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  • Writer's pictureThe San Juan Daily Star

Will Fanatics upend the world of sports collectibles?



Michael Osacky, who appraises the conditions of cards, at the Chicago Sports Spectacular at the Convention Center in Rosemont, Ill., on Nov. 18, 2023. Powered by its connections with leagues and star athletes, Fanatics, the merchandising giant has entered the hobby universe with deep pockets and sharp elbows. Not everyone is happy. (Jamie Kelter Davis/The New York Times)

By Jordyn Holman and Ken Belson


On the Saturday before Thanksgiving, thousands of people filed into a dated convention center in Rosemont, Illinois near O’Hare International Airport to participate in the very American pastime of buying and selling sports trading cards.


The Chicago Sports Spectacular, one of the country’s biggest and oldest card shows, is like a rummage sale from the days before eBay, but with way more money involved. The 400 or so collectibles dealers set up well-worn cardboard boxes packed with cards of various players past and present from various sports, their prices handwritten on Post-it notes: $45 for a Luka Doncic card, $100 for Zion Williamson and so on.


To get inside, collectors paid a $15 cash-only admission fee, then spent hours lugging briefcases and wheelies through the maze of tables stacked high with cards. They rifled through boxes and piles of merchandise looking for rare finds such as signed Mickey Mantle baseballs and Michael Jordan rookie-year cards as they tried to cross items off their wish lists.


The eclectic — some could argue eccentric — dealers kibitzed about business trends and marveled about how quickly kids’ interests were changing as groups of boys sat on the floor showing off their favorite cards.


These very analog shows have been the backbone of the multibillion-dollar hobby, as people involved call it, for decades. But this musty corner of the sports retail world may soon be completely upended.


The company Fanatics, which already dominates the sports merchandise world through its deals with professional leagues and its sales of replica jerseys, has entered the fray with big money, sharp elbows and Hollywood gloss, signing stars such as Tom Brady and LeBron James to exclusive deals. Its aim is to entirely revamp the sports collectibles universe.


Two years ago, Fanatics reached a deal to become the exclusive trading card partner of MLB and the baseball players union. It then bought Topps, the iconic trading card-maker, for roughly $500 million, becoming a kingpin in an industry worth an estimated $44 billion, according to Verified Market Research.


“This is an industry that’s lived in the shadows, for all intents and purposes, and now we’re bringing a degree of prominence and relevance to it, and making it cool, fun and exciting,” said Mike Mahan, 47, who leads Fanatics Collectibles, the company’s trading card division, and has been traveling to shows such as the one outside Chicago. “We want this to be something that everyone’s excited to be a part of, whether you’re a collector, whether an athlete, whether you’re a shop owner.”


Fanatics’ entry has unnerved many in the trading card universe. But Chris Keller, a collector and shopkeeper in Elgin, Illinois, said he had long thought the memorabilia world was ripe for disrupting.


To achieve preeminence in collectibles, Fanatics is using the same playbook it did to dominate the sports apparel world: purchasing key pieces of the industry ecosystem; flexing its connections with athletes, leagues and influencers; and pushing aside those it sees as impeding growth.


Fanatics works closely with sports leagues, which invested hundreds of millions of dollars in the company. It created new products with the leagues and became more of a just-in-time supplier of licensed gear, allowing it to react quickly when players emerge as stars. But growth in this merchandising business has slowed — one reason Fanatics is pushing into the collectibles industry.


In the collecting world, Fanatics has tried to cut out middlemen to reduce costs. Topps now sells directly to almost 700 hobby shops, up from 180 before Fanatics bought it. Fanatics also purchased a leading card printer, GC Packaging, it says to improve quality and reliability, and bought the second-largest online marketplace for cards, PWCC.


As Fanatics consolidated the merchandise industry, scores of small shopkeepers were boxed out. Now hobby shop owners, distributors and competing card companies wonder if Fanatics will try to corner a swath of the card market so it can drive up prices. Lawsuits have ensued.


The most prominent involves Fanatics’ main competitor, Panini, which has deals with the NBA and the NFL that expire in 2025 and 2026. Before those agreements could be renewed, Fanatics swooped in to sign its own long-term deals with the leagues.


In August, Panini sued Fanatics. It claimed that having exclusive deals with the three biggest leagues — MLB, the NBA and the NFL — would stifle competition and innovation and violate antitrust laws. The Fanatics deals mean Panini won’t be able to sell cards that feature league or team logos, which could make the cards look more generic and less attractive for collectors.


Panini also claimed that Fanatics poached its top executives in violation of their contracts and bought GC Packaging, which Panini uses, to strangle its supply.


“Fanatics’ acquisition of control over GCP has given Fanatics control of Panini’s lifeblood — the production of nearly all its trading cards,” Panini said.


Fanatics denied the claim and said delivery times had improved since it bought the printer.


Fanatics countersued, accusing Panini of fraud, shoddy production and poor customer service. Fanatics said that signing long-term exclusive deals with leagues was precisely what Panini had done.


“They sued us for the very things they succeeded in doing over 15 years ago — present a more compelling model for sports properties and win rights from the incumbents,” said Michael Rubin, Fanatics’ founder and CEO. “The industry needed significant change and innovation, and they are now viewed as antiquated.”


The trash talking in court has turned into a battle of competing visions for the sports memorabilia industry.


“Fanatics is going to take over the world,” said Michael Osacky, who appraises the condition of cards, a niche that for now is insulated from the showdown. “Some people would say maybe that’s not a good thing. I think it’s a good thing. I think this hobby needs innovation, new ideas. For too long, it’s the same old, same old.”


Card collecting may be a hobby, but it is also a fragmented industry punctuated by booms and busts. In the 1990s, manufacturers flooded the market with cards, prompting prices to collapse. In the early part of the pandemic, prices surged, as collectors had more time to chase wish-list cards. The market has cooled some, but it remains strong.


Some shopkeepers view Fanatics suspiciously because of its potential power, but Keller has embraced the upheaval. Early to explore the digital possibilities for his trade, he has been promoting and selling cards on YouTube since 2011. Live breaking, as the practice is known, involves sellers opening cases, boxes and packs of cards online while people watch to see what’s inside and perhaps purchase them during the stream. In 2020 and 2021, when many stores were shut, it became a lucrative way for entrepreneurs and card shop owners to generate revenue.


Live breaking is also among the ways Rubin hopes to transform what he sees as a staid industry. Last summer, he unveiled Fanatics Live, an online platform to compete with live breaking on YouTube, Facebook, Whatnot and others. Unlike those on other sites, breakers on Fanatics Live get boxes of cards directly from Fanatics.


“The thing that I’m most excited about is, the idea is three years old,” said Rubin, 51, adding that Fanatics Collectibles generates north of $1 billion in revenue. “We took our first sale in ’22, and we’ve done so much in less than two years. But I think we’re, like, 10% of this journey, 20% of this journey. So, there’s so much innovation coming.”


Hobby shops, though, remain the core of the card world, and shopkeepers are adjusting to Fanatics in different ways. Mike Calvanico, who has owned a shop in Lyndhurst, New Jersey, for 40 years, focuses on selling boxes and cases of cards, not single cards. Successes to him are card series that have high resale value. Lately, he said, Panini, not Fanatics, has issued more cards that have been a hit with his customers.


“Panini could have rolled over when Fanatics came in, but they care about the stores, the public,” he said. “The guys in the production development at Panini are the ones putting food on my table.”


Back in Chicago at the trading card show, many hobby shop owners told Mahan that they looked forward to seeing Fanatics bring celebrities and athletes in their doors to help draw more customers. It’s one of several refrains Mahan hears while on his listening tours around the country.


At the shows, Fanatics executives have also become familiar to avid collectors such as Sean Doroudian, founder and former CEO of a financial services company who has spent more than $1 million on trading cards in the past few years.


Doroudian told Mahan that he looked forward to when Fanatics would release more basketball cards. “I can’t wait, and I hope for one day you guys have the licensing deal,” he said.


Mahan quickly cut in.


“It’s not a hope,” he said.

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