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Fanatics Signs Major Multi-Year Overwatch League Merch Deal

The Overwatch League unveiled a multi-year deal on Monday with licensed sports merchandiser Fanatics for the company to handle all fan gear sold across retail and wholesale channels worldwide. The deal also has Fanatics creating a dedicated website for Overwatch League gear and working with Activision Blizzard to create new gear and license out to other third-party companies.

“As we’ve gone around building out the Overwatch League, we’ve continued to figure out how we can find the right partner to take our business and build the Overwatch League,” Brandon Snow, chief revenue officer for Activision Blizzard esport leagues, told Variety. “One of the big areas to build the brands of these teams and service fans is with products and merchandise.”

Ross Tannenbaum, head of special projects for Fanatics, told Variety that Monday’s deal can be traced back two years ago when his company was looking into how it could expand beyond “stick and ball sports.”

“We started looking at esports,” he said. “A lot of traditional sports team owners are also owners in esports and they have been reaching out to us.”

Tannenbaum said he and his team started looking into ways they could get into esports. Fanatics already operates the ecommerce websites for all major professional traditional sports leagues, so taking the same approach for esports seemed to make sense.

“A year ago at BlizzCon, Bobby Kotick invited us to come out, get a tour,” Tannenbaum said. “Then we went to the [Overwatch League] arena in Burbank and watches some matches live and the efforts that were put in to make that successful. We went to the grand finals in Brooklyn, which was an amazing event. At the end of the day, it wasn’t hard to fall in love with what they are.”

Snow said the key to teaming with Fanatic was its proven track record and evidence that it has the ability to both scale up quickly and be reactive to fan needs.

Starting with the Overwatch League second season, which kicks off on Feb. 14, all Overwatch League gear — including what is currently being sold directly through Blizzard — will move over to the Fanatics-run Overwatch League site. The new international network of Overwatch League online storefronts will be the first to sell gear for the expansion teams: Atlanta Reign, Chengdu Hunters, Guangzhou Charge, Hangzhou Spark, Paris Eternal, Toronto Defiant, Vancouver Titans, and the Washington Justice. Fanatics will also operate on-site retail stores for all Overwatch League regular-season matches at Blizzard Arena Los Angeles and for other league events.

“Going forward we are going to take on some of the products already on sale, but also start designing new products, fan gear, and sub-license to other companies for headwear and in other areas,” Tannenbaum said. “We’re going to be creating really cool lifestyle products and will be working with Brandon [Snow’s] to design those.”

Tannenbaum noted that Blizzard did a great job creating a jersey for every team and every player in the first season.

“Our goal now is to step in and take what they’ve done and try to apply what we’ve learned over the years,” he said. “We have experience in every aspect of how sports products are licensed, created, and merchandised worldwide. We want to do this for Overwatch League.”

The new website is set for a mid-January launch, he said, with plans to start rolling out dozens or so other localized sites in Europe and Asia over the next year.

While Tannenbaum said the launch will include a solid selection of items, it won’t be until the 2020 season that fans will see real “game changers” in the gear available.

A big part of why Fanatics decided to enter the esports market through Overwatch League is because of how Activision Blizzard structured the league and rights management.

“It is one of the reasons why this is a great opportunity for us and the right place to enter esports,” he said. “Activision Blizzard can offer today, through group licensing, league, team, player and hero marks, which is a huge challenge. They are a one-stop shop to do that.”

While Snow declined to go into the specifics of how Overwatch League handles royalties and trademarks in its league, he did note that the league has the rights to allow Fanatics to create products across all international properties. Traditional professional sports usually have companies like Fanatics dealing with player unions, team owners, and the league.

“I can’t go into the finances of league structure, but it is built so all leagues and players benefit,” he said. “It’s structured to let us at the league level scale much more broadly, but it benefits the entire system.”

Tannenbaum said that thanks in part to this structure, Fanatics will be — among other new sorts of products — creating player-focused branding items as well which could include things that include a player’s name or likeness.

While Overwatch League is a major initiative for Fanatics, it’s also a way to test the water for future esports deals.

“We didn’t go into this and say, ‘Let’s throw some cash against the wall and see if it sticks.’ When we pick something it’s very important to make the right decisions. By doing this deal there are several other deals we may not do. We chose to go down this path because we believe that in the intermediate or long-term this sport can be as important as any sport as we run. We’re all very excited at the opportunity. It’s a new start-up business. I wouldn’t be surprised if in three to five years this is average or above average to top of the list in terms of revenue.”

Tannenbaum added that Fanatics has “tremendous interest in Call of Duty and other things Activision Blizzard is working on.”

“With that being said, we are fully invested with Overwatch League,” he said. “We want to be great at this before we roll out too many things at one time.”

Fanatics chief interest right now is in Overwatch League, but Snow noted that Activision Blizzard sees collegiate Overwatch play as a growing opportunity for the company, especially in terms of merchandising.

“Merchandise for collegiate Overwatch? Eventually, yes, we’ll be doing that. It might be sooner rather than later,” he said. “We have our own platform called TESPA and there are many universities offering scholarships to have players come to their university. We are very tapped into that. The collegiate system sits side-by-side with professional esports. We are very focused on how we are going to market it in a different way and at some point merchandising is going to be a part of that.”

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