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| Michael Rubin |
Sports leagues, teams and media executives are so concerned about the hemorrhaging regional sports network business that they actively are trying to figure out ways to reinvent it, reports the Philly Business Journal.
One of the most intriguing ideas that has been discussed recently involves Fanatics CEO and Philadelphia 76ers part owner Michael Rubin, an executive who has not been known for sports media deals but who has had several meetings in recent months to see if there’s a path for his company to jump into the flagging RSN business.
Rubin’s meetings with league, team, distribution and network executives have been dormant for several weeks and nothing is imminent, as sources say Fanatics is concentrating on expanding other parts of its business before tackling media.
Several sources said that these talks with Rubin could pick back up again next year. Plus, leagues, teams and media companies are considering several options beyond Fanatics.
Still, the mere fact that these meetings with Rubin took place underscores just how concerned sports executives are about a business that has been a cash cow for teams over the past 30 years.
Rubin’s presence in these meetings may come as somewhat of a surprise, especially since Fanatics is best known as a sports licensing company. But Fanatics has been expanding its business well beyond licensed goods, evidenced by the long-term trading card deals it signed this summer with the NBA, NBPA, MLB, MLBPA and NFLPA. Plus, company executives have made no secret of the fact that they want to get more involved in selling tickets and gambling.
Fanatics has emerged as the type of company that is best-positioned to save RSNs, which are among the most distressed parts of the media business. That includes NBC Sports Philadelphia, the Comcast-owned regional sports network that broadcasts Phillies, Flyers and Sixers games.
RSNs are seeing costs from rights fees rise every year while revenue from distributors drops because of the increasing numbers of consumers who no longer subscribe to pay television.
It simply is not an option for teams to lose that revenue, which means that the leagues are looking for someone — anyone — who can maintain that level of revenue with a declining business. In other words, the leagues need to find a company that’s willing to lose money initially with the promise of a bigger payoff down the road.
Private equity is an option, but sources said leagues are lukewarm to those companies in this instance because they are more interested in short-term gains.
Enter Rubin.
Leagues view Fanatics as a direct-to-consumer company that already has relationships with the country’s top sports properties, not to mention a database that has the information on more 80 million fans — their favorite sports teams and what sports merchandise they are buying.
League executives have spent the better part of a decade trying to convince one or more of the FAANG – Facebook, Amazon, Apple, Netflix, Google – to invest in sports rights.
Increasingly, they are looking at Fanatics in the same way. It has established itself in the merchandise and trading cards spaces. It plans to grow in the sports betting and ticketing businesses.
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