New Lawsuit Accuses NFL and Fanatics of Suppressing Competition in Memorabilia Sales

A new lawsuit has been filed in a federal court in New York accusing the NFL and its 32 teams of an illegal conspiracy with the online marketplace Fanatics to suppress competition in the memorabilia market and artificially raise prices for officially licensed jerseys, hoodies, and other products.

Key Facts

Fanatics, the NFL, and its teams have engaged in unfair business practices to benefit from sales of licensed merchandise, which Fanatics has repeatedly denied.

The New Lawsuit

The lawsuit, filed by plaintiff Charles Franz, accuses the NFL and Fanatics of reducing the number of online retailers allowed to sell NFL-licensed products and creating exclusive deals to suppress competition, preventing other retailers from using NFL-related terms to advertise their products, thereby pushing more customers to the owned Fanatics marketplace.

Key Background

Fanatics is the exclusive seller of memorabilia for almost all major professional sports leagues in the United States, including MLB, NBA, NFL, NHL, and NASCAR. The company operates over 300 online stores and other physical shops, according to the lawsuit filed on Friday, and has relationships with more than 1,000 product suppliers, 150 college teams, and professional teams. Fanatics has operated NFLShop.com since 2006, according to Sports Business Journal, and in 2016 signed a long-term agreement with the NFL that includes the rights to operate 15 NFL team sites, in addition to selling licensed products on Fanatics.com and Fansedge.com. Since then, the NFL has acquired a stake in Fanatics after purchasing a 3% share of the stores worth $95 million in 2017. In December 2020, Fanatics acquired WinCraft, the supplier of non-apparel licensed products for the NFL, such as flags, wall art, and lanyards. In 2022, the NFL was the largest investor with $320 million in a $1.5 billion funding round for Fanatics, which also included backing from the NFL, MLB, and NHL Players’ Associations.

The Big Number

$31 billion. That is the valuation of Fanatics as of December 2023, up from $4.5 billion in 2017. Fanatics’ Chief Financial Officer Glenn Schiffman stated that the company plans to go public eventually.

This new lawsuit is an attempt by the law firm Burns Charest to hold the NFL and Fanatics accountable for their partnership, as a federal judge ruled last year in favor of the NFL in a similar lawsuit brought by another plaintiff, stating that the dispute belonged in private arbitration.

The new lawsuit seeks to “restore competition in the market” and asks for Franz, along with anyone else who purchased NFL-licensed products online from Fanatics or a team, to be compensated for the artificially inflated prices they paid.

A spokesman for Fanatics described the new complaint as “just a copy and paste” and “a blatant attempt by the same lawyers – after they scoured for a new plaintiff – to try to get a second bite at the apple. We intend to vigorously defend against this action and are confident of achieving the same result.”

NFL representatives did not immediately respond to a request for comment from Forbes on Tuesday.

The Critical Quote

Franz’s lawsuit states: “The conspiracy as a whole, and each individual part, has allowed the defendants to charge supracompetitive prices for NFL-licensed products and share in the monopoly profits between them.”

This is not the first time Fanatics has faced accusations of unfair business practices in court. In August, Fanatics and Panini, another online sports platform, filed lawsuits against each other in a dispute over licensing rights for NBA and NFL trading cards. Panini sued Fanatics, accusing it of engaging in “calculated, deliberate, and unfair competition” to create a monopoly in the trading card industry when it acquired the card-making company Topps last year. Fanatics responded with a counter-suit, claiming that Panini attempted to “thwart the success that Fanatics has achieved through a series of unfair and unlawful acts.” The dispute is ongoing, and both sides have filed motions to dismiss the suit.