Fanatics acquires Topps buying and selling playing cards for $500 million

Topps’ 2016 season baseball cards will be displayed during an event in New York City.

Kris Connor | Getty Images

Michael Rubin’s e-commerce company Fanatics has acquired Topps trading cards, sources close to the deal confirmed to CNBC Monday evening.

The terms of the deal weren’t available, but industry circles put the deal at around $ 500 million. It will only include Topps’ name and sports and entertainment division, not the company’s candy and gift card line, a source said.

Fanatics and Topps declined to comment, but an announcement is expected on Tuesday.

The deal comes after Fanatics acquired Major League Baseball trading card rights last august. The MLB extended its contract with Topps in 2018 and the existing contract ends in 2025. But with this agreement Fanatics immediately receives the trading card rights from MLB.

Fanatics will also receive rights to Major League Soccer, UEFA, Bundesliga and Formula 1. These leagues also have active agreements with Topps.

And last year Fanatics secured trading card licenses for the National Football League Players Association and the National Basketball Association. In order to maintain these agreements, Fanatics provided equity capital to the leagues and player unions that is guaranteed to generate at least $ 1 billion in revenue over the duration of the partnerships.

Straight to the consumer model

Fanatics who reached one Valuation of $ 18 billion in 2021, wants to further expand the trading card business via direct-to-consumer commerce. For example, when collectors buy a trading card, they can insure, value, store, and even list the asset on a marketplace for sale or trade through Fanatics.

The company plans to capitalize on a sports trading card business that is expected to reach $ 98.7 billion by 2027, according to Verified Market Research.

The Topps acquisition is also in line with Fanatics’ plans to expand its NFT collectibles sector through its Candy Digital company, which owns the exclusive rights to produce MLB digital artwork.

Last year, Topps was valued at $ 1.3 billion as part of a SPAC merger Mudrick Capital Acquisition Corp. II, which fell apart after Topps lost his MLB rights.

Topps was a publicly traded company before it was privatized in 2007 after a $ 385 million deal. Founded in 1938, the company was best known for selling trading cards, including the 1952 Mickey Mantle card, one of which sold for $ 5.2 million in January 2021.

Fanatics proprietor Michael Rubin REFORM Alliance hosts 76ers expertise

Michael Rubin joined rapper Lil Baby in a scrimmage game that featured the kids attending REFORM Alliance night.

Photo: Shareif Ziyadat and Studio 76

Throughout 2021, Fanatics Chairman Michael Rubin spent his time following his company $ 18 billion E-commerce empire.

He took over the trading card license of Major League Baseball, guaranteed $ 1 billion in sales, and also suspended baseball’s NFT rights. Attracted the Dallas Cowboys to e-commerce, he started one Fanatics China Operation and even got an investment from Jay-Z.

Hours before the Philadelphia 76ers, a team he co-owns, played a home game against the Miami Heat on December 15, Rubin put the deal aside and focused on something more significant.

“I think about business all the time, but I didn’t run around on the pitch,” said Rubin. “This is really amazing to me. I haven’t checked my phone for over an hour. I didn’t think about work. “

The reason: Rubin had to watch out for families who were affected by an unfair criminal justice system. He had to show his friend, hip-hop star Meek Mill, that he was still involved REFORM alliance, an organization created to drive change in the criminal justice system.

And Rubin, 49, also had to protect his basketball credibility and get the most out of another musical superstar who joined 25 children and families at the Well Fargo Center for REFORM Alliance night.

“He’s the only person who likes basketball more than me,” joked Rubin, referring to rapper Lil Baby. “I wouldn’t let Lil Baby outdo me in basketball.”

Make a call

Follow Rubin long enough and you will find that he memorized the story of Meek Mill.

Rubin explains how Mill’s ruling played out in front of the 76ers’ coach Doc Rivers in 2017. He spoke about it in a television interview while Josh Harris, majority owner of Sixers and co-founder of Apollo Global Management, was watching it closely.

“That means he’s going to find out,” said Rubin of Harris’ learning how to give back. “Josh is more focused than ever on giving back to the community.”

Mill, the Philadelphia-born hip-hop star known in the criminal justice system as Robert Williams, was sentenced to 2 to 4 years in prison in 2017 for a parole violation. The ruling attracted national attention, and Jay Z attracted more attention about an unfair system.

In a 2017 New York Times article, he wrote that probation was like a “landmine” and that an “accidental misstep” could have “greater consequences than the crime”.

Williams’ case also caught Rubin’s full attention when Mill invited him to follow the proceedings and “see what happens to blacks when they go to court,” recalled Rubin.

Mill’s story is well documented in a 2018 piece for ESPN’s The Undefeated. The article provides the details of Mill’s entry into the probation system since she was 19 while growing up in north Philadelphia.

Recalling the 2017 verdict, Rubin says, “The smartest thing he ever did was call me.”

In 2019 Rubin joined Mill, Jay Z and sports owners including Brooklyn Nets co-owners Clara Wu Tsai to Start REFORM Alliance. The organization wants to raise awareness of injustices within the criminal justice system. REFORM board members have pledged $ 50 million, according to CNN. And now-former Twitter CEO Jack Dorsey increased that number with his $ 10 million donation in May 2019.

REFORM claims it has collected more since then, but CNBC did not want to provide an exact number. But since REFORM was introduced, Rubin said, 13 bills have been passed in eight states, including California, where the probation period for most violations is now limited to two years.

He added that legislation in Pennsylvania is now at the state Senate level.

According to the US Department of Justice, “Community supervision, “- those on parole or parole – fell from more than 4.1 million people in care to about 3.8 million in 2020. And just for parole, 8.3% the largest annual decrease for those who have been on probation since 1980.

Rubin said REFORM had made “good progress” in repairing a “broken” system.

“We don’t want people to do something smaller like smoke weed to get back to jail,” he added. “It’s a waste of taxpayers’ money and we’re ruining families and hurting people.”

“Mike learned a lot,” Mill told CNBC. “Now he understands the world I come from – where we come from,” he added, referring to this reporter, also from North Philly. “He understands poverty and I think he’s interested enough where he can go at this level.”

Fanatics owner Michael Rubin chats with families affected by unfair probation and probation laws.

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The conversation at the first table

To help raise awareness of REFORM and deliver an NBA Christmas experience, Mill and Rubin worked together to take in 25 children, ages 6-18 who have been negatively impacted by probation and probation violations.

Mill said he called Rubin with a simple request, “Can you help make some children in my ward feel special?”

“The holidays are part of it,” Mill told CNBC. “Young children who don’t have parents in the house may not have a good vacation.”

“Every child here has a mother or father who is currently in jail or has been jailed for a technical violation,” added Rubin. “You did not commit a crime, you went to jail.”

The young participants played a mini scrimmage game before the Sixers Heat game. It was Team Meek Mill versus Team Lil Baby. Rubin came to Mill so that he could compete with Lil Baby for most of the game.

The two dived on the ground for a loose ball, and the Atlanta musician got the most out of Rubin on the jump ball.

“I feel like they tried me,” joked Lil Baby.

Michael Rubin joined rapper Lil Baby in a scrimmage game that featured the kids attending REFORM Alliance night.

Photo: Shareif Ziyadat and Studio 76

When asked why he accepted the invitation to the REFORM event, Lil Baby replied, “I’ve been in some of these situations, so it definitely was for me. I come from that environment.”

The kids also took part in a question-and-answer session with Sixers trainer Doc Rivers and watched Sixers from a suite and the seats in the yard with Mill, Lil Baby and TikTok stars Charli and Dixie D’Amelio fell in the heat.

The children also received gift bags with NBA items.

“So that these kids are here and play basketball with Lil Baby and Meek Mill – we wanted to give them the best day of their lives,” said Rubin.

And the event also served as another opportunity for Rubin to hear more stories about the “broken system”.

During the REFORM dinner with the families, Rubin sat at table 1 and joined Recco Ford Sr., a Philadelphia native who was also sentenced to 2 to 4 years in prison in 2015 for being late for a parole session.

Ford said the conversation with Rubin at table 1 was “surreal” and “motivational”. When asked what he saw when he looked at the Fanatics owner, Ford replied, “I see someone who has a lot of influence and gives back and takes the time to help.”

A group photo taken at the REFORM Alliance night in Philadelphia.

Photo: Shareif Ziyadat and Studio 76

“This is a time to make real change in this country and I feel like the organization is at the forefront of that change,” said Robert Rooks, CEO of REFORM. “The business side of it: How can we do more of these events and stand up for our loved ones in the community.”

Back to business

After the scrimmage was over, Rubin retrieved his phone, but nothing significant had happened during the game.

MLB, Fanatics’ biggest sports customer, is still on hold. The chatter on Wall Street was slow, and the $ 18 billion company was doing fine.

“Eight text messages and only nine emails – it wasn’t as bad as I thought,” said Rubin. “I will go back [to New York] I’m more excited about this event than anything I’ve done in the business world today. “

When the fun was over and asked what he saw when he looked at Michael Rubin, Lil Baby replied, “A businessman all day, every day. And that’s why we click.”

Told Lil Baby calls him “my older guy,” laughed Rubin.

“He will call me and ask a lot of different things. ‘What do you think of this company? Should i invest? Shouldn’t i invest?

“He was in prison five years ago and is now one of the greatest artists in the world,” added Rubin. “His values ​​are insane.”

When asked what his Wall Street colleagues would like to take away from the REFORM Alliance event, Rubin urged them to give something back.

“When you talk about people on Wall Street, you are talking about people who are generally better,” said Rubin. “You have a responsibility to make a difference.

“Meek is lucky and I’m lucky,” added Rubin. “It is our responsibility to give back to our communities. Anyone lucky enough to be in a good position and not giving back is not a good person.”

$18 billion retailer Fanatics prepares for IPO — here is what’s subsequent for the corporate

Fanatics Founder / Executive Chairman Michael Rubin attends the Fanatics Super Bowl Party at the College Football Hall of Fame on February 2, 2019 in Atlanta, Georgia.

Mike Coppola | Getty Images

Sports merchandising company Fanatics shocked the sports world last month after securing trading card rights to Major League Baseball, the National Football League and the National Basketball Association.

Especially Fanatics’ deal with MLB ended the league’s decades-long partnership with Topps and possibly caused the end of Topps’ plans to use a SPAC Mudrick Capital Acquisition Corp. II. It also sent Topps owners and former Disney CEO Michael Eisner back to the drawing board for reflection the next train – if there is one.

Panini, which had the NFL trading card license since 2016 and the NBA license since 2009, is also losing the rights to Fanatics.

The series of deals shows how Fanatics, under CEO Michael Rubin, plans to expand beyond sportswear into collectibles, sports betting and even broadcasting games. It has already attracted well-known investors like Jay-Z to come with his $ 18 billion private valuation before an expected IPO.

Here you can find out how Fanatics landed the partnerships and what this means for the future of the company.

Fanatics add another piece to the puzzle

Rubin’s move ends some historic sports partnerships that the NBA has already proven not to be set in stone. In May 2020, the NBA has dropped basketball maker Spalding, a partner for more than 30 years and associated with Wilson to make its basketballs.

Sports leagues like Fanatics’ moat around its products, and the company is already affiliated with most leagues and teams to make soft goods and hard goods, including sports jerseys. The pandemic forced all leagues to review deals to maximize profits after suffering significant losses. Fanatics also had to rethink their business as live sporting events were suspended at the start of the pandemic.

According to people familiar with Fanatics’ plans, the company considered expanding last summer to add more pillars to its operations. Fanatics already dominates vertical and e-commerce in sports, mostly with all of its MLB rights. But it also saw an opportunity in the trading card market.

Fanatics declined to comment on this story.

Topps trading cards are arranged for a photo in Richmond, Virginia.

Jay Paul | Bloomberg | Getty Images

The business with sports trading cards should reach $ 98.7 billion by 2027, according to Verified Market Research. In 2021 the industry was particularly active, with a 1914 baseball card from Babe Ruth to set a record. Even Luka Doncic’s rookie card set an auction record.

Entering the trading cards business is also in line with Fanatics’ plans to build its name in the NFT collectibles space via Candy Digital. To secure the new deals, Fanatics provided the leagues and player unions with equity capital that is guaranteed to generate at least 1 billion US dollars in sales over the duration of the partnerships. Leagues have no equity in their current trading card company dealings.

Fanatics’ plan for the physical trading card space is to expand it by opening up the market to take greater advantage of it through direct offers to consumers, according to those familiar with the matter. For example, when collectors buy a trading card, they can insure, value, store, and even offer the asset for sale or barter on a marketplace – all through Fanatics. The company would likely charge transaction fees, and leagues will also get valuable data they crave.

Speculation on Wall Street suggests Fanatics will also try to buy one of the trading card companies. Panini is valued at $ 1.3 billion, according to PitchBook, and there are other companies, Upper Deck and Leaf Trading Cards based in Texas.

The competition’s takeover would be similar to a takeover Fanatics completed when it bought it in 2017 VF Corp ‘s licensed sports group for approximately $ 225 million. That deal included the Majestic Athletic brand and came right after Fanatics took over the MLB apparel rights from Majestic.

Robert Kraft, Jay-Z and Mike Rubin attend Michael Rubin’s Fanatics Super Bowl Party at the Loews Miami Beach Hotel on February 01, 2020 in Miami Beach, Florida.

Kevin Mazur | Getty Images

Still business on the table

Fanatics also wants to be valued in the $ 40 billion American online gambling room through sports betting, sources said.

The company did Headlines according to plans, the entry into the New York sports betting market arose. Fanatics feels it can bring its 80 million user base tied to its sports merchandising company to a sports betting offering. If it works, Fanatics can lure Sportwetter to its platform and combine offers from its merchandise catalog as a reward for customer loyalty.

But fanatics have to buy an established sportsbook to enter the room.

Industry talks connected Fanatics and online casino operator Rush Street Interactive, which operates sports betting through its SugarHouse property. But sources told CNBC that Fanatics was not interested in the takeover. Rush Street is traded under the ticker on the New York Stock Exchange RSI symbol and has a market capitalization of $ 2.6 billion. Rush Street declined to comment.

It’s unclear who Fanatics is targeting, but it will have to show its hand on that front at some point as sports betting laws require.

Rubin’s company has made no secret of being a global powerhouse with various offers in the digital world. Fanatics wants to participate in sports media rights, games of chance, revised ticket models, memorabilia, NFTs and now also trading cards.

And while business goes on, an IPO awaits.

In sports betting circles, it is not a question of whether but when fanatics go public. Fanatics scored his $ 18 billion Evaluation after taking up additional funds. It also starts a China operation after a Investment from entertainer Jay-Z. MLB and NFL were already partners, and SoftBank gave Fanatics cash from its $ 93 billion Vision fund.

Barrett Daniels, a partner at global accounting firm Deloitte, said that companies similar to positioning Fanatics and securing big deals typically seek public offers sooner rather than later.

Daniels, who serves as Deloitte’s national IPO co-leader and heads the SPAC Western region, said companies with status like Fanatics have decided to go public to “reward and share in this success to be able to. This is a big driver and an important piece of the puzzle. And there are some companies that feel they are the dominant player in their field, they need to be public. “

Though an IPO might be involved, Daniels added that staying private is no longer as taboo as it used to be.

“You used to go public when you hit about a billion dollars, but these days there doesn’t seem to be a limit,” Daniels said. “Companies keep getting bigger in the private market and staying private. And there is still a lot of money in the private markets.”

Trevor Lawrence reaches take care of Fanatics over memorabilia rights

Trevor Lawrence is the favorite, ranked # 1 overall on the NFL Draft, and wins a contract valued at nearly $ 37 million.

Ezra Shaw | Getty Images Sports | Getty Images

Add fanatics to the sports companies partnering with quarterback Trevor Lawrence.

The e-commerce giant announced a multi-year deal on the rights to Lawrence’s collectibles on Friday, the day after the 21-year-old Clemson star was selected as number 1 on the National Football League draft. Fanatics will be selling autographed Lawrence items from his time at Clemson and now with the Jacksonville Jaguars for the NFL. Financial terms of the agreement were not specified.

The list of fanatics memorabilia, including NFL quarterback Tom Brady, National Basketball Association striker Zion Williamson, and WNBA star Sabrina Ionescu.

“I’m very excited to be joining the Fanatics team, especially since they are based here in Jacksonville,” said Lawrence in a statement, adding that he “wants to give fans even more access to the game through memorabilia and exclusively signed items.”

Victor Shaffer, Executive Vice President of Fanatics, added, “We look forward to providing fans in Jacksonville, Clemson and beyond with an unparalleled shopping experience and opportunities to celebrate both his college days and the beginning of his NFL career . “

The Fanatics deal is officially Lawrence’s first as an NFL player, but it’s already tied to companies like sports drinks maker Gatorade, Adidas, and a cryptocurrency company. Block folio. After Lawrence was drafted, the company presented him with $ 25,000 that was held in a crypto account.

Quarterback Trevor Lawrence prepares for a throw during Jordan Palmer’s QB Summit NFL Draft Prep at a park on January 25, 2021 in Orange County, CA.

Aubrey Lao | Getty Images

The Jaguars turn to Lawrence to revive a franchise that has only made the playoffs twice since 2007. The Union fired Coach Doug Marrone, who last led the team to the postseason in 2017 and replaced him with longtime college coach Urban Meyer.

Lawrence was the first of five quarterbacks drafted in the first round. The New York Jets, followed by BYU’s Zack Wilson, and the San Francisco 49ers designed North Dakota State’s Trey Lance with the third overall win.

Chicago picked Ohio State’s Justin Fields 11th overall, and the New England Patriots ranked Alabama’s Mac Jones 15th. It’s the sixth year in a row that at least three quarterbacks have been drafted in the first round.

The NFL draft will continue over the weekend, with rounds two and three on Friday and four through seven on Saturday.