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Why Amazon-NFL Apparel Partnership Means a Big Win for This Brand

If Amazon has a retail playbook, marrying content with commerce would likely be Chapter One.

Once again the online juggernaut has taken steps to bring consumers the streaming content they want and the related products that complete or at least complement their experience.

Just days after announcing a 10-year partnership to broadcast 15 of the National Football League’s “Thursday Night Football” games each season through Prime Video, Amazon is expanding its NFL relationship and in turn, bringing aboard one of retail’s fastest-growing sellers that knows a bit about online expansion in Fanatics.

A report from Sportico (which is owned by Sourcing Journal’s parent) said that the NFL is bringing “thousands” of officially licensed products to the e-commerce giant as part of the arrangement. While NFL merchandise had already been sold on Amazon, much of the league’s official online shop will now become available on Amazon as well.

Amazon wouldn’t confirm details, but a company spokesperson told Sourcing Journal that the company “continues to collaborate with the NFL to enhance our customer experience, and we look forward to expanding our assortment of NFL products.”

Brands within Amazon’s “Fanshop,” where shoppers filter their favorite team or teams, as well as the type of products they are interested in, including Fanatics, NFL Pro Line, New Era and Outerstuff. These brands are already some of the league’s biggest partners outside of Nike, whose products won’t be included after famously breaking up with Amazon.

Given that licensed sports apparel isn’t typically a category Amazon is known for, the partnership represents a substantial haul for the online titan, which hasn’t failed to keep bringing in sales in droves.

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Amazon’s apparel and footwear business was already on track to generate $45 billion in revenue this year before any NFL deal was struck, making it the top seller of these categories, according to Wells Fargo analysis. Amazon is estimated to control as much as 12 percent of all apparel and footwear sold in the U.S. and up to 35 percent just in the digital domain.

But Amazon isn’t the only winner in this partnership. This would be a big step for Fanatics as well, which operates the NFL’s online store and will be opening an NFL Shop storefront on Amazon’s website in the near future, Sportico reported.

This would be the first time the licensed fan gear company sells on Amazon’s platform. Fanatics already has partnerships with the three other major U.S. pro sports leagues, including the National Basketball Association (NBA), the National Hockey League (NHL) and Major League Baseball (MLB) as well as Major League Soccer (MLS), NASCAR and the PGA Tour. It recently inked a deal with the National Lacrosse League as well.

Within the league itself, Fanatics also has official partnerships with 25 of the 32 NFL teams. The retailer expects to reach $3 billion in sales this year, while its e-commerce operation is already up 30 percent year over year, it said. Overall, Fanatics counts 80 million customers.

On Wednesday, Fanatics secured a $320 million funding round led by Silver Lake Partners, bringing the licensed sports merchandise seller to a valuation of $12.8 billion. Fanatics will use the funds to expand its vertical commerce division, explore additional mergers and acquisitions and expand internationally, according to sources close to the deal.

The growth was jumpstarted last August when Fanatics secured a $350 million funding round, sending the company on a series of acquisitions. That month, the retailer scooped up former competitor WinCraft, which manufactures and sells sports-themed hardgoods such as home, office and automotive merchandise. One month later, Fanatics bought collegiate sports headwear licensee Top of the World and its 220,000-square-foot warehouse in Norman, Okla., which will become the base of Fanatics’ headwear business.

Fanatics also entered various joint ventures to expand its portfolio. In February, the retailer launched Fanatics China, a joint business venture with private equity firm Hillhouse Capital, to bring its array of licensed sports merchandise to the market. Fanatics China is expected to be worth more than $1 billion.

Prior to that, Fanatics also formed a JV with headwear seller Lids to bring merchandise to 770 Barnes & Noble Education stores on college campuses throughout the country and online.

So while partnering with Amazon always remains a question for apparel sellers, it appears Fanatics has already built out a strategy that marries design, production and distribution of merchandise on its own merit.

Fanatics’ victory in the Amazon deal may be Nike’s loss. Nike, which is the NFL’s official on-field partner for authentic jerseys and sideline apparel, ended its wholesale partnership with Amazon in late 2019, ending a pilot program it began in 2017, amid an overhaul of the athleticwear and footwear giant’s retail strategy to become a more DTC-focused business.

Amazon’s streaming deal with NFL comes after Amazon Prime streamed 11 of the Thursday night games, which aired on Fox throughout the 2020 season. Amazon had one exclusive game last year.

Exclusive Thursday Night Football broadcasts could encourage more viewers to sign up for Prime memberships, especially since the holiday season begins to take shape two months into the NFL season. Of course, more NFL games also could serve as a retention driver for Amazon the same way Amazon’s Prime Video has, in that the e-commerce giant has another arm of new, exclusive content that keeps the platform fresh and sticky.

The new broadcasting deal includes a league option to give Amazon a regular season game on Black Friday, the report said, which would be a massive opportunity for its advertising capabilities. As the sole broadcaster and distributor of Thursday Night Football, Amazon would have the opportunity to sell every commercial slot, include ads for its own products throughout and even ads targeted to the consumer watching the game.