It’s been two years since Topps’ attempt to go public with a $1.3 billion SPAC merger with Mudrick Capital Acquistion Corp was foiled by the announcement that Fanatics had agreed to licensing deals with MLB, MLBPA, the NBA, the NBAPA, and the NFL to become the exclusive manufacturer of trading cards. Months later, Fanatics purchased the Sports and Entertainment division of Topps Trading Cards in what is believed to have been a half-billion dollar purchase, in an effort to further legitimize Fanatics’ effort to exert a firm grip over the trading card industry by buying the most trusted name in trading cards.
The fall out has been wide ranging since that initial announcement two years ago as numerous trading card distributors have been told that Fanatics will no longer conduct business with them, as well as new sales requirements being put on local card shops for purchasing Topps products. However, one of the biggest casualties of the Fanatics industry takeover is Panini America, who in the takeover lost out on the renewal of their licensing deals with the NBA, the NBAPA, the NFL, and MLBPA.
This week, Panini America has fought back by filing an antitrust lawsuit against Fanatics in their attempt to monopolize the trading card industry.
The lawsuit filed by Panini America in U.S. District Court in Florida this week is filed with a wide range of allegations against Fanatics and its CEO Michael Rubin.
The deal cut by Fanatics with the sports leagues and their unions will run for 20 years. The lawsuit claims it will eliminate any competition from the trading card industry for nearly three decades, thus hurting consumers by allowing Fanatics to exert their influence on the price of trading cards for decades.
The lawsuit also contains allegations that Fanatics disparaged Panini America with claims that the did not have the money to the money owed under its current contracts with sports leagues and their unions. Also included is the fact that Fanatics was able to raid the Panini America ranks of several high-ranking executives. The lawsuit claims that these Panini America employees were threatened by Fanatics to be locked out of the industry for years to come. On Monday, Fanatics filed a countersuit to Panini America’s.
This not the first time this type of lawsuit impacted the trading card industry. In the early 1980’s, Fleer and Leaf filed a similar lawsuit against Topps in an effort to break up their over three-decade long monopoly of the trading card industry. The victory by Fleer and Leaf ushered in significant competition to the Topps brand by flooding the market with new trading cards and jumpstarting the Junk Wax Era that essentially led to the entire industry crashing.
