News that MLB and the MLB Players Association will not renew its contracts with Topps and has instead struck a deal with Fanatics to produce baseball cards sent shockwaves through the sports collectible industry.
The popular Topps brand has produced baseball cards for 70 years and has been synonymous with trading cards.
Though it has been known primarily for baseball cards, Topps has expanded over the years to produce all sorts of trading cards, from soccer to WWE, F1 and celebrities.
It has been primarily known, however, as the hobby’s top producer of baseball cards with licensing agreements with MLB and the MLBPA. Those deals will end, however, in 2025 and 2022, respectively. The Topps contract with MLB allowed the company to use MLB and team logos on its cards, while the MLBPA deal gave Topps the rights to use the images and likeness of players.
The move comes at a terrible time for Topps, which was on the verge of taking the company public in a $1.3 billion merger with Mudrick Capital. That deal was abruptly cancelled on Friday, casting the future of the company in doubt. According to Yahoo Sports, the merger was based in part on the Topps contracts with MLB and MLBPA and could lead to legal action.
On top of the staggering news came word that Fanatics, the nation’s top producer of sports apparel and merchandise, is also acquiring the rights to produce NFL and NBA trading cards — rights currently held by Panini.
On Wednesday, ESPN reported that Fanatics has signed a 20-year deal with the NFL Players Association to produce NFL trading cards.
The deals mean that in just a few years, Fanatics, an $18 billion company owned by Michael Rubin, will own the rights to produce sports cards for MLB, NFL and NBA, giving it a virtual monopoly in the trading card industry. Fanatics has yet to comment on any of the reported deals.
According to The New York Times, The Washington Post and other media outlets, MLB, NFL and NBA will each own a stake in Fanatics’ trading card business, with seats on the company’s board.
According to The Washington Post, MLBPA head Tony Clark sent a memo to players saying the Fanatics contract would bring about 10 times more money to the players — a deal it said Topps could not match. Topps reportedly paid the MLBPA $20.4 million in 2020, an increase of $1.6 million over 2019.
Though the deals will mean more money for the players and players associations, the moves are troubling for the sport collectible industry, which has enjoyed a historic boom thanks in part to products produced by Topps and Panini. With the sport leagues now owning a stake in the lone trading card company, it will have more control over what products are produced, how many and how they are distributed — control that is not likely to go over well with collectors.
Even more troubling is that Topps was reportedly blindsided by the news and not given an opportunity to make a counter offer. According to Andy Redman, executive chairman of Topps, it was never notified by MLB or the MLBPA that it was negotiating with Fanatics, a bad-faith move that angered Topps executives.
“Not only were we unaware that Major League Baseball was negotiating with anybody other than Topps regarding our rights beyond 2025, but Topps was told on Thursday by Noah Garden, the league’s chief revenue officer, that a deal was completed, finalized and exclusive with Fanatics.”
Redman also said Topps executives had two one-hour meetings with the MLB Players Association on July 13 at the MLB All-Star game and was given no indication that the union was negotiating with other companies.
According to The Washington Post, Topps CEO Michael Eisner had an unpleasant conversation with MLB Commissioner Rob Manfred.
Representatives for MLB and the MLBPA have not made any statements or comments about the Fanatics deals.
Topps, which enjoyed sales of $567 million in 2020, was acquired in 2007 by Tornante, an investment firm owned by Walt Disney Company chief Michael Eisner, and private equity firm Madison Dearborn for $385 million.
Fanatics has been moving toward the sports collectible industry since June, when it ventured into NFTs with a digital collectible firm called Candy Digital.
While Fanatics is expected to create a new trading card company, it is possible it could acquire Topps and/or Panini and Upper Deck, which owns the right to NHL cards. Fanatics made a similar move when he won the rights to produce major league uniforms, acquiring apparel company Majestic.