Fanatics Lands Exclusive Sports Card Deals -- Now What?
A company that has never produced trading cards now enters the hobby. Will Fanatics do right by the hobby?
A major change in the sports trading card landscape took place with the announcement that Fanatics had acquired the exclusive licenses from Major League Baseball and the MLB Players Association to produce baseball cards.
The Wall Street Journal broke the story Aug. 19, reporting that not only did MLB and the MLBPA agree to such a deal, but that the players associations for NBA and NFL did the same.
An immediate ramification of the exclusive licenses is that Topps, which has produced baseball cards since 1951, will soon exit the market. While the Fanatics deal with MLBPA won't start until 2023, and Topps has an agreement with MLB that runs through 2025, the latter company will be on the way out.
Topps was set to merge with Murdock Capital and take the company public, but that merger is off given the development with Fanatics.
This development also puts Panini's future into question. Panini has exclusive licenses for NFL and NBA cards, but with those players associations making deals with Fanatics, and the NBA doing the same (the NFL hasn't reached such an agreement), Panini may very well be out of those sports, along with baseball (Panini has an MLBPA license, but not an MLB license).
The question now is what happens next. Fanatics has never produced sports trading cards before, though it does offer some for sale on its website.
There has been speculation that Fanatics could buy Topps, but that's merely speculation at this point.
Regardless of what happens, the sports card industry is about to see a major shift. And the question is how Fanatics is going to approach the business.
I've read some concerns that Fanatics could take the hobby and focus is solely on the investment side. That would be troubling, because as Ryan Fagan with The Sporting News notes, it's important to make sure some product is available at a reasonable price to keep people interested.
It's easy to think that people only care about pulling autographed cards and individually-numbered cards to 50 or less. However, that's the person who only thinks about chasing the golden ticket -- and that's the type of person that allows flippers to capitalize and buy up retail product to hype those golden tickets.
It's why I previously argued that not every set absolutely needs to have autographed, memorabilia or individually-numbered cards in every pack, no matter where you buy them. Sure, you can make those products available through hobby dealers. But make them available in retail outlets and that gives flippers the incentive to clear the shelves.
I agree with Fagan that there needs to be one set available everywhere -- in every hobby shop, retail outlet or convenience store out there, and at a reasonable price. Include a simple parallel set or a couple of small chase sets if you wish, but no autographs, memorabilia or individually-numbered cards.
Instead, make those golden tickets only available in hobby products. And when it comes to premium sets, make them hobby exclusive. Not only does this deal a blow to the flippers, but it gets more people to build relationships with a local card shop.
As Fagan wrote, companies that just ran the printing press for every single set were a problem, but distributing product to as many outlets as possible was not. Therefore, Fanatics should pick one set to make available everywhere and at a low price, while making other sets in limited production, and its top sets hobby exclusive. And any hobby product sold has the golden tickets that some collectors favor.
Fanatics has an opportunity to ensure the hobby truly thrives. But if it solely focuses on the investor and high-end collector, it could do more harm than good.
And that's what collectors need to remember -- without an influx of new and younger collectors who just want to enjoy a hobby, they can't insist everything be about the big hit. They can have it in some cases, but making it solely about the big hit was all the incentive the flippers needed.
Regardless of what Fanatics does, the hobby has changed in a big way, and whatever Fanatics does will have major implications for where the hobby goes.