Fanatics CEO Michael Rubin is looking to sell up to $1 billion of his stake in the sports-merchandise empire as skeptics on Wall Street claim the company’s growth has stalled, according to a report.
Rubin, whose net worth is pegged by Forbes at around $11.5 billion, has made headlines in recent weeks for his lavish, celebrity and star-studded “white party” that he throws at his $50 million beachfront mansion in the Hamptons every summer.
Despite the glitz and glitter of his parties, however, Fanatics has suffered from a drop in revenue this year that has Rubin looking to sell as much as $1 billion worth of company stock to an outside buyer, according to the Air Mail newsletter.
Writer William D. Cohan cited individuals who viewed Fanatics’ financials as saying that the company’s revenue for this year is expected to hit $6 billion — which is 14% less than the $7 billion in revenue that it generated last year.
A Fanatics spokesperson denied the claim, according to Cohan. The rep insisted that Fanatics is expected to generate $8 billion in revenue this year, which is 14% higher than 2023.
The spokesperson also denied to Cohan that Rubin is looking to sell stock in the company.
Wall Street observers raised eyebrows after Fanatics shelved plans for an initial public offering that was originally scheduled to take place sometime this year, according to Air Mail.
“There will be a moment in time where it will make sense,” a Fanatics spokesperson told Air Mail when asked about the planned IPO. “Right now, we’re heads-down on building our business.”
Credit-rating agencies have also raised red flags when it comes to Fanatics, according to Air Mail.
Last September, Fanatics reported “meaningful margin deterioration” through the first half of 2023.
S&P Global predicted that Fanatics would face “challenging operating conditions” in 2024 after parts of the business barely turned a profit in the second quarter of last year.
According to the credit-rating agency, Fanatics’ “adjusted EBITDA” margins fell to 2.5% from 8%.
S&P Global also noted that Fanatics’ debt rating had dropped, which put the company at risk of having its credit rating downgraded, according to Air Mail.
In December, another credit-rating agency, Fitch, lowered Fanatics’ credit rating as well as that of its parent company and its collectibles subsidiary due to losses in its gaming and online-betting division.
Fitch warned that the company’s failure to reduce losses “could lead to a deterioration of its liquidity and put pressure on the company’s credit profile,” according to Air Mail.
A month earlier, Moody’s downgraded the credit rating of the debt accrued by the Fanatics subsidiary that sells officially licensed sports merchandise.
Moody’s cited “significantly weaker than expected earnings and cash flow and the risk that the increasingly difficult operating environment will challenge its ability to achieve the appropriate level of returns on its current investments,” according to the report.
The Post has sought comment from Fanatics.