Fanatics sells 60% stake in NFT firm Candy Digital
- Candy Digital was valued at $1.5 billion in 2021
- Fanatics unconvinced about market amid wider crash
Digital sports platform Fanatics is selling its 60 percent stake in NFT specialist Candy Digital, according to CNBC.
The US media organization has seen an internal email confirming that Fanatics is selling its shares to an investor group led by cryptocurrency dealer bank Galaxy Digital amid concerns that the digital collectibles market is not a sustainable standalone business.
Fanatics CEO Michael Rubin said in the email that the decision was “easy to make” and believed that the future of NFTs was integration with physical goods such as trading cards and merchandise.
“We believe digital products will have more value and utility when connected to physical collectibles to create the best experience for collectors,” said Rubin.
“To that end, we already have a broader and more meaningful set of NFT and digital collectibles rights within our Fanatics Collectibles business that came with our trading card rights (NFL, MLB, NBA and more), which we seamlessly integrate with world-class physical collectibles rights we currently have.
Candy Digital has major partnerships with Major League Baseball (MLB), Nascar and WWE and was valued at USD 1.5 billion back in October 2021. However, it has been affected by an industry crash in the NFT market and laid off a third of its 100 employees in November last year. It is unclear how much Fanatics received for its stake.
SportsPro has contacted the company for comment.
SportsPro says…
If confirmed, Fanatic’s decision to cash out and (probably) cut its losses is hardly a surprise. Having built its reputation on licensed merchandise, the company is looking to expand into other areas, including betting, and bought trading card company Topps last year.
Fanatics itself is now worth $31 billion, following a $700 million funding round in December, and projected revenue of $8 billion by 2023. Rumor has it that Rubin may be looking to take the company’s audience in the near future and the swings in net- play The NFT market may have turned out to be a distraction.
Web 3.0 is undoubtedly still on the agenda for Fanatics, which hopes to achieve success in the space as part of its broader portfolio. It has the relationships and resources to make it happen.
