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Nike enters long-term partnership with Fanatics for college fan gear

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Yahoo Finance reporter Josh Schafer breaks down what the new Nike-Fanatics partnership means for Fanatics and what potentially lies ahead for both companies.

Video Transcript

DAVE BRIGGS: Sports commerce platform Fanatics entering into a long-term partnership with Nike to manufacture college sports fan apparel. Josh Schafer is here with that story. And Josh, from a business perspective, what does this mean for Fanatics and for Nike?

JOSH SCHAFER: Yeah, Dave. So when we talk about this deal, of course, we're talking about Nike and college athletics. Those are big teams, right? So when you look at the Final Four this year, March Madness, that whole tournament for the men's and women's, over half of the teams and the men's and women's college basketball tournament this year wore Nike brands.

And so in a statement provided to Yahoo Finance, the CEO of Fanatics commerce, Doug Mack, referenced that this deal is really going to lead to faster speed to market for Nike college gear. And a Wall Street analyst I spoke with, Cristina Fernandez, over at Tesley Advisory Group, echoed that same sentiment, noting this is really about expanded assortment and faster speed to market. When we think about this move, though, in kind of a broader sense and what Nike's doing, this is about Nike kind of getting out of China overall and their supply chain, diversifying that a little bit, and also just building out their college brand.

They're going to be able to do more now. They're going to have more teams. You can sort of give more of a little bit of a fan experience. And the other thing, it's probably going to help them in their bottom line once this eventually happens in 2024.

SEANA SMITH: And Josh, how much of this has to do with name, image, and likeness? Because we've seen a number of these companies push even further into college sports, clearly a huge opportunity for both Fanatics and Nike here.

JOSH SCHAFER: Yeah. A huge opportunity for Nike, right? When you talk about the fact that they're now a more attractive brand to schools probably because Fanatics has that big email listserv. They really know how to get out and attract customers.

So now if you're Nike, you're a closer partner with them. It really helps Nike from that sense. And Fanatics has this cool deal now with the jerseys. You can customize jerseys on Fanatics for college players.

And a final thing with NIL that I always love to point out, when we talk about these buzzy moments that the kids make the T-shirts of, right, the fun stuff, March Madness-- you hit a three pointer, and you get that T-shirt. Well, if you're partnered with Fanatics and you're partnered with Nike, you could get official Nike-licensed gear now quicker. And those are the deals this March Madness that we saw that did really well, something quick off a buzzy moment, that's big NIL money for the kids and some nice kickback for Nike too.

DAVE BRIGGS: Really interesting, you talk about perhaps getting out of China. I want to ask you quickly, what's next for Fanatics? Is it going public? Is it sports betting? What's the next frontier?

JOSH SCHAFER: It's got to be sports betting that we're watching, right? What are they going to do with that Fanatics Sportsbook? We know Michael Rubin, made the move out of Harris Blitzer as far as the ownership of the 76ers goes and the Devils. They're now freed up to get into Sportsbook and in sports gambling more.

When are they going to get in? We've heard maybe it potentially end of summer, heading into the fall. Where is it going to be? I'm interested to see what happens come NFL season, Dave.