Meet Australia event there in a future Olympic host city, which is very exciting. I'm fascinated to see what, to see behind the curtain at the AO because people within the sports industry, I'm calling it, I'm on message. People within the sports industry will often refer to the AO as one of, if not the best all round pound for pound sports events. People talk about the masters as well quite a lot, but the AO has come on leaps and bounds in the last few years, particularly in the fields of experience innovation, both on the ground through partner integration, activations, but also through digital distribution.

31:10their youtube numbers are amazing across the year they've managed to capture the imagination of audiences outside of the now three weeks that they're operational for they're always doing something that is a unique setup at the ao they have about three times the number of staff internally as the other grand slams do because they do everything in-house they do this the majority of the selling, the marketing, the activation without the help of agencies, which is unlike the other Grand Slams. They're constantly generating news. They raised the prize money to $111.5 million, which is up 16 % this year on last year and puts it second in terms of prize money and Grand Slams.