Topps to be replaced as the BB Card Manuracturer

[Misunderestimated]

This begins to read like a bad script for an episode of Showtime's "BIllions" ...behind the scenes deals conducted in secrecy for the licenses leading to bargain-basement buy-outs and ruining mergers....
Anyway... I don't care that much for the Topps company as such -- I just want the brand to continue in good hands with its 70 yr history preserved and perpetuated. I don't really care who or what owns it as long as the owner isn't flat-out evil ...If the owner can preserve Topps the way Topps preserved its former rival Bowman's brand -- after it realized the value of this in 1989 -- that's fine.
To me, the greatest attribute of Topps Baseball cards -- like American Baseball itself in many ways -- is its history. That's really why I care about this licensing issue. I have an optimistic view that the rational profit-seekers with Fanatics understand this and will make a "play" for the Topps brand.

[egri]

Originally Posted by judsonhamlin

As much as this really hits at the nostalgia we feel of opening Topps packs and building Topps sets as kids, I really can’t think of the last ‘base’ set that had a really inspired, unique design. Archives, A&G and Heritage all trade on that nostalgia feel, but probably mean not much at all to anyone under the age of 30. And the whole emerald/refractor/image swap only goes so far and quickly becomes frustrating. I mean if you’re 11 and growing up a fan of Trout, there is no way to ever get all his cards from any one year, much less over a few years. The lottery mentality might be a boon for a narrow and vaguely disturbed subsection of the community but does f all for the kids who might actually want to collect. Maybe a new brand might bring better designs and a simplified base concept while still pumping up the parallels on the higher end stuff which can pull the kids in and then get them to upgrade as they get more interested.

I couldn't agree more. As far as the base sets go, Topps really ossified in recent years. When the best they could come up with was ripping off what Sy Berger came up with 50 years earlier, or what Allen & Ginter did in the 1880s, something had to change.

[ZenPop]

Okay... Little League teams, then.

Originally Posted by ValKehl

Mark, I can see something like this happening, but with college teams, and with all the major sports, not just baseball. I think this would take much more initial capital, say $25M or more, as the NCAA would demand a huge fee for an exclusive deal and college athletes can now be compensated.

[CurtisFlood]

Originally Posted by Cmvorce

I would imagine Fanatics will now attempt to acquire Topps? Seems like there would be value in maintaining the brand.

Bingo!

[Rich Klein]

The NFL has now joined in the fun and given Fanatics a 20 year contract.

[BobC]

Very interesting the way this is all developing, and all the major US sports licensing for cards seem to be going to Fanatics, that also shares ownership with the same major sports leagues and their player's unions.

I know that MLB operates under a 100 year old exemption from the Sherman Anti-Trust Act, not sure about the NFL and NBA. I wonder with all of what is occuring if at some point this possibly comes under scrutiny as a potential violation of anti-trust laws. Doubt it, but don' know all the intricate details, so one never knows.

[packs]

Isn't Fanatics doing to Topps what Topps did to other companies? If it wasn't a trust before, is it now?

[abothebear]

I wonder if the major sports leagues' exemptions are nearly over. The stuff happening in college football is going to eventually lead to lawsuits and probably a successful competing league one of these days. The last attempt came close but they ran out of money and covid happened before they had quite enough inertia. In basketball, there is already enough talent to support a robust lower-level league. The NBA and NCAA are trying their best to maintain control over it with the one-and-dones and the G-league. Regional independent leagues in the major sports are primed for a level of success, but the anti-trust exemption, the near-sighted unions, and collusion with the NCAA is a hurdle. But it is one that may be successfully dismantled soon. The changes in how we get our TV may play a role in this as well.

Originally Posted by BobC

Very interesting the way this is all developing, and all the major US sports licensing for cards seem to be going to Fanatics, that also shares ownership with the same major sports leagues and their player's unions.

I know that MLB operates under a 100 year old exemption from the Sherman Anti-Trust Act, not sure about the NFL and NBA. I wonder with all of what is occuring if at some point this possibly comes under scrutiny as a potential violation of anti-trust laws. Doubt it, but don' know all the intricate details, so one never knows.

[Mark17]

Originally Posted by packs

Isn't Fanatics doing to Topps what Topps did to other companies? If it wasn't a trust before, is it now?

I was thinking this too. Maybe the legal team at Topps should dust off and reuse those arguments Fleer made against them in their lengthy legal challenge years ago.

[BobC]

Originally Posted by packs

Isn't Fanatics doing to Topps what Topps did to other companies? If it wasn't a trust before, is it now?

I'm thinking in terms of the sports leagues owning Fanatics and then giving the licensing contracts basically to themselves, with apparently no one else even having a chance to bid, and summarily putting the licensing for all three major US sports in the hands of a single company virtually overnight.

Don't forget that Topps did lose exclusivity rights in the courts back in 1980, which is what allowed Fleer and Donruss to start issuing baseball cards in 1981. But the court cases and appeals continued and went back and forth for years after. And these cases revolved around contract definitions and interpretations,not just anti-trust issues. It will be interesting to see if Topps can find some way around the exclusivity of these new licensing agreements to try and still create BB cards going forward, but likely not because in 1980 when Fleer initially won the right to sell BB cards, they did so with the licensing coming through from the MLBPA since Topps exclusive contracts back then were with the individual players. Now though, the MLBPA is also part owner of the Fanatics entity granted exclusive licensing of MLB player rights going forward. So it is highly unlikely they (MLBPA) will grant Topps any licensing rights like they did with Fleer back in 1981.

So the playing field is quite a bit different now that MLB and the MLBPA both own interests in Fanatics. I can see Topps possibly trying to raise some type of anti-trust argument in the courts, especially since they weren't even afforded a chance to compete and bid on the new licensing agreements.

So with this joint colloboration between the three major US sports leagues and their respective players associations, if the combined effort to control licensing works out and and they prevail against any potential legal challenges, do they go ahead and form their own exclusive TV/cable network next and do away with anyone else ever airing any MLB, NFL, or NBA games ever again? Might not be as easy as the TV contracts aren't handled the same in all three sports, but the lure of money could lead to a lot of compromises among the various leagues and teams. Time will tell.

[BobC]

Originally Posted by abothebear

I wonder if the major sports leagues' exemptions are nearly over. The stuff happening in college football is going to eventually lead to lawsuits and probably a successful competing league one of these days. The last attempt came close but they ran out of money and covid happened before they had quite enough inertia. In basketball, there is already enough talent to support a robust lower-level league. The NBA and NCAA are trying their best to maintain control over it with the one-and-dones and the G-league. Regional independent leagues in the major sports are primed for a level of success, but the anti-trust exemption, the near-sighted unions, and collusion with the NCAA is a hurdle. But it is one that may be successfully dismantled soon. The changes in how we get our TV may play a role in this as well.

If I remember correctly, MLB's court confirmed anti-trust exemption was finalized via a SCOTUS ruling in 1921, from a case brought by the Federal League against MLB that originated back in 1914. And the federal judge who presided over that initial case was none other than Landis himself. He was supposedly biased for MLB and did everything to delay the original case and make sure the Federal League was out of business and lost the case, which they did. It took until 1921 before the final appeal was also found in favor of MLB. Have always felt his later appointment as baseball's first Commissoner was blatant payback for his help to MLB in the anti-trust case, and that the timing of his appointment and the Supreme Court's final decision on the appeal of that case in favor of MLB wasn't wholly coincidental, especially given the esteem, respect, and influence he was supposed to have had throughout the entire federal court system.

Had also heard/read somewhere that in the past few months a few members of Congress were looking to bring forward a challenge against MLB's anti-trust exemption, despite the pandemic. Haven't heard anything new about this since then.

[packs]

Originally Posted by BobC

I'm thinking in terms of the sports leagues owning Fanatics and then giving the licensing contracts basically to themselves, with apparently no one else even having a chance to bid, and summarily putting the licensing for all three major US sports in the hands of a single company virtually overnight.

Don't forget that Topps did lose exclusivity rights in the courts back in 1980, which is what allowed Fleer and Donruss to start issuing baseball cards in 1981. But the court cases and appeals continued and went back and forth for years after. And these cases revolved around contract definitions and interpretations,not just anti-trust issues. It will be interesting to see if Topps can find some way around the exclusivity of these new licensing agreements to try and still create BB cards going forward, but likely not because in 1980 when Fleer initially won the right to sell BB cards, they did so with the licensing coming through from the MLBPA since Topps exclusive contracts back then were with the individual players. Now though, the MLBPA is also part owner of the Fanatics entity granted exclusive licensing of MLB player rights going forward. So it is highly unlikely they (MLBPA) will grant Topps any licensing rights like they did with Fleer back in 1981.

So the playing field is quite a bit different now that MLB and the MLBPA both own interests in Fanatics. I can see Topps possibly trying to raise some type of anti-trust argument in the courts, especially since they weren't even afforded a chance to compete and bid on the new licensing agreements.

So with this joint colloboration between the three major US sports leagues and their respective players associations, if the combined effort to control licensing works out and and they prevail against any potential legal challenges, do they go ahead and form their own exclusive TV/cable network next and do away with anyone else ever airing any MLB, NFL, or NBA games ever again? Might not be as easy as the TV contracts aren't handled the same in all three sports, but the lure of money could lead to a lot of compromises among the various leagues and teams. Time will tell.

Where did you read that this a no-bid decision? The articles I read said that Fantatics outbid Topps 10 to 1 for the rights.

This article says Fanatics paid 10 times more than Topps ever paid but I guess it's not clear if it was a bid or not: https://www.espn.com/mlb/story/_/id/...nsee-mlb-cards

[Snowman]

Originally Posted by BobC

I can see Topps possibly trying to raise some type of anti-trust argument in the courts, especially since they weren't even afforded a chance to compete and bid on the new licensing agreements.

I read somewhere that Topps was actually given the opportunity to match the Fanatics offer but that it was ~10x the valuation of Topps' prior agreement with MLB/MLBPA and they simply couldn't compete.

I suspect most of the squeeze by Fanatics will come from the distribution channels. I think this is most likely to hurt local card shops and breakers.

Originally Posted by BobC

So with this joint colloboration between the three major US sports leagues and their respective players associations, if the combined effort to control licensing works out and and they prevail against any potential legal challenges, do they go ahead and form their own exclusive TV/cable network next and do away with anyone else ever airing any MLB, NFL, or NBA games ever again? Might not be as easy as the TV contracts aren't handled the same in all three sports, but the lure of money could lead to a lot of compromises among the various leagues and teams. Time will tell.

Very interesting question. I could definitely see something like this happening. Especially in the modern era where most households have streaming services. They could just skip local broadcasts altogether and create their own version of Netflix for sports.

Whatever they do for sports cards and TV content going forward though, I think we'll see them contracting/licensing that out, or acquiring companies like Topps or Panini. Why build from the ground up when you can just buy it from someone else who already specializes in it and who almost certainly does it better?

[BobC]

Originally Posted by packs

Where did you read that this a no-bid decision? The articles I read said that Fantatics outbid Topps 10 to 1 for the rights.

This article says Fanatics paid 10 times more than Topps ever paid but I guess it's not clear if it was a bid or not: https://www.espn.com/mlb/story/_/id/...nsee-mlb-cards

Off Yahoo I believe. Just type into your web browser "Topps loses baseball card license", and hit search. You should find plenty of articles. One in particular by Andy Esposito of NYSportsDay included quotes from Andy Redman, Topps Executive Chairman, who states they were just informed the license had been given to someone else. Topps didn't even know negotiations had been going on with Fanatics.

And the stories saying Fanatics is paying 10X more than Topps ever paid need to be taken with a big grain of salt. It isn't a perfect analogy, but think of a business owner who also separately owns the building his business is in. He's basically paying himself rent so he can make the rent whatever he wants, even multiple times what a fair market rent would be. All he's doing is taking money out of one of his pockets and putting it into another pocket of his. He ends up with the same amount of money at the end of the day. And since MLB and the MLBPA also both own part of Fanatics, to some extent they are paying themselves licensing fees, so it is somewhat like the business owner paying himself rent. Except in this case there are going to be multiple sports leagues and player's associations involved. My guess is the new NBA and NFL licensing agreements with Fanatics may also be at multiple times what was previously being paid as licensing fees.

This can help to make it look like Topps and other sport license holders would clearly have been outbid when it came time for their license renewals, regardless of what they did. But because of the common ownership between the leagues and player associations with Fanatics, they have an unfair advantage over Topps and other independent, unrelated license holders in setting renewal licensing fee amounts. This is just the kind of thing that could result in this being taken to the courts. However, due to the size and economic wherewithal of Fanatics, the leagues and player associations, Topps and othe current licensees may not have the ability to sustain and survive a long drawn out court battle, especially if a major part of their business had ceased due to the loss of those licensing agreements. Panini is likely a different story due to their size and worldwide market in non-major US sportscards. No idea how they will end up reacting to all this.

We'll just have to wait and see what happens next. But I would guess that if this is ultimately going to result in a lawsuit(s), it will happen sooner than later while someone like Topps still has a license to produce cards for a few more years.

[packs]

How would the players acquire the rights to negotiate television deals? These deals are negotiated by the owners. The Yankees have their own network. I don't see how the players could ever hope to take it over.

[packs]

Originally Posted by BobC

Off Yahoo I believe. Just type into your web browser "Topps loses baseball card license", and hit search. You should find plenty of articles. One in particular by Andy Esposito of NYSportsDay included quotes from Andy Redman, Topps Executive Chairman, who states they were just informed the license had been given to someone else. Topps didn't even know negotiations had been going on with Fanatics.

And the stories saying Fanatics is paying 10X more than Topps ever paid need to be taken with a big grain of salt. It isn't a perfect analogy, but think of a business owner who also separately owns the building his business is in. He's basically paying himself rent so he can make the rent whatever he wants, even multiple times what a fair market rent would be. All he's doing is taking money out of one of his pockets and putting it into another pocket of his. He ends up with the same amount of money at the end of the day. And since MLB and the MLBPA also both own part of Fanatics, to some extent they are paying themselves licensing fees, so it is somewhat like the business owner paying himself rent. Except in this case there are going to be multiple sports leagues and player's associations involved. My guess is the new NBA and NFL licensing agreements with Fanatics may also be at multiple times what was previously being paid as licensing fees.

This can help to make it look like Topps and other sport license holders would clearly have been outbid when it came time for their license renewals, regardless of what they did. But because of the common ownership between the leagues and player associations with Fanatics, they have an unfair advantage over Topps and other independent, unrelated license holders in setting renewal licensing fee amounts. This is just the kind of thing that could result in this being taken to the courts. However, due to the size and economic wherewithal of Fanatics, the leagues and player associations, Topps and othe current licensees may not have the ability to sustain and survive a long drawn out court battle, especially if a major part of their business had ceased due to the loss of those licensing agreements. Panini is likely a different story due to their size and worldwide market in non-major US sportscards. No idea how they will end up reacting to all this.

We'll just have to wait and see what happens next. But I would guess that if this is ultimately going to result in a lawsuit(s), it will happen sooner than later while someone like Topps still has a license to produce cards for a few more years.

If you're going to take one thing with a grain of salt why not this idea that Topps didn't have an opportunity to make a play? The only comments I see on the negotiations is a Topps Exec claiming they didn't know the rights were being shopped around.

[BobC]

Originally Posted by Snowman

I read somewhere that Topps was actually given the opportunity to match the Fanatics offer but that it was ~10x the valuation of Topps' prior agreement with MLB/MLBPA and they simply couldn't compete.

I suspect most of the squeeze by Fanatics will come from the distribution channels. I think this is most likely to hurt local card shops and breakers.



Very interesting question. I could definitely see something like this happening. Especially in the modern era where most households have streaming services. They could just skip local broadcasts altogether and create their own version of Netflix for sports.

Whatever they do for sports cards and TV content going forward though, I think we'll see them contracting/licensing that out, or acquiring companies like Topps or Panini. Why build from the ground up when you can just buy it from someone else who already specializes in it and who almost certainly does it better?

See my previous post referencing articles quoting Topps Executive Chairman, does not sound like they had any fair chance to bid.

And regarding Fanatics having to start building a card prep business from scratch, others had already pointed out to me that they already do create and distribute some type of cards. Plus they have a few years yet before they take over the licenses, which also gives them time to possibly steal people away from Topps or others. Will be interesting.

[BobC]

Originally Posted by packs

How would the players acquire the rights to negotiate television deals? These deals are negotiated by the owners. The Yankees have their own network. I don't see how the players could ever hope to take it over.

They wouldn't necessarily include the players associations in that type of deal, but they could to some extent since the players are the ones actually on air, giving interviews, follow-up stories, doing commercials, whatever. Would likely set up a whole new entity to handle something like that as well. Wouldn't use Fanatics for that. Just speculating that since you now have the three major US sports leagues apparently working together, what is to stop them from taking that coalition even further, except maybe anti-trust laws?

And I'm aware of teams like the Yankees already having their own network, and that is why I also said the leagues may not go this route because they don't all handle their TV contracts the same. I was specifically thinking of the Yankees when I posed that caveat. But I then surmised that they could still get everyone to agree to taking part in a new network if they could demonstrate how everyone could make even more money by doing so. Plus, I personally wouldn't mind seeing the big market MLB teams always having such a money advantage over the smaller market teams brought down a bit. A common shared network including MLB teams would likely work to even out TV/network money between all the teams in the basball, and at least reduce some of the advantages the big market teams like the Yankees have now.

[packs]

I think that scenario is unlikely if not impossible. The games are played in stadiums owned by the owners and broadcast on networks owned by the owners in some cases. Two different networks broadcast the same game nightly, the home and away networks. Occasionally a large network buys the rights for an exclusive broadcast but it's select games.