Fanatics, the fast-growing betting operator with a solid presence across the United States, rejected recent media gossip, suggesting its boss may consider selling his share in the company or that its revenue is expected to dip by more than 10% this year.
Two media outlets published investigative stories regarding the company last week. The stories outlined different financial worries Fanatics is reportedly facing. Moreover, the reports acknowledged the ongoing legal argument between the company and its rival, DraftKings.
The legal battle dates back to February when the latter company initiated legal action against Fanatics’ new VIP chief, Michael Hermalyn. Before transitioning to Fanatics, Hermalyn held a key role at DraftKings and according to the company, he conspired with Fanatics CEO Michael Rubin to obtain customer data. Moreover, Hermalyn’s former employer disagreed with his transition, citing a non-compete clause in his contract.
However, in a report by Front Office Sports released Friday, a spokesperson for Fanatics refuted the rumors about revenue decrease and suggestions of Rubin potentially divesting his $1 billion stake in the leading betting company. The spokesperson for Fanatics, cited by the publication, strongly disagreed with the aforementioned rumors.
They rejected the rumor that Fanatics revenue is expected to decrease by 14% this year. On the contrary, they claimed that so far, the company’s revenue marks an increase of 17% year-over-year, a result that underlines its ongoing growth. “Margins are meaningfully up this year,” explained the spokesperson.
Focusing on the claim that Fanatics’ CEO “could be looking to sell up to $1 billion of his stake” in the company, the spokesperson denied the claim. He said that media reports were wrong to suggest such divestment, adding that Rubin currently isn’t looking to sell his stake in Fanatics, nor that he had any discussions on the topic.
Addressing speculations about a “growing concern among the credit-ratings agencies that Fanatics is facing rougher seas,” the spokesperson said that such ratings are public. Usually, companies have little influence over credit ratings unless any actions are taken such as strategic takeovers, mergers or divestment of assets.
Earlier this month, Fanatics received a $15,000 fine in Massachusetts over accepting a wager on an in-state college basketball game. Although the wager was $2, it breached the betting rules currently in effect in the state.
