On June 27, 2023, Panini America—a subsidiary of The Panini Group, the world leader in licensed collectibles—inked an exclusive trading card deal with Tre Johnson, arguably the best basketball player in the 2024 high school class and a projected top NBA draft choice in 2025. The agreement between Panini and the high school prospect is the first of its kind and likely the catalyst for Johnson transferring from Lake Highlands High School in Dallas, Texas, to the basketball powerhouse, Link Academy, in Branson, Missouri. Worthy of note is the fact that Johnson announced his intent to transfer on June 16, less than two weeks before Panini published the press release that made the multi-year trading card deal public. Johnson is now the most recent example of a top-tier high school talent fleeing Texas for states with favorable Name, Image, and Likeness (NIL) laws regarding high schoolers’ ability to receive compensation.

“Prospecting” is an investing method regularly employed by collectors and dealers in the sports card hobby. The idea is that the savvy dealer or collector can get in early on the unproven athlete’s career, providing an opportunity to buy low and, maybe, just maybe, sell high. Oftentimes, this means making investments in athletes’ sports cards and memorabilia while the “prospect” is still in the minor leagues or—following the release of new products like 2022 Bowman University—still in college. Unsurprisingly, prospecting is most common among baseball card dealers and investors due to both, the massive pool of potential talent that gets drafted every season, and the depth of MLB’s minor league system. The practice of prospecting is far less routine in a sport like basketball where (1) the NBA’s one-and-done rule creates a truncated window of amateurism (for those who observe) and (2) a smaller draft class presents relatively known commodities. As state NIL laws allow companies like Panini and Fanatics to dip into the high school talent pool, sports card investors may widen their apertures regarding which sports make for viable prospecting markets.

State NIL legislation has trickled down to the high school ranks less than two years after its implementation on June 30, 2021. However, not all state-sponsored bills regarding high schoolers’ ability to profit from their publicity rights are created equal. In Texas, Senate Bill 1385 prohibits individuals, corporations, and other organizations from entering arrangements with prospective athletes, regarding the use of the prospect’s NIL, prior to the athlete’s enrollment in an institution of high education.[1] Conversely, under Section 16 of Missouri’s House Bill 417, high school athletes may “earn or attempt to earn compensation from the use of such athlete’s name, image, likeness rights, or athletic reputation” under two conditions: (1) the prospective athlete is in discussions about enrollment with an in-state postsecondary institution, or (2) the prospective athlete has signed a letter of intent to enroll in an in-state postsecondary institution.[2] Now, it’s not that St. Louis University or Mizzou couldn’t make a late recruiting push for Tre Johnson, it’s just that on May 15, On3 reported that Johnson’s top school choices were narrowed to six: Kansas, Texas, Baylor, Kentucky, Arkansas, and Alabama.[3]

There are a few potential issues regarding Johnson’s deal with Panini including the timing of his transfer in relation to the announcement of the trading card deal, and Missouri state NIL law allowances for high schoolers. While the NCAA remains committed to the avoidance of pay-for-play models and improper inducements tied to choosing a particular school, it has no jurisdiction over a high school athlete. However, Johnson would likely have to report the deal—which looks a lot like an inducement based on the timing—to the NCAA Eligibility Center should he elect to participate in college athletics for a season. Alternatively, Johnson could choose to join a minor league system like the Overtime Elite League (OTE) following his senior season. Twin brothers Amen and Ausar Thompson—selected 4th and 5th overall in the 2023 NBA draft—both played for Overtime Elite after their high school careers and, earlier this year, signed a similar exclusive trading card deal with Panini.[4] The more pressing matter for Johnson is the Missouri law requirement regarding in-state institutions. This may be as simple as Johnson making a statement that he is “reconsidering” Mizzou or any other basketball program within the state as a possible suitor. The Missouri House Bill only requires that high school athletes are “having discussions about potential enrollment with a postsecondary educational institution,”[5] which is a low bar.

If we had access to the contract signed by and between Panini and Johnson, the multi-year aspect of the deal would be interesting to analyze. Without it, we can only assume that the scope of the deal covers just those years that Johnson remains a student-athlete and is in connection with his participation in high school and/or college athletics. Ultimately, the more opportunities for young athletes to monetarily benefit from their athletic prowess the merrier. And as state NIL laws continue to skew basketball “prospecting” younger, sports card investors, dealers, and collectors would be wise to keep an eye on this emerging market.

Nate Otto is a rising 3L at the University of Florida Levin College of Law and the Executive Articles Editor for the Florida Entertainment and Sports Law Review. Find his store on eBay @BlueWhippetSportsCards.

Sources:

[1] 2021 Tex. SB 1385(j)(1). [2] 2023 MO H.B. 417(16)(1)(A)-(B) (emphasis added). [3]No. 1 overall recruit Tre Johnson names top 6 schools, On3 (visited July 1, 2023) https://www.on3.com/news/tre-johnson-names-top-6-schools-alabama-arkansas-baylor-kansas-kentucky-texas/. [4]Panini America Signs NBA Draft Twins Amen And Ausar Thompson To Exclusive Multi-Year Autograph Trading Card and Memorabilia Agreements, Panini America (visited July 1, 2023) https://blog.paniniamerica.net/panini-america-signs-nba-draft-twins-amen-and-ausar-thompson-to-exclusive-multi-year-autograph-trading-card-and-memorabilia-agreements/. [5] 2023 MO H.B. 417(16)(1)(A).