It will be up to the existing sports card companies to be creative, be allies and redefine themselves.
That was just one of the themes expressed by one of the hobby’s independent trading card makers in the wake of the bombshell news that Fanatics was working on deals to acquire the bulk of the licensed sports card manufacturing business.
Leaf Trading Cards CEO Brian Gray, whose small company designs and creates trading card products without a major league license, discussed the situation in the industry on the Sports Cards Live internet show Sunday night.
“It was a jaw drop,” Gray said of reports that surfaced late last week indicating Fanatics was in the process of locking up league and union licenses in at least three major sports. Topps has already admitted its deal with MLB and its players would be coming to an end. “I was shocked,” Gray said. “Nobody knew this was coming.”
Gray said he had sensed that Fanatics wanted to play a larger role in the rapidly growing sports card market. He had no idea that their move would be made so aggressively and so quickly.
“I had a feeling that Fanatics was trying to take a piece of (the sports cards market). I even warned one of my competitors about it. That competitor laughed me off and then called me Thursday and said ‘you are a genius.’ It was almost one of those days where you think you’ve seen it all… it’s like where is the next bomb going to drop.”
The Fanatics deal would make them the exclusive licensee for Major League Baseball cards, and according to The Athletic, they also have deals in place with the NBA and its Players Association. The NBA and NBAPA deal with Panini expires in 2025, while the NFL and NFL Players Inc. deal with Panini expires in 2026. The current deal between Topps and MLB runs through 2025. The Major League Baseball Players Association deals with Topps and Panini both expire in 2022. However, Gray said he believes that Topps will still have the ability to sign players individually due to a licensing grandfather clause.
“When people say (Topps) has one year left, that’s hogwash,” Gray said. “It’s way more complicated than people think, which is interesting because I think Topps can make cards until 2026 under the way the system is set up.”
Even without Major League Baseball, Topps still has a stable of licenses of European soccer, WWE, F1, cricket and NHL stickers. Gray believes that Bowman is a brand that Topps can keep alive in baseball and be successful with.
“Soccer is okay, and they are pumping big numbers out,” Gray said. “But what everyone is forgetting is Bowman doesn’t disappear because they don’t have a PA license or a Properties license. You can’t value their baseball business at zero. They are going to do rookies, in some capacity somewhere. And they’re going to do legends, in some capacity somewhere.”
Gray said that in the current state of the industry, the sports card manufacturers must see themselves as allies more than competitors.
“In the old days I would have bashed my competitors or danced around if something bad happened to a competitor, Gray said. “(Today,) No way, Jose. We’re all on the same team. Right now, we need to rally the troops and pray that the products that come out are good products, and that Fanatics does a great job. We want that. We want Panini and Topps to figure out how to shift and pivot to be around. We do not want Topps gone, we do not want Panini gone. And Upper Deck – I’m in a lawsuit with Upper Deck. I should want them gone, but I don’t want them gone. Because the combination of all these things meets everybody’s collecting goal. We need everybody around. It’s a shame that everyone’s not going to have logos, but I think it’s going to turn out just fine.”
Despite the shock and awe of the shift in the industry, Gray is optimistic that Fanatics will do a good job as a sports card manufacturer.
“I’m willing to give them the benefit of the doubt and say ‘let’s don’t lynch these guys yet’, or have unreasonable expectations,” Gray said. “They might be able to pull this off.
Gray believes Fanatics’ model could change things for the better in some ways.
“They’ll probably end up fixing some of the things collectors don’t like about the industry,” he said. “I think the odds of an $800 National Treasures factory cost box being $4,000 or $6,000 decreases a little in a Fanatics scenario. It’s the current distribution system that allows that to happen.”
“I mourn for Topps products that we’ve seen and loved,” he said. “And I mourn for Panini products. Because even though they’re my competitors, I think they did a great job. Yes, they’ve had some little things like redemptions which we hate, but they did a great job overall.”
Who Will Develop Fanatics Products?
One of the major issues facing Fanatics will be staffing the company. Are they going to build and develop their own talent, hire newcomers into the industry, or poach some of the veterans in the industry?
“You have to consider the salary cap, and the team’s needs,” Gray said. “You’re going to have to put together a lot of pieces. This is the negative for not buying Topps or Panini. You can buy a team.”
Gray said that in order to be successful, they will have to have a team that has a wide range of ideas and visions for their different products.
“They need five guys who have different visions for making cards,” he said. “If you have one guy imposing his vision, he can probably do some things well, but he won’t do everything well. It’s not about one guy. It’s about five or seven great guys.”
Gray said the most logical thing for Fanatics would do is buy every company.
“You buy all the companies, and no one’s there to sue you for anti-trust,” he said. “It would cost about five billion dollars or four billion dollars, but it’s pocket change, right? Spend the four billion, take the best of everybody, and take the best brands. Could you imagine taking the best brands from all four companies? Your line-up would be phenomenal. And if you took the best people from each company, what a team you could build. You could build a great all-star team but you’re going to have to buy everyone you need.
“There’s like 50 roads this could go down. The best road is Fanatics buys all the companies. They’re going to get a little bit better deal than they would have otherwise because of the circumstances and on day one they hit the ground running. Fans are happy because all the brands they love are back. I don’t think it’s going to happen but that’s the best case situation.”
About Jeff Morris
Jeff Morris is a hobby veteran who has been a collector for more than 50 years. Originally a hobby journalist, he became brand manager at Pinnacle, and then was an executive for Collector’s Edge and Shop at Home before joining Pacific Trading Cards as VP Marketing. He is the former editor and publisher of Canadian Sports Collector magazine, and he was also a columnist for ESPN.com.