Sports Collectors

Fanatics in Deals to Take Over Trading Card Licenses in Multiple Sports; Topps Merger Deal Dead

Multiple media outlets reported Thursday that Fanatics, the sports retail and memorabilia giant, is creating a new division that will partner with the players’ associations in multiple sports to take over control of trading cards.  

The Wall Street Journal reported that deals between Fanatics and the MLB, NFL and NBA players unions and Fanatics were essentially complete.  The Journal quoted a memo to players from MLBPA executive director Tony Clark.

According to the Journal’s report, all three  players unions will have equity stakes in the new venture.  Two years ago, the NFLPA and MLBPA worked to create One Team Partners, an organization tasked with increasing license rights and profits.  That appears to have been part of the genesis for Thursday’s news.

The first agreement to be reported Thursday was Fanatics’ move into baseball cards, ending the status quo for Topps, which first began producing cards in 1951 and is celebrating its 70th anniversary.  Whether that brand name is worthy enough to stay alive somehow under the changing landscape remains to be seen.  

Sportico reported that while Topps holds the MLB license through 2025, Fanatics would be partnering with the league and its players on a deal that would include equity in a joint venture “as well as a possible portion of secondary market sales.”  Exactly what that could entail is not yet known.  In the deal, Fanatics would gain a players’ license to produce cards as early as 2023 but couldn’t use league trademarks until two years later, unless something changes.

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Sportico and The Action Network both reported that StockX founder Josh Luber would head up Fanatics’ new trading card venture.

Fanatics has become a super power in the sports world, operating a variety of businesses across the landscape including fan apparel, exclusive autograph deals with well-known athletes, sports betting and other ventures.  The company is now worth $18 billion, according to the WSJ and has been seeking to expand its footprint even further into the fast rising collectibles space.

Topps has been awaiting approval to take the company public through a merger agreement with Mudrick Capital but that deal is now dead, with both entities confirming that  its SPAC merger with Topps “has been terminated by mutual agreement” after MLB’s reported deal with Fanatics.   

“The Topps Company today announced the termination of its merger agreement with Mudrick Capital Acquisition Corporation II by mutual agreement and that it will remain a private company,” Topps stated Friday.  “Topps expects to be able to produce substantially all its current licensed baseball products through 2025, pursuant to its existing agreements, and will build on the exceptional performance in the second quarter of 2021 in its Sports & Entertainment segment, and its Confections segment.”

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Even if MLB would prefer to continue its long running and tradition-fused relationship with Topps, Fanatics’ deep pockets could undoubtedly put significantly more money into the coffers of the league and its players.  Some analysts now speculate that Fanatics may attempt to purchase Topps.

Panini America currently holds NFL and NBA trading card contracts with the leagues and their players as well as an MLBPA license.  

The NFL has not yet agreed to participate in the new deal, but the Journal reported that could change.  

The Journal reported that Clark’s memo included instructions to players to continue honoring the existing obligations they may have with Topps and Panini until the Fanatics deal takes hold in 2023.

MLB, the NFL, NFLPA and Major League Soccer all have equity stakes in Fanatics, which also has ecommerce and manufacturing rights associated with Formula One racing.

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