Topps Will Sell Its Sports Card Business to Fanatics, a Rival

The Topps deal mirrors Fanatics’s purchase of the apparel company Majestic, which it acquired after winning the rights to make major-league uniforms, contracts that Majestic had previously won. The deal announced on Tuesday also underscores the breadth of businesses Fanatics has built, aiming to grow beyond ticketing and television, both of which are difficult to expand rapidly. Leagues are looking to new places for revenue, including advertisements on jerseys and legalized sports gambling — and trading card licensing agreements.

The Topps playing card business may not immediately transform under its new ownership. Topps cards will still carry the Topps logo, and the division’s roughly 350 employees will work for the Topps brand independently within Fanatics. But longer term, Fanatics hopes to create for Topps the digital agility that helped transform its licensed apparel business, which is set up to respond quickly to quick shifts in the popularity of an athlete.

Fanatics started its playing card business last year, around the same time it struck deals with unions for N.F.L. and N.B.A. players to produce football and basketball trading cards. The business raised $350 million in September in a deal that valued it at more than $10 billion. With the acquisition of Topps, Fanatics has the right to design, manufacture and distribute baseball cards starting immediately. (Fanatics’ original deal with Major League Baseball and the players’ union had allowed for a 2026 start.

Michael Rubin, the chief executive of Fanatics, called trading cards and collectibles “a significant pillar” in the company’s plans to become a “leading digital sports platform.” Mr. Rubin, whose circle includes Jay-Z and the baseball commissioner Rob Manfred, has in the last decade created a licensing and manufacturing company valued at $18 billion. Beyond hoodies and hats, Fanatics has also begun gambling and video game businesses.

Its bet on trading cards reflects a pandemic-driven interest in memorabilia, as nostalgia-driven investors have found themselves flush. In January, a Mickey Mantle card sold for $5.2 million. In August, a Honus Wagner card sold for $6.6 million. In October, a Michael Jordan card sold for $2.7 million.

Article source: https://www.nytimes.com/2022/01/04/business/topps-fanatics-sports-cards.html