Topps to sell sports cards business to rival Fanatics

Topps, the company that associated Bazooka chewing gum with baseball cards over half a century ago, is now part of a growing sports memorabilia empire that has nearly wiped Topps out of the baseball card game. .

On Tuesday, Topps announced that it had sold its sports cards business to Fanatics, a 10-year, multibillion-dollar company whose licensing business relies on sports fandom, technology and networks. The deal values ​​Topps’ sports and entertainment division at just over $ 500 million, according to people with knowledge of the situation, speaking on condition of anonymity because the information is confidential.

Topps previously announced an agreement to go public. But in August, the company was taken aback when it lost its licensing deal with Major League Baseball and Major League Baseball Players Association to Fanatics, putting its future in doubt. Fanatics and Topps began discussing acquiring Topps’ cards business about a month after Topps lost the baseball contract, a person familiar with the situation said.

“Topps is synonymous with card collection – it’s the number one brand people think of when they think of baseball cards and sports cards,” said Chris Ivy, director of sports auctions for Heritage Auctions. “So the fact that they keep moving forward, I think that’s a good thing both for collectors and for the industry as a whole.”

The Topps deal reflects Fanatics’ purchase of clothing company Majestic, which it acquired after winning the rights to manufacture major league uniforms, contracts Majestic had previously won. The deal announced on Tuesday also underscores the breadth of businesses that Fanatics has started that meet the professional sports industry’s desire to expand beyond ticketing and television, both of which are difficult to grow quickly. The leagues are looking for new sources of revenue, including advertisements on legalized sports jerseys and gambling – and trading card licensing deals.

The Topps playing card business may not immediately transform under its new owner. Topps cards will always carry the Topps logo and the approximately 350 employees of the division will work independently for the Topps brand within Fanatics. But in the longer term, Fanatics hopes to create for Topps the digital agility that has helped transform their licensed clothing business, which is designed to respond quickly to rapid changes in an athlete’s popularity.

Fanatics launched its playing cards business last year, around the same time it made deals with unions for NFL and NBA players to produce football and basketball trading cards. -ball. The company raised $ 350 million in September in a deal that valued it at more than $ 10 billion. With the acquisition of Topps, Fanatics has the right to design, manufacture and distribute baseball cards from now on. (The fanatics ‘initial deal with Major League Baseball and the players’ union resulted in a departure in 2026.

Michael Rubin, CEO of Fanatics, called collectibles and collectibles an “important pillar” in the company’s plans to become a “leading digital sports platform”. Mr. Rubin, whose entourage includes Jay-Z and baseball commissioner Rob Manfred, has created a licensing and manufacturing company valued at $ 18 billion over the past decade. Beyond hoodies and hats, Fanatics has also started gambling and video game businesses.

His bet on collectible cards reflects pandemic interest in memorabilia as nostalgic investors have found themselves on edge. In January, a Mickey Mantle card sold for $ 5.2 million. In August, an Honus Wagner card sold for $ 6.6 million. In October, a Michael Jordan card sold for $ 2.7 million.

Topps rode this wave, achieving record sales of $ 567 million in 2020, a 23% jump from the previous year. Now Fanatics is faced with the question of whether it can maintain its momentum given the collectible card industry’s susceptibility to booms and recessions.

The almost century-old Topps has gone through both. The company was founded in Brooklyn in 1938 as Topps Chewing Gum, with the goal of reviving a struggling family tobacco distribution business. A little over a decade later, he started wrapping his gum with “magic photo cards,” featuring Babe Ruth, Cy Young and other baseball stars. He started his annual baseball card game in 1952.

In 2007, Topps was acquired for $ 385 million by Tornante, an investment firm founded by Michael Eisner, the former CEO of The Walt Disney Company, and private equity firm Madison Dearborn Partners. Under its new owner, Topps launched Topps Now, which sells cards of the moment to capture a defining piece or pop culture meme. It has also started to offer its cards in the form of NFT.

Mr Eisner said in a statement Tuesday that “the strong emotional connection between Topps collectibles and consumers of all ages” would make them “a gem in the Fanatics portfolio.”

Topps’ plan to go public had valued its entire business at around $ 1.3 billion. This deal included its confectionery brands like Bazooka Gum and its gift card business, which Tornante and Madison Dearborn continue to own. The candy and gift card unit made a third of Topps sales last year, according to an investor presentation prepared for the deal. It was renamed Bazooka Companies.

Tornante also owns the rights to produce movies and TV shows based on the Topps brands, including the MechWarrior / BattleTech video game franchise and Garbage Pail Kids, a sticker collectible card series introduced in 1985 as a parody of Cabbage Patch. Kids.

Kevin Draper and Catherine rosman contributed reports.

Comments are closed.