Fanatics CFO on CAC, LTV, and Capital Allocation Across Verticals

Summary

Run the Numbers – Podcast Summary

Episode: Fanatics CFO on CAC, LTV, and Capital Allocation Across Verticals
Host: CJ Gustafson
Guest: Glenn Schiffman, CFO of Fanatics
Date: April 2, 2026

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Episode Overview

In this episode, CJ Gustafson sits down with Glenn Schiffman, CFO of Fanatics, to unpack the playbook behind monetizing sports IP, metrics like Customer Acquisition Cost (CAC) and Lifetime Value (LTV), and the art and science of capital allocation across multiple verticals at one of the most dynamic sports commerce companies in the world. Glenn shares wisdom from a career that spans entrepreneurship, two decades in investment banking, and leading finance at major tech/media firms. This episode offers actionable advice for financial operators, with memorable stories and candid takes on decision-making, negotiation, and operational KPIs.

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Key Discussion Points & Insights

1. What IP Monetization Really Means

• Not Just About Money:
  • “Monetization is a crude word. It focuses only on money. Money's the output, money's not the input. The input is helping brands and helping businesses delight their fans and bring them closer to the fans. And that's what we do.”
    – Glenn Schiffman [00:02]
• Fans First Model:
  • The order of focus at Fanatics: fans → partners → shareholders.
  • If you delight fans, partners are happy—and then shareholders benefit [07:13].

2. Anatomy of Fanatics’ Business Model

• Multi-Vertical Platform:
  • Partnerships with Nike, Barnes & Noble, Lids; manufacturing fan gear and managing stadium stores [03:29].
  • Operates e-commerce, in-venue retail, DTC, and collectibles/trading cards [04:30; 09:17].
• Tailored Partnerships:
  • “We have a thousand different partners at Fanatics...they're all snowflakes. They're all different…tailored to the needs of our partners, respectful of the nuances of what's going on in their business.”
    – Glenn Schiffman [08:10]

3. Building Great Partnerships

• Partnerships Transcend Legal Terms:
  • “If you have to rely on three to five clauses to make the partnership great, you don't have a great partnership. Once the partnership is signed...if you refer back to that agreement, it's a bad day.”
    – Glenn Schiffman [09:27]
• Contract Clarity and Trust:
  • Having to enforce the contract post-signature usually signals trouble [09:50].

4. Metric-Driven Decision Making

• Key KPIs for Success:
  • Free cash flow is king—more important than profitability alone [10:49].
  • Top-of-funnel: Net new users, transactions, average order value (AOV), and discounting effectiveness.
  • Operational: Margins, time to porch (delivery), perfect order rate, reduction in customer service contacts [11:56].
• Quote:
  • “Revenue and profitability are the great equalizer. More important than profitability is free cash flow. Like free cash flow doesn't lie.”
    – Glenn Schiffman [10:49]

5. Input Metrics as Leading Indicators

• CJ Summarizes:
  • “Things like time to porch in perfect order is…what people come to this podcast for…input metrics…leading indicators of how well this is going to turn into cash.”
    – CJ Gustafson [16:42]

6. Customer Acquisition, LTV, and Cross-Vertical Engagement

• Single View of the Fan:
  • Extensive investment in data infrastructure to unify customer profiles.
  • “Our multi-business customers…buy, bet and collect…spend 4.7 times as a single business customer.”
    – Glenn Schiffman [17:11]
• Fan Cash Loyalty:
  • Omnichannel loyalty program operating across in-venue, online, retail stores, betting, and collectibles [18:30].
• CAC vs. LTV:
  • Aim for static or slightly increasing CAC, but multiplying LTV through engagement across verticals [18:59].
• Cross-Sell Engine:
  • E-commerce leads the funnel, but trading cards, gaming, and soon a Fanatics credit card, offer new on-ramps [19:53].

7. The Role of AI and Personalization

• Harnessing AI:
  • Using AI for deduplication, intent detection, next-best-offer, and personalized experiences [21:10].
  • “Now the slope is vertical in terms of how fast technology is changing...we're harnessing it...for…efficiency…making our products better, making our go to market motion cleaner and more attractive.”
    – Glenn Schiffman [22:14]

8. Sales Motions & Margin Profiles

• Multi-Channel Sales:
  • D2C, wholesale, and retail each have distinct margin and expense profiles.
  • Strategy is to meet fans where they are (in-store or online), not force them to a channel [23:01].

9. Budgeting, Predictability, and Revenue Focus

• Budgeting Approach:
  • Autonomous business unit budgeting, but with shared corporate services.
  • Long-term contracts add predictability; sports fan behavior is highly repeatable.
  • “I will always focus on the infinite, which is revenue. I and every other CFO...loves to cut costs and loves to drive efficiency. But I will always focus on the infinite versus the finite.”
    – Glenn Schiffman [24:25, 24:51]

10. Capital Allocation: Starve the Losers, Feed the Winners

• Key Principle:
  • “If something's not working, more money typically isn't going to make it work…if they're winning in the KPIs…then you feed that…But if they're losing, yeah, you starve them and you force them to figure it out.”
    – Glenn Schiffman [29:55]
• Compounding Returns:
  • Capital should be allocated to opportunities where incremental investment delivers increasing returns (the “holy grail” of investing) [32:29].
• Case Example:
  • Gaming and collectibles divisions received increased investment as metrics signaled outsized returns [29:55].

11. Balance Sheet Management and Share Buybacks

• Balance Sheet as a Performance Multiplier:
  • Efficient use of debt, equity, and buybacks can amplify shareholder returns.
  • “When you buy your own stock back, it's an asset you know well, there's no integration risk, there's no M&A risk...”
    – Glenn Schiffman [34:01]

12. Lessons in Negotiation and Career Progression

• Negotiations:
  • “Deals tend to not age well, so you kind of want to get them done…A counterparty will tell you how they want to negotiate it. You just got to listen, ask questions and listen.”
    – Glenn Schiffman [39:49]
• Early Career Lessons:
  • “Take more risk…network more aggressively.”
    – Glenn Schiffman [41:33]

13. Tools & Tech Stack

• Migrated Entirely to Oracle Fusion:
  • Unified HR and ERP—”Uphill both ways. Barefoot walking on broken glass.” [42:33]

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Notable Quotes & Memorable Moments

• “Money's the output, money's not the input…the input is helping brands and helping businesses delight their fans.” – Glenn Schiffman [00:02]
• “If you have to rely on three to five clauses to make the partnership great, you don't have a great partnership.” – Glenn Schiffman [09:27]
• “Free cash flow doesn't lie. Cash doesn't lie.” – Glenn Schiffman [10:49]
• “Our multi-business customers…tend to spend 4.7 times as a single business customer.” – Glenn Schiffman [17:11]
• “If something's not working, more money typically isn't going to make it work.” – Glenn Schiffman [29:55]
• “I will always focus on the infinite, which is revenue…cannot cut my way to revenue growth.” – Glenn Schiffman [24:51]
• “Deals tend to not age well, so you kind of want to get them done.” – Glenn Schiffman [39:49]
• “Take more risk…network more aggressively.” – Glenn Schiffman [41:33]
• “Uphill both ways. Barefoot walking on broken glass,” describing ERP migration. – Glenn Schiffman [42:33]

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Timestamps for Key Segments

| Segment | Timestamp | |-------------------------------------------------------|-------------| | Definition of IP monetization | 00:00–00:16 | | Fanatics partnership structure | 03:29–04:30 | | Key partnership clauses & philosophy | 09:17–10:06 | | KPIs & input metrics | 10:49–13:22 | | LTV, CAC, and cross-platform data | 17:11–21:10 | | AI, personalization, and operational efficiency | 21:10–22:51 | | Sales motion & margin profile differences | 23:01–24:06 | | Budgeting & revenue vs expense focus | 24:25–26:34 | | Capital allocation: starve losers, feed winners | 29:55–32:29 | | Balance sheet management & buybacks | 34:01–36:00 | | Negotiation story from Lehman Brothers days | 37:08–39:43 | | Lightning round (mistakes, advice, tech stack) | 40:03–44:33 |

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Final Takeaways

This episode offers a masterclass in world-class financial leadership at scale, emphasizing the priority of delighting fans, running a metric-driven business, and allocating capital for compounding returns. Glenn Schiffman's humility, risk perspective, and deeply pragmatic advice around negotiation, partnership, and technology migration make this a must-listen for any operator with financial responsibility.

Transcript

[CJ]

What does IP monetization really mean?

[Glenn Schiffman]

You know, monetization is a crude word. It focuses only on money. Money's the output, money's not the input. The input is helping brands and helping businesses delight their fans and bring them closer to the fans. And that's what we do.

[CJ]

Are there three to five clauses that make a partnership great?

[Glenn Schiffman]

If you have to rely on three to five clauses to make the partnership great, you don't have a great partnership.

[CJ]

I've heard you say before, and this is an amazing quote, starve your losers and feed your winners.

[Glenn Schiffman]

It's very simple. If something's not working, more money typically isn't going to make it work.

[CJ]

I'm curious how you run your annual budgeting process.

[Glenn Schiffman]

Focus on the infinite, which is revenue. Okay, versus the finite, which is expenses. I and every other CFO I'm sure loves to cut costs and loves to drive efficiency. But I will always focus on the infinite versus the finite.

[CJ]

Is this thing on?

[Glenn Schiffman]

Yesterday's price is not today's price.

[CJ]

Welcome back to Run the Numbers, the show where we talk the world's top CFOs and finance leaders. I'm CJ, a tech CFO, and my goal is to unpack the frameworks and operating principles that make you better at allocating capital and leading teams. On today's show, I'm speaking with Glenn Schiffman, courtesy of our mutual friends at the New York Stock Exchange. Glenn is the CFO of Fanatics, the global digital sports platform that sits at the center of sports commerce. They spin merchandise, collectibles and sports betting. 10 year old CJ is going nuts right now. Before joining Fanatics, Glenn spent more than two decades in investment banking, including a long stint at Lehman Brothers. He also was the CFO of IAC, the people behind Match.com, where he helped oversee one of the most prolific capital allocation engines in tech and media. In this episode we go deep on the economics of sports ip, how Glenn thinks about cac, LTV and capital allocation across the business's various verticals and negotiation lessons from Glenn's decades as a deal maker. I would not want to negotiate against Glenn. If you like this show, please remember to like and subscribe. It helps us with the algorithmic overlords. And if you're looking to hire the best finance and accounting talent, I would love to help you. I run a recruiting service that pairs you with thoughtful qualified candidates from a warm community of finance leaders. Type of people who just love net dollar retention. If that's of interest, shoot me an [e-mail] and we will talk onto today's episode with Glen Glenn. Thank you so much for joining me on the podcast today.

[Glenn Schiffman]

CJ Good to see you. Thanks for having me.

[CJ]

So you played football at Duke back in the day. Do you remember who made the jerseys back then?

[Glenn Schiffman]

So I got my Duke helmet behind me. It's not of course the one I use, but yes, I did play football at Duke. I'm a big supporter. But I have no idea who made those jersey. It was a different day back then. It was 1987, which ages me, of course. My freshman year, gosh, we didn't even get any swag. I mean the kids these days, the players these days, they get, you know, the game used jerseys, they get all of the gear, which of course, you know, fanatics makes in our partnership with Nike for about 25 colleges, including Duke, actually.

[CJ]

Oh, you got the Duke contract. That's amazing. I love it.

[Glenn Schiffman]

We do, we do. Through our partnership with Nike, you also

[CJ]

do Alabama and another whole host of high powered schools.

[Glenn Schiffman]

Yeah, our college business is multifaceted. For some colleges, we actually manufacture the fan gear, the jerseys in partnership with Nike that the fans wear the warm up gear, the sideline gear. With other colleges, we in our partnership with Barnes and Noble and Lids, manage the bookstore and the merch that's sold in the bookstore. We own the Champion brand for branded sports merchandise. So sell a lot of the Champion gear. Probably your first college sweatshirt was a Champion. They got that great reverse weave, thick Champion patented feel. So we do that. We power the websites for probably 65% of the Power 4. Used to be the Power 5, it's now the Power 4, but we Power the websites, which means it's University of Alabama sports, a fanatics experience. So again, it's a multifaceted relationship, you know. And we'll talk about this, I'm sure throughout the podcast, all to bring the fans closer to the teams, the athletes and the sports they love.

[CJ]

That's incredible. Well, while we're on the topic of colleges, this is a CFO podcast, but man, you've got an entrepreneurial streak to you as well. Do I have it right that you owned a number of businesses in college?

[Glenn Schiffman]

I did, I did, I did. I actually took a pay cut my senior year to come and work on Wall street, given how well we were we were doing back in the day.

[CJ]

Break it down for me. What type of businesses were these?

[Glenn Schiffman]

So I owned two businesses in partnership with, with others and then founded two businesses. So if two businesses I own. Don't laugh. You're going to laugh. One was a bar. It was a bar on campus. And the way we structured it was someone had owned it and a group of students bought it. And then we kept handing it down in generations. So when you graduate you sold it to someone else. So that was a lot of fun. I owned Duke's Guide to Durham. It was a blue pages. Think about a curated yellow pages. So in the spring we go out selling ads. And then the summer, you know, we, we, we made it. And then the fall, you know, in the 95 degrees plus we deliver, you know, the, the books to every person on the dorm. And then I founded two businesses actually. It was the, the predecessor, I should have patented this and then I would have been successful. The predecessor to Doordash, it was something called Student Delivery Systems. I went to the university and I said, hey, can this person, this, this off campus food provider use the point system? So it was the first time in America that off campus food could go on campus and you could use your meal plan. And so I got the concession to run the delivery and that was good. As that got rolling, I said, huh, there's, there's something to this. So graduated three and a half years, did a joint venture with that, that company. We created a new, a new company, Intercollegiate Food Systems, where we're going to do this concept throughout the country. And in fact we got on about six or seven campuses with this concept. As the summer came, we had some trouble getting financing. A and B, all my friends were going to Wall street and going to New York and the siren call of Wall street and the siren call of New York kind of pulled me. I ended up selling the B, the business back to my partner and all those businesses ended up selling. It was a good, good six month that my senior year where again, I took a pay cut to come to Wall Street.

[CJ]

There's a through line here because your career and all the businesses you've worked in, they, they deal with negotiations and partnerships. And I'm excited to talk to you today because it goes all the way back to your college stint as an entrepreneur where you were brokering these joint ventures and partnerships. And today at fanatics, you help partners monetize their IP and brands. This may be a silly question, but from a cfoc, what does IP monetization really mean?

[Glenn Schiffman]

Every business wants their brands to be pervasive, right? Every business wants their brands to be a household name. Every business wants their brands to be a 365 day experience. As I Said multifaceted. And we help them. And we help them. You know, monetization is a cruel word, right? A crude word. It thinks it focuses only on money. Money's the output, money's not the input. You know, the input is helping brands and helping businesses delight their fans and bring them closer to the F. That's what we do. If we delight our fans, we delight our partners. If we delight our partners, we delight our shareholders. But it's always in that order. It comes with the fans first, then our partners and then our shareholders.

[CJ]

I like how you framed it as monetization, as the output of a successful partnership because it feels like you're really selling much more. You're selling a virtual storefront, you're selling a supply chain, you're selling a verticalized way of doing business. Do I have that right?

[Glenn Schiffman]

It's Aldi. But again, like we have a thousand different partners at Fanatics. Unfortunately for our accounting team, they're all snowflakes. They're all different. And I guess our legal team as well. Unfortunately for a legal team, they're all different because they're tailored to, you know, the needs of our partners, the respectful of the nuances of what's going on in their business. So yes, we have a big in venue retail business. So we're in well over a hundred establishments inside stadiums. We run their in venue store. Some of the stuff in that store is some of the stuff we make. So in our commerce business, we manufacture 50% of what we sell in general. And then we also have a big e commerce D2C business. You go on fanatics.com or, you know, 900 different partner sites and you could again buy our gear or you could buy someone else's gear. So yeah, our partnerships are multi, multifaceted. And then again, we have a big trading cards business where we service the hobby shops, we service, you know, the big retailers and we service our customers in a D2C. So yes, it's a big business. Yes, it's multifaceted. It's all the above. It's all the above.

[CJ]

You mentioned that a lot of these deals are snowflakes. So I don't want to generalize here, but from an economic standpoint, as a cfo, are there three to five clauses that make a partnership great?

[Glenn Schiffman]

If you have to rely on three to five clauses to make the partnership great, you don't have a great partnership once the partnership is signed. And once you're in business, boy, it's a bad day. If you refer back to that agreement,

[CJ]

spoken like somebody who's been through a number of negotiations that have been successful, but also when you have to clean up something after the fact, I like that.

[Glenn Schiffman]

When you open up that agreement after the fact, what were we thinking? Why did we agree to that? Or why did they agree to that and was that intended or was that a drafting error or when you open up that agreement, it's usually the start of bad news, not good news.

[CJ]

As a first time cfo, I actually made that mistake once where I actually sent back the contract to the person and said that's actually not what it says in here. And he said like, hey, that's kind of like a BS thing to do. You're getting this debate off on the wrong foot by trying to say, look at these legal terms. So that, that definitely resonates with me.

[Glenn Schiffman]

Yeah, yeah, for sure.

[CJ]

Glenn, you've got a successful partnership that's ripping. Let's say it's with my New England Patriots. I've been buying a lot of stuff outside of Gillette Stadium. What are the KPIs that you look to to say? Wow, this relationship is great. And I know everybody wants revenue, but from an e commerce standpoint, is it looked at as how many SKUs are passing a certain threshold or what do you look at?

[Glenn Schiffman]

It depends on your business objective at the time. By the way, thank you for your business and please continue. We have a new fanatics app which is really an exciting thing for our fans. So you have free to play games on it. You've obviously on ramps into our shopping experience and you get more fan cash if you download our app. So I'd appreciate if you and your listeners buy all the stuff through our app and then I don't have to pay Google or Meta or chase you around the Internet and come and pay someone to get you on our platform. So please download the app next time you purchase your favorite, you know, Patriots gear. Getting back to your question on KPIs. Yes, look, revenue and profitability are the great equalizer. More important than profitability is free cash flow. Like free cash flow doesn't lie. Cash doesn't lie. So the most important thing, you know, from a CFO's perspective is the cash is the free is. Is free cash flow. But yes, they're top of the funnel metrics that, that you look, you, you look at, you know, number of users, number of new users. Right? Because there's. You can only, you can only sell so much to you, cj. Hopefully we can sell a lot. Hopefully you're one of our best customers. But at some point, you know, you run out of closet space or wallet share. One of the things that I watch is top of the funnel is net new people to file net new users. That's an important one for sure. And then transactions for sure. Average auto value for sure. One of the things we're focused on now is reducing the discounting and making the discounting more impactful to the to the individual, AKA having higher end merchandise. So I should be wearing at work like a Duke hoodie and you should be wearing a patriot's hoodie. And some of our merchandise is you know, super high end that you'd be proud to and desirous of wearing them to the office or wearing them on a podcast. So that's something we track is is is AOV and discounting attached to there. We of course, you know, track our margins and then we have a whole heap of operational metrics to make sure we're serving the fan better and better. And there we've done a really nice job over the last couple years of making the experience on fanatics just better. You know, the site's more cleaned up, the site's clear, our time to porch is coming down. Our perfect order rate is going up how many times customer service contacts going down. So you know, those are the raw metrics that power and come before the financials. So yes, it's cash at the end of the day, but there's a hundred things before cash that, that we monitor some of monitor some of the things I just articulated.

[CJ]

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[Glenn Schiffman]

That's exactly right.

[CJ]

Okay, so buy, bet, collect. I heard you say that before. How do you think about customer acquisition cost and lifetime value across those different monetization moments? Because you could have the same person, I'm sure you want the same person engaging across all three.

[Glenn Schiffman]

We've spent a lot of time and invested significantly on a single view of a fan. And that ain't easy. Some of the purchasers don't log in, so how do we find who they are? So we've invested a lot of money in the ability, the infrastructure, cleaning up our data, duping our data and understanding our our data. That's a hard lift and that's a condition precedent to what I'm about to talk about. And you don't see that anywhere on the P and L. But for expenses and expenses, by and large, you know, people don't love expenses. So like we've had the courage, a ton of companies have had the courage to make these hard investments here. One of the reasons we have is because, you know, I think I talked earlier about fan cash. You know our currency is sporting where you can earn and burn that fan cash throughout our platform. You know, so if you go into, you know, some in venue retail establishments that, that we run, you can earn and burn it. You can burn it in our lid stores, you can earn it, burn it on our sites and our thousand part or 900 partner sites, you can earn a burn of betting, you can earn a burning in our collectibles business. So that's a critical component of you know, driving that cross platform ltv. So getting back to your question, RLTV differs by business. You know, gaming it tends to be a little higher. What we find is our multi business customers. So customers that buy, bet and collect with us tend to spend 4.7 times as a single business customer. They repeat more, you know, one and a half to two times, they engage more and then therefore their lifetime value is significant more that multiplies. But the CAC is arithmetic. We are working on and AI has been a help to this on finding the next best offer for our customers understanding because all behind this, the data that I talked about, we have over 100 million people in our database with billions of attributes so we know your family size by and large giving, your gifting and purchasing behavior. We know when you purchase, we know what emails attract you, what emails don't. We know your patterns, we know you know, what your, your fandom is, knowing all that, harnessing the data, you know, AI is helping us with that, our fan cache is helping us with that. So we're trying to create the ecosystem where again with a stable, maybe slightly increasing cac, we have arithmetic CAC and multiplying ltv.

[CJ]

Do you think about one of those business units as top of the funnel for the other two or can you enter from any point?

[Glenn Schiffman]

It's a great, great question. The answer is yes. You can enter from all sorts of different spaces. By and large though, our commerce business is our biggest business. Over 20 million customers here, there's trading card buyers who come in to, you know, come into the funnel and then we, we can cross sell them across. And a lot of people in our, in our gaming business in terms of a new engine of growth, because collectibles was a new engine of growth, we built on the back of our commerce business and fanatics, betting and gaming, we built on the back of our commerce business. We have a new engine of growth coming which is super exciting and I think you'll like this as a Patriots fan. We're going to launch a credit card, a fanatics credit card. So we think this could have real interesting top of the funnel implications for us in terms of getting net new people to the file and a new go to market motion. So we're super excited about that. And one of the things we're, we're playing around with, if you pick the four champions, NHL, NBA, NFL and mld, we'll pay your credit card bill for a year subject to of course a slight, a slight cap to make sure we don't blow up the balance sheet. But that will be super fun. So think about the energy in the world that happens in March, Magnus, when everyone's trying to pick a perfect bracket. We'll get that energy every year.

[CJ]

Glenn, you mentioned that AI is making it easier to dedupe the data, to homogenize the data and to meet customers where they want to transact. And I think it was brilliant the way you explained it because I heard an analog to Amazon, where you may go to Amazon when you're moving from one house to another and you order cardboard boxes and those really annoying styrofoam things that the kids get everywhere from those boxes. Now Amazon then says based on other purchasing patterns, we also Think that you want to buy a smoke alarm and that's just because it's looking at the SKUs and it's matching up what other skus people buy. But it has no idea that this person is moving. So what's interesting is AI can now get the full story of the intent behind some of these actions. I think rather than just saying, hey, the next likely skew in this deterministic function or, or probabilistic forecasts is this one here. So there's something to be said about how your business can better meet fans where they want to transact and maybe it's around a compelling event like a sports game.

[Glenn Schiffman]

You said it. Well. We are using AI to help us dissect the data, understand the data. Technology is moving fast. Corporate America is embracing it. Every day there's another aha moment around technology. And look, there's always a sloping up and to the right in technology. Now the slope is vertical in terms of how fast technology is changing. And yeah, we're harnessing it obviously to help us on the expense line and get efficient and more exciting stuff is on the revenue line making our products better, making our go to market motion cleaner and more efficient and more attractive.

[CJ]

On go to market motions you have a direct to consumer collectibles business versus the core commerce business. How does that sales motion show up differently on the P and L? Glenn?

[Glenn Schiffman]

We have a D2C business in commerce and collectibles. We have a wholesale business in commerce and collectibles and we have a retail business as well. The margin profile is different. The expenses associated therewith are different. By and large, we want to meet the customers where they are and if they go into a dick store, great. We'll sell them one of our exclusive jerseys and dick stores in the Dick's Morning Good store is a great partner of ours. If they want to go on our site, wonderful. We'll sell them, you know, the jersey that we exclusively make in our partnership with nike on our fanatics.com if they want to go on NFL shop.com Dallas Cowboys of Fanatics experience and want to buy it. Right. We'll sell them that, that same jersey. So we just want to go where, where the fans are and you know, the P and L, the P and L follows and again there's different margin structures in our wholesale business. Obviously we, we deliver it to one person, to our partners and then they have marketing obviously and they have their own expense line to get you in the store and to get you out of the store with the merch.

[CJ]

I'm curious how you run your annual budgeting process. And you can correct me, maybe it's quarterly more so than annual, but that must take a lot of work and foresight with those different line items and margin profiles to get the most out of each of these while also taking advantage of the wonderful shared resources that you have as a company.

[Glenn Schiffman]

We could do a seven hour podcast on that if you'd like. No, I wouldn't like that. So let's not do that. Yeah, look, it's an evolved process. Our business is a little more predictable than most. Our contracts are very long term with our league partners and our team partners and our players association and our player partners because the longer term those contracts are, the more we can invest in the fan experience and more we can invest against the outcomes that we and our partners want. So that creates a predictability in our business. That's 1, 2 in our business. Sports, you know, is also, while the results are unpredictable, I know there's going to be a Super Bowl MVP every year, right? I know there's going to be a Super bowl winner every year. So that gives us a certain predictability and a baseline of rev recurring revenue. Also, a lot of sports fans are die hard sports fans. So, you know, 2/3 revenue in my commerce business, greater than 2/3 is from repeat visitors from you who bought last year. And you know what you're going to do this year? You're going to buy again because you're going to be excited about the Patriots run. So that gives us a little bit of a predictability. So look, we give a lot of autonomy to the businesses. They start on the budgeting process. We want them to control all their inputs to be successful. Right. And there are certain shared services and there are certain things that the corporate function, which by and large I run, provide for the businesses. That helps efficiency, of course, and that helps, you know, that pan fanatics cross platform thesis of, you know, the next best off offer to the fan. But I will always focus on the infinite, which is revenue, okay. Versus the finite, which is expenses. Right? Like I can't cut my way to revenue growth. Okay? So like I will always push, you know, revenue growth, which is infinite. I and every other CFO I'm sure, you know, loves to cut costs and loves to drive efficiency. And we will, and we do. But I will always focus on the infinite versus the finite.

[CJ]

So. Well said. Hey, thanks for listening. We'll be right back after a word from our sponsors. Being a cfo, you know how much I love tools that actually make the lives of accounting and finance folks easier. One of my favorite tools right now is Rilit the AI Native erp Going head to head with Netsuite. Yes, someone is finally doing it. I met Rillet two years ago when they were still in stealth. Since then, they've absolutely taken the finance world by storm. Their mission is to make the zero day close a reality. And they're actually doing it. Customers are literally closing their books at 1:35pm on the first day of the month. They've got everything you need to scale your business. Complex revenue recognition, native integrations, custom reporting, multi entity close management, and much more. They're only a few years in and are already supporting NASDAQ publicly listed company companies. Yes. Seriously, if you want to scale your business on an ERP that wasn't built in the 90s, you need to check out. Really Book a [e-mail] cj oh cool, that's me. That's R-I L-L-E-T.com cj R-I L-L- E-T.com cj Tell him I sent you there. Scalia Tech Company is thrilling. It's also really, really messy. Just ask anyone who's done it or anyone who's tried. Better yet, ask ey. They've seen startups at their best and in their most fragile moments. EY knows you don't start a company to burn cycles on regulatory hoops, discounted cash flows, or the fine print of SEC Form S1. Although you probably do know I love myself a good S1. If you've listened to or read my stuff following, you can't ignore these these things. That's how risk compounds kind of like negative interest. What you can do is work with EY from day one. They'll help you get it right early and often so you can stay in builder mode and keep the trains running on time. EY shape the future with confidence. Learn more at ey.com tech startups that is ey.com techstartups Let me ask you something. If your board wants financials, would you be certain you're not wasting money on SaaS? Or if a major renewal hits, would you know if you're paying a fair price? Your vendors would see thousands of deals per year, but most finance and procurement teams see one deal at a time. That's a tough way to negotiate. Spendhound fixes that intelligence gap. It's one place to track all your software spend and gives you pricing benchmarks across more than 10,000 SaaS and AI vendors and it's based on real spend data from over a thousand companies. SpendHound connects to your financial systems and shows every software dollar you're spending. Contracts, renewal dates, overlapping tools, nothing quietly auto renews. And you don't pay twice for duplicate tools. Spenhound is the number one rated SaaS spend management platform on G2. It's trusted by teams at ZoomInfo, Hootsuite and Kit Free Forever. Wow. For SMB and only 10,000 per year for enterprise with 100, 150,000 savings guarantee. If you want to stop negotiating blind, go to spendhound.com that is spendhound.com trusted by over 1000 finance option procurement teams. I've heard you say before, and this is an amazing quote, starve your losers and feed your winners. Can you break that one down for me?

[Glenn Schiffman]

It's very simple. Like if something's not working, more money typically isn't going to make it work. The reason why you starve it is because they got to figure something out. That business or that division or, you know, that opportunity needs to figure it out, you have something wrong. So typically money is not going to solve your problem because it gets back to the conversation we had earlier on the leading indicators, right? So like if you're losing money, that's okay. If those leading indicators, right, the KPIs we talked about earlier, if those KPIs are working and then that's how you determine if they're winning. And if they're winning in the KPIs and the raw metrics that underlie and drive the financial performance, then you feed that, you know, you invest in those KPIs. But if they're losing, yeah, you starve them and you force them to figure it out. It's probably one business we had at fanatics that, you know, we funded, it just wasn't, wasn't working. We starved it for resources. They couldn't figure out unit economics that made any sense. And we ended up, you know, cutting off the capital and ultimately selling it. Luckily, the tax structure in this country allows you to deduct those losses because they're expenses and expenses offset revenue. So the government was our partner and said loss as it is in all expenses. So it softens the blow a little bit. And then look, we like to invest capital. With that capital we get increasing returns and that's what we need by feeding our winners. Okay, like you invest in the stock market, right? Or wherever you invest your personal money and all your listeners invest their personal Money like things that give you good returns and you have the prospect of more returns with more capital. Sign me up. Right. That's where every stock you buy, every investment you make is in desire of, in furtherance of investing more money and getting more capital back, increasing returns. So that's the way we think about it in our business, you know, our gaming business. We have made and are making a significant investment in that business because we're seeing the returns. We're almost doubling marketing this year, okay? Because we're seeing those returns and it's winning. So we're feeding that winners, those winners in collectibles. We've made a bunch of acquisitions, you know, because we're seeing the capital that we can put into acquisitions, moving our returns nicely up into the right. You want to invest where that more capital gets increasing returns. It's the holy grail of investing.

[CJ]

It sounds like you're looking for capital to compound over time. It's not like you're searching for a linear or a seasonal bet on something you're trying to make it compound.

[Glenn Schiffman]

That is the magic of finance. Yes. Your revenue grows. Given the magic of scale, your EBITDA grows faster.

[CJ]

Okay?

[Glenn Schiffman]

And given the magic of more efficient use of that capital, free cash flow grows even faster. That's how we try and think about our fanatics. P and L revenue will grow well north of double digits. EBITDA will grow even faster, free cash flow will go even faster. And then that's only half the capital allocation. Then you have to think about your balance sheet and your balance sheet. If you manage that intelligently, with the appropriate use of debt, the appropriate timing of issuing equity, the appropriate timing of buying back stock, you could actually amplify your shareholders returns and amplify the returns that are started to be generated by your operators. So your operators drive the financial performance and then the cfo, the board, the CEO should help manage a balance sheet that accelerates that operating returns to get the even better financial returns for the shareholders.

[CJ]

I'm so glad you brought that up because at IAC Glenn, you bought back more than half your shares. What signals told you buybacks were the best risk adjusted bet.

[Glenn Schiffman]

I don't think it was actually half, but we did a lot. We did a lot. We looked at the stock for, for a long time was undervalued. We had a big M and a team that looked at buying businesses. And I think in my five years we had about over 50 transactions in five years, acquisitions, investments and whatnot. So we were active and wanted to, you know, Buy businesses that we could scale and grow. But at the same time we looked at our share price and we thought on a risk adjusted basis, the best returns to our shareholders. We're buying back stock. And by the way, there's no acquisition risk in that by and large, you know, you have an informational advantage. You don't necessarily have to do diligence on your own business. Every acquisition you make, there's surprises because in acquisitions there's an information asymmetry. The seller has all the information, the buyer has none. Due diligence tends to, tries, doesn't tend to. It tries to narrow that gap and narrow that information asymmetry. But it doesn't always do it. But when you buy your own stock back, it's an asset, you know, well, there's no integration risk, there's no M and A risk and you know, you have a point of view on your business. At Fanatics we're also buying back, buying back some stock at good prices when we can, given, you know, our free cash flow, free cash flow position. It's an important part. Again, as we talked about what, five minutes ago or so, the working of the balance sheet is as important as the working of the business. Now again, you can't work your balance sheet when you have a bad business. So you need the good business and the business is more, you know, the ultraling results, you know, drive it. But you have to be thinking about your balance sheet, working your balance sheet as aggressively as your operating results. And at IC we did that and we had a hell of a run.

[CJ]

Would it be fair to say that finance leaders, when they start out, they work their P and L right, they, they work the operations to get the most out of it. But you have to mature in your role and to be really good at working the balance sheet to also incorporate the cap table into that capital allocation strategy.

[Glenn Schiffman]

It depends on the person. You know, like I was a first time CFO in 2016 at IEC. They took some risks on me. I was a former other banker. I'm forever grateful for that. Given I was a banker, I probably approached it more with a, you know, a capital lens, a M and a lens and you know, a financial, you know, engineering lens. I went the opposite way. So I started there and then I learned the operations and I had some, we had some great people, you know, at IAC who taught me a lot, some of which have left IC and subsequently come over to work at Fanatics with me. So I was kind of the reverse. So it just depends on your career Journey. So the financial capital, raise the ir, the financial engineering aspect of the business kind of came second nature to me because, you know, I was a banker starting.

[CJ]

So like you said, you spent 25 years as an investment banker. You did a ton of deals, billions of dollars of deals. But I want to go back to the very first one that you negotiated on your own at Lehman Brothers. Do you remember that deal?

[Glenn Schiffman]

I remember it like it was yesterday, 1995. We were selling a cable company, Sammons Communications. It turned out to be a billion eight deal. We tried to sell it as one. It got broken into two. We finally decided to split the assets in two. We had a handshake on the deal and then we're going to the lawyer's office. Back then you actually negotiated in person. It was great. Now like, it's all this zoom crap and this emailing stuff. We actually went to, went to, you know, a conference room. So I walk into my managing director's office. She was my mentor, you know, wonderful, wonderful lady. And I was like, all right, I just ordered a car, let's go. She said, I'm going to dinner, I got plans. You're doing it. Good luck. You know, don't bleep it up. So it was me and the general counsel from the company and it was a consortium on the other side. So they had and private equity folks and there are two of us against like 15 of them. And, you know, we had a fun night. We had a fun night.

[CJ]

There's a lesson in this deal too, about how long you kind of dribbled out the clock isn't there?

[Glenn Schiffman]

You've heard me tell this story. So basically I was a second year associate at the time, whatever. I was 95. What was I, 26, 27 years old. We worked hard back then and people work hard now. But like that night, I was pulling an all nighter anyway. So I was either going to be in this conference room negotiating this deal, or I was pulling back to the office and working on a spreadsheet and pulling an all nighter. So I said to the general counsel, this is like, you know, the other side. It was the CEO of the business and all the other stuff. I'm not sure they can outlast us. And I can guarantee you they won't outlast me. We had a little competition, you know, going, which is always helpful in negotiations. So they were pretty anxious. So I was like, you know, what was his name?

[CJ]

John.

[Glenn Schiffman]

I think his name was John. I was like, john, all right, just, let's, let's just listen and keep saying, I'm not sure, I don't know. And literally we spent the whole entire night. And when like 8 o' clock or 9 o' clock came by and they ordered pizza and they made it like a thing, then I knew we got them because, like, then they were in my territory, not in their territory. So we just, we, we just squeezed them all night long and just, oh, shucks, I don't know, you know, that doesn't make sense, you know, and we're able to increase the purchase price, you know, a fair amount. Just understanding the dynamics, understanding the motivations. Deals tend to not age well, so you kind of want to get them done. I knew if we were agreeing at 8pm or 8am, 8am would have been the better outcome for our shareholders. And we, yeah, we had some fun then.

[CJ]

There's a kernel of truth in there about knowing who you're dealing with in any negotiation, knowing their motivations.

[Glenn Schiffman]

You know, are they the decision makers? What truly do they care about? The old joke, you have two ears and you have one mouth. A counterparty will tell you how they want to negotiate it. You just got to listen, ask questions and listen.

[CJ]

Glenn, I'm going to take you into what we call our long ass lightning round. So the first question I ask to every successful CFO who comes on the show is, give me an example of something you've screwed up on the job before. It could be here or any previous role.

[Glenn Schiffman]

I mean, this gets back to what I said earlier. We could spend seven hours on a podcast doing that. Just recently, the other day, you know, we were talking to and having a negotiation with a partner and it was a small deal for us. Afterwards, they thought I truly didn't give a crap about their project and their deal. And even though it was a small deal, it's a critical partner to us. So I screwed that up. I didn't pay enough respect, I didn't pay enough attention. I didn't lean into it as much as that partner wanted. Got some feedback and then I had to clean it up, tell that partner that, you know, we're all in, because that was something that was important to them. And I didn't listen enough, I didn't perceive enough, I didn't understand enough how important that was to them. So they viewed me as too cavalier. And I was. But the first thing, once I heard that feedback, I stalked him on the phone and made it right.

[CJ]

That's such great advice because you never know how big of a deal it is to the Other party. And you have to appreciate that. And that's something I've messed up in my career too, Glenn, where I was like, oh, this is only our 20th biggest partner. I'm like, they're spending 50% of their marketing budget with you. Like, you have to recognize that. Next one I got for you. If you could tell your younger self something, knowing what you know today, what would you tell them?

[Glenn Schiffman]

One, take more risk. When I was brought up or whatever reason, financially career wise, I probably didn't take as much risk as I would suggest someone else taking. I was a little more conservative. Again, how I managed my money and my career, that would, that would be one and then two, more aggressively network, you know, like I, I've been so fortunate to have worked with so many people, have so many relationships. You know, when you work at an investment bank, you have so many incredible clients. A lot of those clients have become friends. And I probably didn't work the networking thing as well as I should have. So those are two pieces of advice I give to anyone who cares to listen to me.

[CJ]

Do you tell your kids to take more risks?

[Glenn Schiffman]

I do, but again, like, sometimes they listen, sometimes they don't. But yeah, it's got to be. The person's got to be comfortable now, look, they have a easier time taking risks. You know, given, you know, the success that, you know, that I've enjoyed, they could take more liberties.

[CJ]

Next one is more of a technical one. Can you walk me through your finance software stack? What tools does your team lean on to get the job done?

[Glenn Schiffman]

Boy, that's the most boring question anyone has ever asked anyone on the history of a podcast. I guess it's relevant to your users. So we did a big Oracle transformation on Oracle Fusion. So this has been uphill both ways. Barefoot walking on broken glass. In terms of this implementation, we did it on hr, on erp, epm, all erp, epm, hcm. Yeah. So all facets of the business, multi year, ton of money, ton of time. But we now have the entire company on one HR stack, you know, one financial software stack. And the ERP is continuing. We're kind of the worst is behind us. So that's been kind of the big project and now, you know, we have a lot of point solutions. The system of record is, is Oracle Fusion.

[CJ]

What's the craziest thing you've ever had someone try to expense?

[Glenn Schiffman]

I don't know.

[CJ]

Even investment banking days. Can't think of something that came across your past?

[Glenn Schiffman]

I don't think I ever appro. I don't think I approved expenses in investment bank. I think it went through the. The bureaucracy at fanatics. I only approve, you know, Michael's, the CEO's expenses.

[CJ]

So.

[Glenn Schiffman]

No, we're, we're mature adults. I don't know if I've seen anything crazy. You know, one of my partners at Lehman, he had this great memo that he put framed and put on his wall. There was like this $5,000 expense that was being rejected because he was one penny or two pennies over, you know, some, you know, per diem or something. So that's. That was always a funny thing when I walked in his office that, you know, he violated the expense policy by one penny or two pennies. So they rejected the entire, you know, 5,000 expenses.

[CJ]

Glenn, this has been an absolute blast. Thanks for coming on the podcast.

[Glenn Schiffman]

You've met cj, Great seeing you, and hopefully we'll run into each other soon.

[CJ]

The Numbers is a mostly media production. Yelling an intro by Fat Joe. Artwork by Meg d'. Alessandro. Show is executive produced by Ben Hillman. Nothing said on this podcast is intended to be business or investment advice. It's the sole opinion of me. A guy who feeds his dog way too much ice cream and has a history of net operating losses. Lol. If you like this podcast, hit subscribe and give us five stars. It will take like two seconds and our algorithm overlords love it. Drink water, call your mom, and have a great day.

[Glenn Schiffman]

Peace.