Michael Rubin & Darren Rovell Keynote | Wharton Sports Analytics & Business Initiative

This is gonna be a treat. I’ve known
Michael for a long time, he’s one of the best entrepreneurs I’ve ever witnessed. You are looking skinnier these days, you
look older, but skinnier a lot older.
– All right so let’s get started. So I have an
article here from 1995 where you’re talking to the Wall Street Journal about
how you got involved. You started Ski Shop at 13 years old. Why did you think
you could do business that young and with a father who’s a veterinarian and a
mother who’s a psychiatrist, where did it come from?
– You know, the truth be told, I think you kind of gravitate toward what you’re
good at, and I sucked at school. I was a terrible athlete, but I always
loved to work. And so for me, I started with different jobs when I was literally
eight years old selling things door-to-door. I used to make stationery
on the computer and sell it door to door, I’d buy and sell baseball cards, I had a little
snow shoveling business where I had a bunch of people in the neighborhood working for me, but I was good at business so when I went to start Ski Shop, I was
actually 12 when I started Ski Shop Ski Tuning Shop originally, it was the
one thing I was good at, and I liked it. I knew how to ski, and I wanted to turn it into
a business, so you know to me if you could take something that you’re
passionate about, something you’re excited about, and turn it into a career,
an opportunity, there’s nothing better than that.
– So you did that and then like
tell us about–there was a failure there or was there not? How did that
ski business stop?
– Yeah so you know if you kind of go through my, and it’s
almost embarrassing to admit now because I’m 47, so I’ve been in business you know
really I opened my first ski shop when I was 12 but I started working on it when I was 8, it’s been
like a long time, I’m aging myself I feel like it was like
prehistoric days. But I’ve had so many failures in my business career, and
generally each failure has led to my next success. But my first, I think, epic
failure was when I was 16 and I had been, I had opened a
retail ski store about ten minutes from where I grew up in Lafayette Hill,
suburban Philadelphia, and the first year I opened it up we did great, I was 14
years old, I did $125,000 in business, I made about $25,000, I had no
marketing expense but I was in the media all the time because I was a 14 year old
owning a ski shop. And then at 15 we got to about a quarter of a million dollars in revenue, and when I turned 16 had a few issues. The first was
it didn’t snow and if you’re in the ski business and you’re selling skis, it
doesn’t snow, it’s not a very good set of ingredients for success. The second thing
was I got cocky and I started spending money like crazy and personally, and so
when the year ended at 16, I literally had $200,000 in bills,
I had $100,000 in inventory, I had a Porsche that I had bought, that was what
my balance sheet looked like.
– So he sucked at sports but he pretended like he was an athlete.
– Yeah exactly. No, that’s not true actually.
Okay, so here I am and when I tell you like I mean I’m going
down and basically going bankrupt, and I was in such bad shape that the sheriff
from Norristown actually became a really good friend of mine because every day in
February, March, and April of when I was 16, she dropped off a new lawsuit of
somebody suing me. So I’d wake up in the morning before I’d
go to school, she’d come and she dropped off the lawsuit and I probably got sued
100 times as a 16 year old. And I thought I was done and I thought I was
going bankrupt and basically you know my parents said to me like hey it
was a good try, now you can be a normal kid again and
go to high school and go to college and stop screwing around with this business
stuff. And I went to hire a bankruptcy attorney and I hired this
bankruptcy attorney, and you know going through this whole thing, I’ve got the
two hundred thousand dollars in liabilities. He says to me, by the way, how
old are you? I said I’m 16. He said well that changes everything, you can’t actually
legally owe money until you’re 18. I didn’t know that, so they got all the creditors
together, and I’ve now had you know 50 people in the room who want to kill me
who I owe $200,000 to and you know, everyone’s kind of
growling at me, and they said by the way you know, Mr. Rubin is actually not
mister, he’s actually 16 years old, and long story short I was able to settle my
debts for $38,000, basically 18 cents of the dollar. And I grew up in a
very middle-class family, I went to my you know, I went to my dad and
said, it was the first time I’d ever asked to borrow any money as I was building the
business, and I said can I borrow $38,000? He said you can borrow $38,000 so long
as you agree to go to college and give up this this business thing and so I
took the $38,000 and then a few weeks later we had another little accident and
the little accident that followed was there was another ski shop that went
bankrupt then had $200,000 in inventory and it got auctioned off for $13,000.
And I bought it, the only problem was I had no ability to pay for it,
it’s just small detail. So I went back to my dad and I said hey dad, I just need
another $13,000 my dad’s like are you crazy? You think I’m giving
you another $13,000 like, I got you out of this mess, that’s a lot
of money, I’m not giving you any more money. So I found a guy
who lent me the money, but he said he wanted $1,000 a week
interest for the $13,000, which actually seemed like a great deal because nobody
else wanted to give me the money, so I borrowed the $13,000 and it got me into
a brand-new business which I basically got the yellow pages out—
they wouldn’t even have yellow pages anymore—I got the phone book out
started finding ski shops and selling the skis in bulk to other
retailers and that actually led me to get in the close out business, and now I
was 16, by the time I was 21 I was doing a hundred million dollars buying
and selling closeouts making ten million dollars a year profit and the
reason I tell you this story is at, you know, 14 I had this great success, at
16 I was nearly bankrupt, and by 21 I was the largest person buying and
selling athletic footwear closeouts in the world. And so it shows you that every failure
can lead to a success if you really work hard at it.
– And that’s when TJ Maxx and
Filene’s Basement and all those guys, there was an arbitrage opportunity there.
– Different world, yeah, I used to sell shoes to Modell’s here,
and they used to be the Sports Authority, and Ross and TJ Maxx and all these retailers.
– Okay, so then we get to GSI commerce, which is
something I at least observed, and so the idea when the
internet was coming up was everyone could have virtual inventory, essentially,
right, so like I could run a website, I could be fulfillment, but I can have
virtual inventory which means that I don’t really have to take much risk so
when you’re negotiating deals you just say we got a great website, right. You, with GSI commerce basically said we’ll have the inventory, right?
– Well I think our promise was a little different to be honest. I think in 1998 I knew
nothing about the internet, I had this business buying and selling closeouts.
– Oh, you got to tell the internet story. Yeah so it’s kind of all related, so
basically I had this business buying and selling closeouts, so I owned a couple footwear
brands and I was maybe at this point a 200 million dollar company actually trying
to compete with Nike and Reebok very unsuccessfully, and this little
thing called the internet came along, and a guy who who Darren also knows well called
me in 1998, he said hey Rubin, what are you doing about this internet thing. I
basically said in my reaction to him, screw the internet, it’s all these young
kids who they just they raised money they know how to lose a lot of money and
they grow quick but they don’t know anything about business I don’t want
anything to do with it and I hung up on him. And he called me back a few hours
later said you know I really think you should think about this internet thing. So I
kind of did what I think a lot entrepreneurs do, I started asking my
biggest accounts from my other business so I was asking Modell’s Sporting Goods
and Dick’s Sporting Goods and Sports Authority what are you doing about this
e-commerce thing, and everyone said the same thing to me, which is we think
e-commerce represents a big opportunity, our board of directors are
putting a lot of pressure on us to kind of come up with an e-commerce strategy.
We have no idea what to do, so like you’re young, you’re 25, if you know how
to solve this thing you know, tell us and that’s basically
what led me to start GSI commerce in 1998-1999 was just really kind of
listening to people in the market and then finding out that my biggest accounts
from my legacy business had no idea how to approach e-commerce so that’s how GSI started.
– But you guys were different in that you actually accepted,
you had inventory?
– Yeah look, the original business by the time I sold the business
in 2011 we had, I don’t know, 10 million square feet of warehouses, we had tens of
billions of dollars of transactions going through. Basically, GSI
commerce became the largest provider of e-commerce services and marketing
services to big brands. So it could have been a Ralph Lauren or a Toys R Us or it
could have been a Dick’s Sporting Goods or a GNC or an Estée Lauder, we operated
most if not all aspects of these companies’ e-commerce businesses, starting
in 99. I sold the business to eBay in 2011. Okay so you sell the business to
eBay in 201, they basically say we have a lot of people who collect sports
memorabilia or sports is a big part of of eBay, so we don’t want the fanatics
part of it?
– Yeah so eBay bought the company because they looked at, and it
was a very sound strategy, eBay looked and said look, there’s this
little company in Seattle called Amazon and eBay wasn’t competing with Amazon as well as they wanted tom so they said they want to take all of the big retailers
that we had, all the big brands that we had, and get them into the eBay
marketplace to make it more competitive with Amazon. And so when they looked at
some of the other businesses that we owned, they weren’t interested in owning
those businesses because they were owned inventory businesses. eBay didn’t own any
inventory, and they were saying look, we want to make our marketplace more
competitive with Amazon, we’re not trying to have trying to be like Amazon directly by owning inventory.
– Got it so then they they say we’ll sell you back the fanatics part?
– Yeah, so we sold the company for 2.4 billion dollars to eBay in 2011 and we
simultaneously bought back three businesses, including Fanatics, from eBay
for a half a billion dollars.
– Okay so the Fanatics is three hundred million
dollars was valued at, and now today it’s gonna do more than three billion dollars
less than ten years later.
– Yeah. Okay so when you had
GSI and with Fanatics you had, you know the risk originally, right, you were
willing to take the risk. So like there’s this room in Jacksonville or wherever it
is where you know you have 6,000 Jeremy Lin Knicks bobbleheads
you know and but you had all the business. We might still have those by the way. Especially because they were Knicks products.
– Right, exactly. So you basically said, well I have all
the business so if I take the risk then it’s fine, because I have all the business, but now you’re at a point where you are
having less and less risk because you buy Majestic and then you have the MLB
rights where you’re making basically everything except, everything
for fans in Major League Baseball and the NFL. You’re the only ones that can
essentially print a Nike jersey so all the risk that you had now is not risky
because it’s, I order it, you make it, you ship it
– Yeah, so let me bring it up a
level. When I bought the company back in 2011, Fanatics was essentially a Zappos
of licensed sports. So it was basically we had a broad assortment of license
ports merchandise from you know hundreds of brands. I had a really simple belief. I
thought in 2011 the same thing I actually thought five years earlier when I
was running my old company, I thought that Amazon and Alibaba were gonna kill
everybody. Okay so if you essentially believe that any commerce, Amazon, outside of China ,Alibaba in China, are gonna run over the
rest of retail and the rest of e-commerce, then the question is why
would I buy the business? Okay, and the reason is because I had a vision that
was very different from what the company was when we bought it in 2011. So what it
was was a Zappos of licensed sports on everybody else’s merchandise. I believed
to make the company interesting we had to radically change the vision and so we
always had this vision that was in my head of how do we create this new
category, kind of like e-commerce 2.0 of what we call v-commerce, and that’s
basically if you become a vertical company, think about like an H&M or Zara
or a Uniqlo. Or a lululemon. We design, we develop it, and we sell it directly to the consumer except for we
do that primarily in e-commerce versus stores and we do it with the sports
marks. So my vision was to kind of create this giant vertical e-commerce
company, so if you look back at eight years later when I bought the company in
2011, it had about 250 million dollars in revenue the year before. Next year will
be about 3.2 billion dollars of revenue but much more important, only 2% of what
we sold in 2011 were our own products that we designed, developed, manufactured. Now
it’s over 50% and in another five years it’ll probably be 75%. And then we also
work with this incredible vendor network of other products but we don’t sell
products that you can buy that are commonly available at other pure-play
e-commerce companies like an Amazon or an Alibaba, so when you go to Fanatics, which
includes the NFL Shop, the NBA Store, Major League Baseball Store, you know
hundreds of individual colleges, hundreds of individual teams, the merchandise that
we sell is basically the proprietary to us and it’s unique and it’s
differentiated. So my belief was always the only way to win against Amazon and
Alibaba is to be completely differentiated and that’s what we did. We
changed the business from something that wasn’t differentiated to something
that’s highly differentiated today, and that’s what kind of created the
verticality and what’s critical to success in the business.
– Now fanatics as a brand, the way I see it, was most people the brand gets bigger and bigger and
they know the brand first before they buy something. I don’t think it was that,
as an outsider or someone who was covering, I think people, because you
established what you just told me I then bought the product first and then I knew
oh, this is what Fanatics is. So you didn’t really pay attention to or
you didn’t need to worry about marketing, branding because people were gonna have
to buy it from you and then they would discover the Fanatics name, is that how
it works? Look, our belief was we started with all
the e-commerce rights of the different sports properties, you know, kind of
globally, so we started again with the NFL’s e-commerce business and NBA and Major
League Baseball, NHL and hundreds of individual colleges so
you know, if you go to buy a New York Giants jersey today, if you go to the NFL
shop, that’s Fanatics, if you to the New York
Giants store that’s Fanatics, if you go to Fanatics it’s Fanatics, if you go to FansEdge it’s Fanatics, if you go to Lids it’s Fanatics, if you go to Kohl’s it’s
Fanatics so you know we continue to work to give this incredibly broad assortment
that we have, we have more than a million SKUs, and we syndicated to, you know,
most big retail partners so that they can best service their fans and so you
know, we didn’t wake up and go to bed saying how do we build the Fanatics
brand upfront, it was how do we build the verticality, how do we gain the
rights, and over time we’re gonna build a Fanatics brand.
– What’s your biggest challenge today?
– You know look, I think we’re still an incredibly competitive
business and I go to bed every night and wake up every morning paranoid about
competition, so you know there’s this little company in Seattle called Amazon.
– So you worry about it, you worry about Amazon? There’s a little company in China
called Alibaba, there’s lots of other companies that I worry about. You know
how does the landscape change, so we need to make sure that we’re doing what’s
best for the fan day in and day out, and always putting the fan first to make sure
that we’re best servicing them. What’s really special about us, it’s funny I was
just having the conversation with one of the larger retailers in the world, sorry, one of the largest retailers in America, 20 billion dollar-plus retail I
met with yesterday, and the person who runs the retailer said to me, I said how
big is your assortment for across your entire business? I said we carry 1 million
SKUs, and then they said but with our partnership with you we now carry 2.1 million SKUs because just the little license sports category in this
broad retailer we just double the SKU base so we always think about how do we
treat the fan best but of course I would be stupid and a bad
business person if I didn’t you know go to bed and wake up paranoid about some
of the most successful companies on the planet killing us.
– I got to get to this social injustice justice part because you are all in, like I’ve
probably never seen someone I mean this is not like I’m gonna do three or
four things a year. You’re thinking about it every day. Quickly, how did the Meek Mill thing come about, and did you feel like, because some people say like oh there’s a risk for me
identifying, going all-in what made you go all-in?
– Yeah so look, it’s Philadelphia hopefully a lot of people know this story,
you know Meek was a really close friend of mine before anything
happened, you know, we’d spent a lot of time together and hung out
all the time, and for me kind of growning up as a you know, white, middle-class kid in
suburban Philadelphia, you don’t think shit that happened to me could possibly
happen. So I had a life-changing event and that Meek always told me about this
crazy judge and how she was trying to control his life and she wouldn’t let
him work and I’d heard all the stuff, but it was almost so hard to
believe and actually believe it, and then he literally just in the random
circumstances of life he called me on the Monday morning before one of his, you
know, dozens of probation hearings that he had. He said hey Michael, I really want
you to see what happens in court, can you come today, I said hey
I’m gonna leave one o’clock to go to Meek’s court hearing, and I went in there
and I watched uh you know I think the story is pretty well-known at this point,
but I watched a probation officer get up and say you know Robert Williams, that’s
Meek’s real name, has done everything we’ve ever asked him to do, he’s a model
probationer, we recommend no sentence, and then I watched the district attorney
get up and say we recommend no sentence. And Meek was being the judge brought
him in for a probation violation because he popped a wheelie on a motorcycle and
he got a traffic ticket for it and then he’d broken up a fight in the airport
and also you know there were no charges in either situation, and so I looked
at Meek, I said you know you’re good, there’s no chance that anything’s
happening because that’s the world I come from, you know, the rational, the
world works rationally. And then the judge ten minutes later sentenced him to the state prison for two to four years. And when you watch a really good friend
of yours you know go to prison for not committing a crime if you’ve got the
ability to do something about it and you don’t, I think you’re a bad human being. So the whole thing started, had nothing to do with fixing criminal justice,
only how do I get my boy out of jail, and then what I realized was three months into it you know I was so obsessed with what I’d seen in the
courtroom and you know proving how bad the judge was, which I think we did a
pretty good job of, and what Meek always said to me was Michael, I was charged for
pointing a gun at multiple police officers. If a black man points a gun at
multiple police officers that’s called suicide and he said, do you
think I’m a suicidal person? And he said this to me a hundred times. I never
thought about it. One day I’m in prison and he says to me, Michael, you’ve got to get the gun I never pointed a gun at anybody, I threw it
on the ground, you can prove it, there’ll be scratch marks on the gun, so
I called the investigators that were working for us and I said you
gotta look back at the original arrest and literally the first police officer
they interviewed said, oh no he never pointed the gun the whole thing’s a lie.
Like, what? This was Super Bowl last year, Super Bowl 2018, we said will you sign an
affidavit, he said yeah, by the way you know the whole unit was dirty, we were
like stealing money from people, and it was like Training Day
meets Philadelphia. And so I called Meek up and said hey, great news you’re
getting out of prison in the next couple days. This was Super Bowl weekend of 2018. He said why, I said well everything you told me was true the police officer came
forward and said you didn’t point the gun. And anyway it took us another three months
to get him out of prison and that’s where my conversation from Meek shifted
from how do we get you out of prison to how do we fix this really screwed up,
broken criminal justice system. And so had he got out of prison right away I
don’t think we would have ever done anything about it, but knowing that I
knew that he was proven that he was innocent originally and never
committed a crime and he’s been in jail the first time for being falsely charged
in the next four times for never committing a crime, put in jail five
times in his life never committing crimes that he was
charged of and the last four times never committed a crime, that’s when we said we
gotta do something about this. And the really interesting thing was he had
always gone to prison for technical probation violations and probation is
2/3 of the criminal justice system and so that’s one hundred percent of our
focus now changing the laws that create the problem in probation and parole.
– And you’re taking like a businesslike approach to it. It’s a little bit different than other advocacy groups.
– Yeah and we’re being very aggressive, we started, you know myself and nine
other individuals put in over 50 million dollars to start the
organization, we’re not taking any money from anybody but really well-off people
who really want to help fix this issue. We’ve hired an all-star team,
we’re gonna keep strengthening our all-star team, and we’re you know
we came up with bold goals, you know within weeks of starting this thing I said I want
to get a million people out of the system and people looked at me, they’re
like you’re nuts, like how do you come up with a million people? So well there’s
six and a half million people, six point seven million people in the system, four and a half million on probation and parole my, back of that envelope math there should
be a million, a million and half people on probation and parole, so there’s a pool of three and a half million people we should get
out of the system so we gotta get at least a million people out of the system. And we just take a business approach, come up with bold goals and go after it
– Honorable, awesome, it’s real. It’s good to see. So we’re here at
Wharton, might as well tell us what your advice is to you know, people out
there, kids out there who are trying to– I came to get advice from this group,
these guys are highly educated and smart, I’m the one who barely made it out of high school,
– By the way, you welched the deal with your father because well you went to school,
but then you dropped out.
– I went for six weeks. I went to Villanova for six weeks, so I thought I made good on my obligation. He
said you have to commit to go to college, I did go to college, it was a short step. But seriously you know I always tell
people if you want to work in sports you have to work hard enough to be worthy
enough to get paid because so many people want to work for free. What’s
what’s your advice either working in business or working in sports how to
differentiate yourself and get the job? I’ll go ahead and answer the first question,
it’s just like look if I had a little bit of general advice, I have a few guiding
principles that have been pretty good to me in my life. I talk about them a lot by
the way, the first or like I think relationships are everything. I think
whether it’s in business, whether it’s trying to change the laws in
Pennsylvania or every other state we’re gonna go to, I think if you build great
relationships you can make a lot of things happen and what I see is often a
lot of really smart people who miss the relationship part of life
and then you don’t make things happen. So I’m a guy and you know, I joke about it, but everyone in this room is smarter than me, I promise you. But for me, I’m someone who has always been good at making relationships, has
always been good at selling a vision, so I get done a lot of what I want to get
done. So I think building relationships is really important. A lot of people are scared to fail. I mean I see it all the time, people have great ideas and
they just talk about it. Talk is cheap, man, you get a great idea and it’s like, you
know for us, if I failed at getting a million people out of the system and I get 700,000
people out of the system, I’m still thrilled. So to me, you just got
to come up with your ideas and you got to go for it. And by the way, you’re
gonna fail. I promise you, I have failed so many times, I will fail so many more
times. Failing this part of growing, so I think you need to embrace just kind of
going for it, that failure is part of life, and kind of you know, go after
whatever you want to go after, and then I think the last thing is getting great
people around you. Like the way I built my success is I build great teams, and
you know I think if you build great teams, I think you’re gonna be very
successful in life. And I think you got to build great teams , and then you got to
lead the teams but if you do this, you do these couple of things, you
build great relationships, you build great teams you kind of go for it and
you know recognize when things aren’t working and keep evolving, I think you’re
gonna be pretty successful.
– We got questions from the audience?
Not yet? Okay, five more minutes. Let’s see, how do how much do you enjoy being
an owner?
– You know look, I think for me you know, I’m fortunate, the two managing partners of the Sixers, Josh Harrison and David Blitzer, I
think I heard Blitzer’s here later today, both terrific guys who have you know, put
together you know, a great they had great vision when they bought the team eight
years ago and have done a great job building it. You know for me, I feel fortunate, I’m from Philadelphia,
the Sixers were my team as a kid, I’m in the sports business, I’m learning a lot
from this experience you know, I’m involved in a nice
way, so you know I really enjoy it. The NBA is my sport, I’m not really
you know for me the two sports I really love are the NFL and the NBA. We also, our group also owns the the New Jersey Devils. I’m less into hockey than I’m into basketball and and football, but
it’s been a great experience. You love getting close to it,
and obviously you have good seats. You look look, I
always think if you can do something that you love and turn that into a
business that’s great, and I’ve done that my whole life. I started as a skier, it was
the only support I was good at, and I turned that into a business.
– You should show some video of that by the way. The only thing I was good at. I actually have a bet with
Meek right now, he actually thinks he’s never skied but he says he’s gonna be a
better skier than me, so this winter we’re determined to ski. I
actually hope he breaks a leg just he’s shot his mouth off so much about being
better at every sport than me. – Are you still good at skiing you think?
– I’m not good anymore I’m respectable. I can get down the
hill in a respectable manner. I’m no longer good but I lost track from the
question because my ADD kicked in. Mine did too. Anything else we
didn’t say that you know that you think these people should know?
– Look I think the sports business, I think everyone’s here because this is a sports business
initiative, I’ll tell you, I think the sports business is a great
industry. It’s a big industry, it’s one that has so much impact on society so if
you look and say like hey what’s a good business to be in, sports is a good
business, okay, and by the way and we need great talent in sports as well so I
think you’ve all made a good decision for being here today. I think sometimes
people think you can’t create a lot of opportunity in sports. I took a company that I bought for 300 million dollars in 2011 and was valued two years at four and a half billion dollars, and I think we’re
just getting started so I think the sports industry, it’s a big industry,
it’s an exciting industry, it’s one that impacts societies. I think one of the
great things about sports is it brings people together and I love bringing
people together, so you know to me, you know I’m excited all of you were here
and you want to make an impact in the sports business.
– I’m gonna end it with an uncomfortable question.
– Nothing makes me uncomfortable. So people here have spent
money on business school and ten years ago it was said well, you’re not
gonna go into sports because it’s not it’s gonna lower the average of what I
spent and but that’s changed now because of the Ivy League educated guys that
have gone to business school who are running teams so what do you say to
people who say oh you know it’s easier to get the 180,000, 220,000 dollar job out of business school versus
go with my passion and sports and figure out how to make it.
– Not even a question. You always gotta go with your passion like I always say if you don’t wake up
every morning and go to bed every night excited about your career then
you’re doing the wrong thing. I’m excited to you know like, I hate
putting my phone down when I go to bed because I’m like I still like the action,
and when I wake up I’m excited to see what happened for them you know for the
few hours that I slept, and so to me being incredibly passionate about what
you’re doing is the best opportunity we have, and you know what I’m the
first time in my life, I hate to admit this but I’m like, you know I always thought of myself as a kid and I still act like a kid, but at 47 you’re
like okay well, I don’t know how many you know I’m in the middle of my life so
like I feel fortunate that I’ve got to do great things
you know most days in my life and I think everyone should take that, and I think
you can turn that into a good business opportunity so I don’t believe that you
need to go to an investment banker you know some 200,000 dollar job,
you know I think you know if you’ve got the passion and the excitement you can
you know you you’ll take what you like and turn it into an opportunity.
– This is from Warren Laufer. How does the memorabilia business, autograph, game used, fit the rest of the vision of Fanatics? So you brought sportsmemorabilia.com,
– So first, sometimes in business one of the most important things is to be
lucky. Don’t ever underestimate
luck. So I tell everyone the story about how I got in the collectibles
business. I bought a company in 2012, it was a company called FansEdge ,it was one of the leading e-commerce licensed sport sites. We started it myself, bought Fanatics and I bought FansEdge, and then this collectibles
business, I said what’s this sports collectibles business I don’t want to be
in it, I plan to sell the business off, and I was literally selling the business
to the management team and someone came forward and said you know what, I think you
could do a good job of this business It was about a 10 million dollar business then,
I said I don’t want to screw up, screw around with this whole thing. Like
Michael trust me, we can build a good business here. So I never valued it at
all when we bought it, I never had any interest in it, I didn’t value it, I was
trying to get rid of it. And fast forward eight years later our collectibles
business today is well over a hundred million dollar business, it’s incredibly
successful and profitable, it’s the largest memorabilia company in
the world by far and away, we also work directly with athletes who are vertical,
so the way it used to work is you had all these authenticity issues that Darren
you talked about before, where some little guy makes a deal with an athlete
he signs and he sells to somebody else, who sells somebody else, and by the time
it gets to the fan you don’t know whether it’s authentic or not. For us, we have thousands of signings a year with athletes ourselves and then we
sell directly to the consumer so we can completely control the experience. So it’s become a really good business, it’s a big business, it’s growing fast, I
think it could go from the over 100 million dollars say to probably a half a
billion dollar business because we have the direct relationship
with the fans via Fanatics and FansEdge and NFL shop and MLB store and the hundreds
of sites that we operate. I think there’s no one better positioned to lead and
innovate that business than us. I love how people on the
outside complain of the prices and then you sell it out right because to get
three guys on a helmet cost a lot of money. These days these players are
making more and more money so they want to be paid more for their shirt.
– Look we spend you know you know tens of millions of dollars you know paying athletes to
sign merchandise for us.
– Alright, this is from Brianna DeBose. What things have
you learned about your own privilege working with Meek and how do you carry
this over to professional sports you manage? – Yeah so it’s funny,
people say to Meek all the time and they say to me, you know kind of you know he’s
so lucky to have had you and Jay-z who was also, neither one of
us could have gotten Meek out of prison on our own. People say how lucky Meek is and I
actually look exactly the opposite like I think I’m lucky as could be because I
learned so much from Meek, I’d say it happens in so many different aspects. I
was just telling the story, I’ll give a couple examples of it but you know first
I’d say I was very unaware of how the country really worked and Meek would
always educate me far before anything happened, Meek would always educate me
about kind of there’s America and there’s black America, and I would say to him like Meek, that’s bullshit like you know kind of
like, you’re this really successful rapper, you’re doing great
like why are you whining, and then you know when I watched him go to prison for
not committing a crime and now I’ve seen that this happens to millions of people
you realize that you know he’s opened my eyes to a world I didn’t understand
but even he’s been incredibly, I’ve learned from him in business too, he was you know, how many people in this room know the company Fashion Nova, okay so I’m so old
and so dumb I’d never even heard of it, That was the first time I’d ever heard of it. I mean Darren, you’re much older than
me, so. Sixties are tough for you. Seven years younger, but okay. God is not being good to you on the age barometer. He’s insulted me more times
than you’ll ever know, so I’m okay. So you know Meek calls me up a couple months ago, he’s like hey I’ve become buddies with this
guy, this guy who owns Fashion Nova You gotta see the business and by the way, this kid’s built an incredible business, you know a
multi-billion dollar business and he’s built it based on the influencer program
and social media and like I didn’t even know what the company is and now it’s
it’s another incredibly successful vertical e-commerce company that I
learned about from Meek, you know Meek called me up–
– That you probably should have known about, right? Of course I should’ve known about it. And by the way, I went and asked everyone of my company and no one else had heard about it because
we’re all that guys–the company’s been around for 20 years so
so everyone’s gotten older. I asked my daughter, she was like dad of course I know what that is, are you an idiot? But there’s things that happen all the
time, you know Meek came to me with a collaboration that he thought we should
do together that we’re actually thinking about doing, he came
to me and said like Michael, Off-White, I wear Off-White sneakers
like crazy, I wear them most days, but Meek’s like you know this brand’s incredibly hot
you should work with Off-White in the licensed sports business, so you know we
learn from each other just the conversations are good like I mean you
know. The only thing that’s changed in our relationship is up until he went to
prison we used to only have fun together and now it’s you know it’s kind of a
combination of both but you know we learn from each other every day
– Interest in becoming a majority owner of a team? You know the way I look at it is I’m
building a really you know, Fanatics is a monster business, it’s you know 3.2
billion dollar revenue business, it’s one of the most exciting companies you know
globally in the sports industry you know, everywhere. I’m having a great time
building it you know, I think is it something that I would do for the right
situation over time? Absolutely. Is it something that I’m
waking up and going to bed thinking about? No, it’s if you have the right
opportunity that presents itself, you know I’m all-in and if it doesn’t you know I’m
completely you know comfortable and you know. I’m having like
you know I’ve got great partners and you know Josh Harrison and David Blitzer who are the managing partners of the Sixers you know great partnership you know, love
being part of the Sixers and you know and you know again, it’s
just situational.
– All right last question.
I’ve told you you got to get on social media for years, is that true?
– You did tell me to get on social media for as long as I’ve known
you, yes.
– Ok but you recently really went all-in maybe what like a year and a half ago?
– Well I I didn’t go on it until May of 2018 and it was I was just harassed
by everybody around me for a while and I just you know,
– And I’m not a meaningful person.
– You were not a meaningful voice in the harassment. So I went on about a year and half ago, and I’ll tell you for me, it’s been great. There are things I care about that I want to talk about whether it’s
what we’re doing with criminal justice reform, whether it’s sharing different, you know, what I think are helpful messages for other entrepreneurs,
whether it’s talking about things that we’re doing at Fanatics.
– Or even just to get to know you, you know like doing things that you like to
– Yeah so I’ve been on it a year and a half, it’s been an A minus experience, by the way I will tell people the the first
week I went on social media I didn’t know you could like a comment,
and you probably remember this, so I was on social media for all of like three or
four days, and there’s a comment where somebody says trust the process not the
coach, and I don’t know how, I did not click on it my mistake, I’m still
blaming my daughter at the time, I’m throwing her under the bus, and somehow the comment get clicked on and it was on ESPN with about ten minutes later that
you know one of the owners of the Sixers was trashing the coach. Obviously I had
no idea that the comment was liked, so I’ve had a few bad experiences but
mostly good, my experience has been very good overall. But I now know that
you can like comments so you need to not fat-finger them.
– You haven’t trended on Twitter right, or anything like that? Look, there’s always interesting things going around, when we announced the Reform
Alliance that was you know probably the biggest probably the biggest thing on
Twitter that day. You know, we find out we find ourselves in the interesting
things often.
– Well I think I’ve had more negative experiences than you.
– Which makes me happy.
– Right, great, great. Alright now for real, Michael Rubin, thanks
so much.

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