Rise to the Topp: Fanatics Strikes Sports Trading Card Deal

BY: JOSH BENRUBI

If the vision of memorabilia mega-giant Fanatics is to take the sports trading card industry by storm, they have officially made the first big step in successfully doing so.

As the sports trading card market has gained substantial traction among nostalgia-longing consumers over recent years, Fanatics plans to make a massive splash in this industry.

According to Wall Street Journal and a memorandum from the Major League Baseball Players Association (“MLBPA”) obtained by ESPN, Fanatics is set to become the exclusive licensee for baseball trading cards when well-known card manufacturer Topps’ license with the MLB expires at the end of 2025. In this groundbreaking move, Fanatics will put an end to Topps’ 70-year partnership in serving as Major League Baseball’s iconic brand for baseball trading cards.

Fanatics’ Partner and entrepreneur Michael Rubin will be leading Fanatics’ offshoot trading card company head-first into the baseball trading card market. Along with Rubin in this venture will be Josh Luber, the founder of StockX.

In addition to striking deals with the MLB and MLBPA, the NBA (along with its player union) and the NFLPA will both have ownership interests in the newly formed Fanatics company.

From a legal standpoint, separate licensing agreements are required to license a league’s logos, branding marks, and player’s names/likenesses. Typically, the name, image, and likeness aspects are handled by respective players’ associations.

Topps, which was purchased by former Disney CEO Michael Eisner in 2007, has an exclusive license with the MLB that expires at the end of 2025. Topps also has a license with the MLBPA that runs through next year.

Before the licensing rights were aggregated among all professional players, Topps signed players to four-year contracts where they received a $75 advance and $500 a year for the right to their name, image, and likeness.

The only other time that the MLB and its players have provided exclusive rights to their names, images, and likenesses to a non-Topps company was to Haelan Laboratories in 1953 sparking a monumental lawsuit between the two companies which gave rise to the modern publicity rights law.

According to MLBPA head Tony Clark, the deal with Fanatics will provide for a significant increase in revenue that could not have been acquired through any of its previous deals. Additionally, it was confirmed that Fanatics provided an offer to the MLBPA that the MLBPA would likely not refuse – an offer that Topps could not come close to matching.

With this deal, Fanatics can begin producing cards without team logos for the first three years, and when Topps’ deal expires at the end of 2025, Fanatics will be allowed to include all MLB trademarks and team logos. Considering that a T206 Honus Wagner card sold for $6.6 million on Sunday night, Fanatics wants to take advantage of this market opportunity.

Additionally, according to The Athletic, Fanatics will replace Panini as the NBA’s card maker. Fanatics holds exclusive rights to produce NBA intellectual property on its trading cards starting in 2026.

As Fanatics attempts to disrupt a market that has been stable and consistent for many years, companies such as Topps, Panini, and Upper Deck are beginning to be left in the rear-view mirror. To the companies that have combined for 173 years of producing sports trading cards – it’s your move.

Josh is a graduate of New York Law School and the former Sports Law Society President. He is currently an Associate at Law Office of Samuel Eber, PC. You can find him on Twitter @JBenrubi_

Sources:

https://www.forbes.com/sites/marcedelman/2021/08/23/after-losing-mlb-license-topps-should-pivot-to-college-sports-trading-cards/?sh=14c70dae77ab

https://www.marketwatch.com/story/mlb-taps-fanatics-to-replace-topps-as-baseball-trading-card-maker-heres-what-that-means-for-the-value-of-your-cards-11629741371

https://www.espn.com/mlb/story/_/id/32052284/fanatics-strikes-deal-become-exclusive-licensee-mlb-cards

https://bleacherreport.com/articles/10011007-espn-nflpa-fanatics-agree-to-20-year-contract-for-trading-cards-joining-nba-mlb

https://www.actionnetwork.com/news/mlb-exlusive-trading-card-lecense-fanatics-topps

https://www.one37pm.com/culture/trading-cards/fanatics-sports-cards

https://www.inquirer.com/sports/baseball-cards-topps-fanatics-mlb-deal-20210819.html