Fanatics Executive Chairman, Michael Rubin, joins Yahoo Finance's Jen Rogers, Dan Roberts, and Andy Serwer to discuss how the company has halted the production of MLB player jerseys and is using that same jersey fabric to produce masks and hospital gowns.

Video Transcript

JEN ROGERS: Michael Rubin is Fanatics executive chairman. And Major League Baseball and Fanatics have halted the production of MLB player jerseys, and now you're going to masks and hospital gowns. Can you tell us how quickly this is going to happen and what the scope of this project is?

MICHAEL RUBIN: Yeah, it's already-- first of all, how are you doing? Good to speak to you today.

It's already happened. We started making masks and gowns last Tuesday.

I was watching the news, which I have really never watched until this epidemic, till this pandemic happened. I guess, you know, a few weeks ago, with no live sports, I've been glued to the news.

And when we saw how much of a problem people were having just getting the required, you know, PPE that they needed, we thought, you know, could we use the apparel manufacturing facility that we have that makes all the baseball jerseys to make masks and gowns?

We reached out to our team, and they said, hey, let us do a little bit of work. And after another hospital reached out to [INAUDIBLE] a few days later, we found that we actually could take the fabrics that we actually make the official baseball jerseys that everybody wears, and take the same fabrics and the same people that make the jerseys and actually use those to make masks and gowns.

So we started that last Tuesday and began shipping them to hospitals late last week.

DAN ROBERTS: Michael, Dan Roberts here. Thanks for coming back on. Obviously--

MICHAEL RUBIN: How you doing, Dan?

DAN ROBERTS: [INAUDIBLE] and doing what you guys are doing is a lot more important now than sports, and sports are halted. But it's an interesting part of this, that you are halting your production of the MLB jerseys to make these masks. And obviously, baseball, you know, hasn't yet started its season. Who knows when it will start.

But let me ask you, you know, to kind of zoom out and tell us how coronavirus is affecting Fanatics the business. Because you guys, you know, all of our viewers may not necessarily know, are the authorized licensor and the maker of the official jerseys, for not just MLB, but NBA, NFL, all the big leagues. And obviously right now, no sports.

So what is the outlook right now for Fanatics if the sports leagues don't start their seasons relatively soon?

MICHAEL RUBIN: Yeah, well, we are-- as you said, we're the largest retailer in the world of licensed sports merchandise, and we actually don't play sports right now. And so that's a pretty bad ingredient for near-term business.

You know, there's three components of our business. We operate about 50 venues at different stadiums. That business is down 100%.

We operate a wholesale business where we supply lots of brick and mortar retailers and the different teams at their stadiums. That business has been running down 100% since this has really started.

And then our e-commerce business is running down about 20% or 30%, which it had been running up 20%. So all in all, glass half full is, you know, there's still lots of customers buying licensed sports products from their favorite teams at maybe a 40% lower rate than they would've been buying it from.

Glass half empty is, you know, a quarter of our business is down 100%, and three quarters of our business is down, you know, 30%, 40% from the rate that it had been running.

But look, at the end of the day, you know, the thing we've been most focused on is, how can we help? And we have 7,000 employees at Fanatics that, you know, I think feel a responsibility to try to help make a difference in any way, shape, or form that we can.

And the idea of taking the baseball factory, the only domestic apparel manufacturing that we have, and using it to convert it to basically-- halt the production of jerseys and make masks and gowns is something that we were really excited by.

So I can tell you, certainly as a company, we have a lot of extra capacity right now. And to be able to use it to make masks and gowns in our only domestic apparel manufacturing facility, we were we were definitely excited to do.

ANDY SERWER: Hey, Michael. Andy Serwer here. Nice to talk to you.

MICHAEL RUBIN: Andy, good seeing you, my friend.

ANDY SERWER: Hey. So Dan Roberts is going to be bummed out, because you know, you're already selling those new Brady jerseys, never mind the Stefon Diggs ones. But I love the fact that you guys are keeping up on the trades when things get back up going.

So let me ask you about this endeavor, though, the masks and the gowns and the stuff. Do you coordinate with the White House and/or with other companies when you do this? Or is this something that like, Michael Rubin just goes, boom, I'm doing this?

MICHAEL RUBIN: You look like you had a good question coming out. Ah, I think you're hopefully you're about to unfreeze on me.

ANDY SERWER: Oh, was I frozen on you? OK, let me--

MICHAEL RUBIN: Yeah, you froze. Sorry. [INAUDIBLE] Now we're back.

ANDY SERWER: I thought you were really thinking for a long time about this.

MICHAEL RUBIN: No, no, no. I mean, sometimes I'm deep in thought, but never [? to that-- ?]

ANDY SERWER: I know, like, you're like this. You're like The Thinker, Michael. I know that you--

MICHAEL RUBIN: Yeah. So what I heard from you is, are we coordinating with the White House.

So how this really came about is, I was watching CNN two weeks ago, Tuesday night, Wednesday morning. Woke up in the middle of the night with this idea. Went out to my guys, said hey, could we take this same equipment that we make jerseys with, and could we, you know, make masks and gowns?

And after a few days of work, they worked for St. Luke's Hospital, which is a local hospital. And then that weekend, the governor of Pennsylvania, Tom Wolf, and the attorney general, Josh Shapiro, each reached out to me and said, hey, they heard we were having conversations with St. Luke's hospital, this was something really important, could we do it.

So our coordination has really been with the state of Pennsylvania and with St. Luke's Hospital in Pennsylvania. And so that's really how we coordinated.

And we're really first working on doing this in Pennsylvania and then some of the neighboring states, New Jersey and New York.

ANDY SERWER: And a quick followup, are you having any issues with supply chain and supply chains in terms of getting the materials?

MICHAEL RUBIN: Well, we would have an issue if we weren't using them-- but we're actually using the same material that we make the baseball jerseys.

So the reason this came to fruition so quickly is, woke up in the middle of the night and said, hey, we've got this apparel manufacturing facility that makes jerseys. Once our team said they could do it in both Pennsylvania and local hospital wants to do it, I reached out to the commissioner of baseball, Rob Manfred, and said, look, what do you think about halting the production of baseball jerseys, using the same fabric that we make jerseys from, the same people that make the jerseys, and making masks and gowns?

So we essentially had both the organization and the fabrics there in place. Now these are non-surgical masks. These are-- you know, we're producing these to be used for one use only.

But you know, the position that a lot of hospitals are in, what we heard from all the people that were calling us is, they had nothing. So the ability to get something very quickly with immediate production was something that was very important.

So we literally-- we came up with a idea on a Wednesday morning. We were testing and designing with the state of Pennsylvania and with St. Luke's Hospital by that weekend, and we were producing by the following Tuesday. So from idea to production was six days.

DAN ROBERTS: Hey, Mike. Well, we haven't mentioned yet that you are also, of course, a co-owner of the 76ers. And so when we talk about making the masks from the MLB materials, I know you had to deal with MLB commissioner, Rob Manfred, to do that and tweet it out, kind of crediting his cooperation.

Now on the NBA aside, Adam Silver has received some kind of praise and plaudits for having moved so quickly to temporarily shut down the NBA season. A lot of people now look back in hindsight [? and say, ?] that was really the first domino. NBA suspended its season, and that motivated everyone else, not just sports, but other live events to do the same.

Give us a sense of what you're hearing from the different commissioners. I know you really have to deal with all of them in a business sense from Fanatics' point of view. But then as an NBA co-owner, what's the timeline here? What are you hearing from other NBA team owners as well in terms of any optimism?

MICHAEL RUBIN: Yeah, look, to your point, from a day job, for Fanatics, I certainly talk to many of the commissioners, you know, on a weekly basis and certainly, you know, dozens plus owners. That's a normal week in the life of Fanatics.

I think everyone's focused on the same thing, which is we realize that America wants sports. As soon as we can do it on a way that's healthy and safe for our players, and then at the time when fans are there, whether it's day one or whenever it makes sense for fans to be there, to do it on a healthy and safe basis for our fans.

So I think we're all anxious. I think the world, the country is anxious to bring back sports as soon as we can do it in a healthy and safe way.

I don't think-- you know, I think that's the balance you need to get. We need to do it the right way.

So when I speak to owners, when I speak to commissioners, you hear the same thing, which is, we've got our organizations working incredibly hard, 24/7, on bringing back sports as soon as they can do it in a healthy and safe way for our players and, ultimately, our fans.

JEN ROGERS: Michael Rubin, from Fanatics. We are all eager to get sports back, so we can be cheering for our home team. Really great to get the chance to talk with you about the projects that you're doing with the masks and the PPE as well. Good luck with that.

MICHAEL RUBIN: Thanks so much.