The Other Shoe: Fanatics buys Topps

Late last summer, when sports apparel and memorabilia giant Fanatics came out of nowhere and swooped trading card licensing deals with NBA, NFL, and MLB, one of the biggest side stories was the fate of venerable card maker Topps. The company has produced an MLB card set (or many sets) each year uninterrupted since the early 1950s, and now would face a future without baseball cards once its license deal expired in 2025.

The way Fanatics had been spending money, I and many others figured the most likely course of action was that Fanatics would simply purchase Topps and use their familiar brand to continue the baseball card pedigree, perhaps even bring on some of the Topps leadership and creative team.

It didn’t happen right away, presumably at least in part due to some financial weirdness resulting from Topps’s aborted attempt to merge with a capital firm and become publicly traded. But it’s happening now, in the opening week of the new year: Fanatics has purchased the Topps trading card division (but not the even more venerable candy division) for $500 million.

As I mentioned in my earlier article on Fanatics’s aggressive moves into the trading card space, this is the “right” move, not just for Fanatics, but for Topps as well, who would otherwise be left holding some fairly tiny slices of a trading card industry it once dominated. The MSNBC article above seems to indicate that the deal includes Topps’s existing infrastructure and distribution systems, which makes total sense, and it points out that with the purchase, Fanatics immediately takes over the MLB license it had earlier purchased the rights to starting in 2025.

This means that the 2022 baseball season will be the first test of the new Fanatics/Topps combined powers. Fanatics apparently wants to become an end-to-end consumer-direct destination for sports fans, card collectors and even gamblers, saying they’re even going to start an in-house card grading system (or perhaps they’ll buy an existing one?). Next baseball season will be the first look at how they plan to bring all these pieces together.

Another interesting piece, from a lot of collectors’ perspectives (including mine), is that with Topps being under the Fanatics umbrella, and with Fanatics holding licenses and creating profit-sharing agreements with the players unions in MLB, NFL, and NBA, we might see the return of Topps products in the latter two sports. Topps lost its NBA license in 2009, and stopped producing NFL cards in 2015. A lot of fans have been clamoring for the return of Topps Chrome sets, in particular, for football and basketball, and this move by Fanatics opens the door to that possibility.

This was absolutely the smart move for both companies, but I still stand by my earlier doubts about the future of trading cards under the Fanatics mega-corporation. The sports cards landscape hasn’t been this consolidated, ownership-wise, since the 1970s, which was a pretty down time for trading cards. It wasn’t until the 1980s, when Fleer and Donruss (and later Leaf and Upper Deck, etc.) entered the market, that the trading card market started to grow in leaps and bounds.

Of course, that growth eventually led to the junk wax era and the eventual burst bubble that sent the industry crashing hard in the late 1990s and early 2000s. Today we have a bubble about to burst/in the process of bursting AND new consolidation of card manufacturer ownership, which feels like it could be the worst of both worlds. One has to wonder if the Fanatics move to start profiting from trading cards now as opposed to three years from now might have been partially fueled by an awareness that the industry might already be cooling off from its pandemic-driven highs. There are still a lot of high-end, ultra rare cards setting sales records at auction, but down where most collectors play (and where revenues for card makers are generated), a lot of card values have stagnated, while the cost of sealed product (packs, blasters, boxes, cases, etc.) haven’t dropped at all. I’m guessing I’m not the only collector who has lost interest in new cards in the last several months, recognizing the unceasing ebb and flow of new release hype versus soft demand for that same product in secondary markets a month or so later.

Time will tell, and with this acquisition, Fanatics has certainly sped up the clock.

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