Monday, August 23, 2021

A Few Thoughts on Fanatics Acquiring the MLB/MLBPA LIcense.

By now, unless you've been living under a rock, the biggest news story in the century plus history of sports cards broke last week.  Major League Baseball and its Players Association have granted their exclusive trading card licenses to a new company to be formed by the sports licensing and e-commerce juggernaut Fanatics, Inc.  The MLBPA will have equity in this new scheme, along with MLB, which previously (along with the NFL) invested in Fanatics years ago.  As I write this, Fanatics has just acquired the exclusive NBA and NBPA licenses, and as with the baseball deal, also includes equity for the league and PA.  It is expected, sometime shortly, that the NFL and the NFLPA will follow suit.

The MLBPA's current Group Licensing Agreement with Panini America expires at the end of 2023, while MLB's with Topps is through 2025.  Meaning, for the next few years anyway, Panini will continue to produce partially-licensed baseball cards, as they have since 2011, while Topps will continue to print fully licensed baseball cards until at least December 31st, 2023.  

As for 2024 and 2025, Topps has always operated differently when it comes to player acquisition.  Because they predated that establishment of the MLBPA, they've always been exempt from their Group Licensing Agreement -- a blanket agreement that gives access to all players currently on a 40-man Major League roster, who are also PA members.  By signing players to individual contracts (so-called "steak dinner checks"), this gave Topps a competitive advantage over their competition by allowing them to produce the first MLB-licensed trading cards (and therefore Beckett Definition "Rookie Cards") of dozens of Minor League prospects -- a loophole they exploited to great effect with their Bowman brand in the mid-90s and early-2000s, until the establishment of the current Rookie Card rules in 2006.  They have missed a few players. (Alex Rodriguez did not appear on a Topps card until 1998.  And in recent years Matt Wieters, Ichiro, and Madison Bumgarner have let their Topps contracts expire.)  It is currently unclear if Topps will still be allowed to sign MLBPA members to Steak Dinner Checks, and include big leaguers in what will still be MLB-licensed products for 2024 and 2025.

I'll get to what this means later, but as of now, Panini America will be out of the licensed baseball card business on December 31st, 2023.  The next day, Fanatics will assume Panini's MLBPA license and produce their first partially-licensed baseball cards in 2024.  Topps will continue to make fully licensed baseball cards for 2022 and 2023.  For 2024 and 2025, Topps may or may not be allowed to continue printing fully-licensed baseball cards, but they'll still have the MLB license.  On January 1st, 2026, Fanatics will acquire Topps' MLB license and will be the exclusive licensor from then on.