Michael Rubin’s sports company, Fanatics, has sent an internal email detailing its plans to sell its 60% stake in Candy Digital, an NFT firm.
Fanatics declined to comment on the matter.
In 2021, Candy Digital was founded to take advantage of the blossoming digital sports collectible boom. At its start, it partnered with the MLB to produce professional baseball NFTs (under license). It then expanded to produce collectibles for several NASCAR franchises and Netflix’s Stranger Things.
NFTs in the sports sector also declined amid the recent ‘crypto winter’ that saw nearly all digital assets drop in value.
At the time, Candy Digital was valued at $1.5 billion after raising a $100 million Series A round. CNBC reported that SoftBank’s Vision Fund 2, Insight Partners, and Peyton Manning invested in that round.
Rubin wrote “Divesting our ownership stake at this time allowed us to ensure investors were able to recoup most of their investment via cash or additional shares in Fanatics – a favorable outcome for investors, especially in an imploding NFT market that has seen precipitous drops in both transaction volumes and prices for standalone NFTs.”
According to Rubin, Fanatics’ divestment was a “rather straightforward and easy decision for us to make for several reasons.”
“Over the past year, it has become clear that NFTs are unlikely to be sustainable or profitable as a standalone business… Aside from physical collectibles (trading cards) driving 99% of the business, we believe digital products will have more value and utility when connected to physical collectibles to create the best experience for collectors.”
In addition to selling merchandise to fans of sports teams, the company has expanded across the sports ecosystem. Fanatics is now considering an IPO. CNBC added that Rubin recently met with more than 90 Wall Street analysts, discussing Fanatics’ growth plans.
