Fanatics Acquires Topps In $500M Deal, Months After Landing Licenses Away
A new trading card giant is taking shape with an acquisition of one of the most well-known brands in the space. The acquisition comes from a company that became their biggest competitor and cost the company the opportunity to go public with a big payday.
What Happened: Sports e-commerce company Fanatics is acquiring Topps, the trading card company. The deal terms were not disclosed with industry sources estimating a valuation of $500 million, according to Sportico.
The new valuation for Topps is a steep decline from the $1.3 billion tag put on the company when it announced a SPAC merger with Mudrick Capital Acquisition Corporation (NASDAQ:MUDS) in April 2021.
The acquisition doesn't include the confection and gift card business lines from Topps according to sources, which could have impacted the purchase price.
Fanatics has over 80 million customers and is the world’s largest seller of licensed sports apparel.
Related Link: Fanatics, Michael Novogratz, Gary Vee Team On NFT Platform
Why It’s Important: Topps has been the producer of Major League Baseball cards for years and has the rights with MLB through 2022 and MLB Player’s Association through 2022.
Fanatics announced it landed a new deal with Major League Baseball in August, ending a 70-year run of Topps making MLB cards. Topps was given a chance to match the terms of the deal but did not.
With the acquisition, the new combined company has the rights to MLB and will also have rights to Major League Soccer, Formula 1 and several soccer leagues via Topps’ existing rights. Fanatics has been active in acquiring trading card rights across leagues. The company grabbed the rights to NFL and NBA trading cards in 2021 with deals that gave equity in the company to the leagues and player’s associations.
Panini, which was rumored to go public with SLAM Corp (NASDAQ:SLAM) in a SPAC merger, lost the NBA and NFL deals to Fanatics in a similar fashion Topps saw with MLB trading card rights.
Fanatics plans on expanding the digital trading card business with its history in the direct-to-commerce space. Fanatics is also expanding in the non-fungible token space and announced a partnership with Michael Novogratz and Gary Vaynerchuk called Candy Digital in 2021. Candy Digital has exclusive rights to MLB and its 30 teams for NFTs.
Topps had revenue of $567 million in fiscal 2020, up 23% from the previous year. The company saw revenue split 55% physical cards, 6% digital cards, 4% gift cards and 35% confections.
Fanatics is privately owned and had a valuation of $18 billion in 2021. The company could be a strong candidate to go public in the future and would bring a company with exposure to trading cards, non-fungible tokens and sports memorabilia to investors.
Photo: Mick Haupt on Unsplash