Fanatics to Acquire Trading Card Company Topps
Last night it was announced that e-commerce company Fanatics have reached an agreement to purchase the Topps trading card company for roughly $500 million. Fanatics is starting a next generation trading company that will give sport organisations such as the NBA, NFL and MLB in addition to their player associations equitable partnerships in the venture.
Although some sports and business commentators may believe that the proposed merger of Fanatics and Topps would be too small to concern antitrust regulators concerned with mergers between market leaders, the FTC and DOJ have a comparable precedent with the proposed DraftKings - FanDuel merger of 2017. A proposed merger that the FTC blocked due to risk of consolidation within the daily fantasy sports category.
Fanatics hasn’t announced any plans for its trading card business, but given Topps’ extensive history expect the brand to live on under Fanatics in some capacity. The sports apparel giant, which brought in former StockX co-founder Josh Luber to run its card business despite little trading card experience, gets an iconic company with access to its extensive archive and in-house talent.
Fanatics Trading Cards is now poised to manufacture and distribute baseball trading cards immediately, ahead of the current agreement with Topps that runs out in 2025.
Direct to Consumer Model
Fanatics, which reached an $18 billion valuation in 2021, wants to expand the trading card business with a more direct-to-consumer business model. Collectors should be able to insure, grade, store, buy & sell on a marketplace through Fanatics.
Fanatics evidently wants to lead the industry and capitalize on the sports trading card business that is booming and projected to reach $98 billion by 2027. Acquiring Topps aligns with Fanatics’ plans to build out an NFT collectible space through its Candy Digital company, which has exclusive rights to produce MLB digital artwork and NFT’s. The deal also gives Fanatics the trading card licensing rights for Major League Soccer, UEFA tournaments, the Bundesliga and Formula 1 racing.
Candy Digital, launched in June 2021, aims to be “the trusted, institutional-grade provider of authentic licensed products in the NFT space”. Fanatics raised $100 million in a funding round in October backed by investors including Softbank and retired NFL quarterback Peyton Manning for Candy Digital as it intends to be a market leader in the sport and entertainment NFT space.