The mighty have fallen; MLB ends 70-year partnership with Topps, IPO now in jeopardy.

Since the pandemic, the craze of sports cards has been at an all-time high. Kids are trading cards anymore, it's young and older adults making some serious money on cards that have been lying around or opening new packs on social media and finding Luka or Giannis grade-10 cards.

It’s been a big topic on the “Beers, Business, and Balls” podcast for a few topics, including with Scott Greenberg, who is the CEO and Co-Founder of StarStock Inc., a marketplace for sports trading card buyers and sellers; customers list the cards on a portal, ship them to a secure vault, and earn money as a player’s “stock” rises. StarStock has over 800k cards in the vault, 600k traded and adds 50k cards to its site every week.

The world of sports cards is about to make a major shift. In a surprise move, which shows the evolution of the game, the sports apparel company Fanatics is set to be the new official partner of the MLB in terms of manufacturing trading cards.

ESPN reported Friday morning citing a memo for the MLB Players Association, that “an unnamed Fanatics-founded company will be the exclusive licensee "in the baseball card category." This license gives Fanatics the power to manufacture the only cards that can show team logos”.

Per the Wall Street Journal, the deal also includes the National Basketball Players Association and the NFL Players Association, who along with the MLBPA will have equity in this new venture, as will MLB and the NBA. The players clearly had a say in this new deal, as it is reported to be 10x-14x larger than any other deal MLB and the players have ever agreed to. Per the MLBPA's annual report, Topps paid the MLBPA $20.4 million in 2020 licensing fees, the largest sum from any MLBPA licensee and up roughly $1.67 million from 2019. Wonder how much Fanatics is shelling out to secure this one? Now, Topps’ license has a year before it expires (2022), but these implications will hurt the company in many ways. Not only is this a big blow to Topps’ business model, but it also causes a major shake-up in their future plans.

Topps, which had been publicly traded before being taken private in 2007, retains licensing deals with Major League Soccer and the National Hockey League. However, back in April, it was announced that Topps would be going public. They reached a deal for their IPO with a SPAC investor (Mudrick Capital), a deal valued at over $1.3 BILLION. Mudrick Capital Acquisition Corporation II said its SPAC merger with The Topps Co. “has been terminated by mutual agreement”. Former CEO of Walt Disney Company and current chairman of Topps, Michael Eisner, has not responded yet. With baseball out of its portfolio, Topps will only have soccer (MLS, Bundesliga, and UEFA Champions League) cards and NHL stickers ( Upper Deck is still the exclusive license holder for NHL cards.). Meanwhile, Fanatics isn't done with their moves.

Did Topps blow a 70-year lead?

Will Fanatics produce NFT’s instead of trading cards in the near future?

Will your baseball cards in a box in the basement be worth tripled and become archives or are they worthless now?

We don’t know yet but more to come.