Fanatics CEO Michael Rubin took to Twitter on Wednesday to announce his departure from the ownership team behind the Philadelphia 76ers and New Jersey Devils sports franchises.
Rubin noted the league ownership rules as the primary reason he is selling off his shares of Harris Blitzer Sports and Entertainment (HBSE). HBSE owns the 76ers and Devils as well as a number of other East Coast minor league franchises. Rubin’s stake amounts to roughly 10%.
“As our Fanatics business has grown, so too have the obstacles I have to navigate to ensure our new businesses don’t conflict with my responsibilities as part-owner of the Sixers. With the launch of our trading cards and collectibles business earlier this year — which will have individual contracts with thousands of athletes globally — and a soon-to-launch sports betting operation, these new businesses will directly conflict with the ownership rules of sports leagues,” Rubin wrote.
Rubin noted that the sportsbook is not the only driving force behind the decision. Fanatics also acquired trading company Topps earlier this year for $500 million, which represents another potential conflict of interest for him.
The news is not surprising given Fanatics’ obvious intention to get into the sports betting space. Just last month, the company filed a trademark on BetFanatics, but the company has been taking steps towards the industry for a couple of years.
Fanatics is known primarily for its apparel business, which is an official partner with just about every major US sports league. Early last year, the company tapped former FanDuel CEO Matt King to help lead its emerging businesses vertical. Things got even more interesting for Fanatics when the company brought Jay Z on board as a vice chairman and to serve on the Fanatics Betting and Gaming board. His hiring timed up with the failed attempt to obtain a New York sports betting license as part of a shared bid with the Brooklyn Nets and Penn National.
While New York ended up being a bust, the company is still actively working towards obtaining licenses in other states, including Maryland, where the company was approved for an operator license the day after his announcement. Last fall, the rumor mill started churning about potential acquisition targets for the organization like Rush Street Interactive.
Josh Harris, managing partner of HBSE, issued a statement on Wednesday as well. “Given Michael’s tremendous success growing Fanatics into a global platform across every major sport, his decision doesn’t come as a surprise,” he noted.