How Fanatics and MLB plan to keep the trading card boom going

Fanatics made waves in the sports and collectors industries when they snatched the rights to manufacture Major League Baseball trading cards from incumbent Topps in August 2021, ending a partnership that dates back to 1952. The sports platform company provided another major boost last January when it acquired Topps outright for around $500 million.

Now, after releasing its first major Topps set to kick off the 2023 MLB season, Fanatics is beginning to show how it plans to expand the trading card and collectibles space.

“Fanatics is focused on providing the best fan experience and Collectibles is focused on providing the best collector experience,” said Mike Mahan, CEO of Fanatics Collectibles. “That means having the most innovative, thoughtful and authentic products possible.”

Mahan, who joined Fanatics in June to lead the company’s trading card and digital collectibles business after serving as CEO of Dick Clark Productions, said, “The 2023 collector’s experience will be the best collector’s experience ever, and 2024 will be even better.”

That belief is driven by Fanatics Collectibles’ past key areas of focus, Mahan said: educating and better engaging new collectors in the hobby, expanding marketing around collectibles, enhancing the existing ecosystem and collector experience, and innovation.

Beginners play a big role in increasing baseball card value

Innovation fueled one of the new initiatives Fanatics is adding this year around one of the biggest points of excitement and value for card collectors: the debut cards of highly acclaimed newcomers.

“One of the key questions we were trying to answer was how do we get maps to really capture the big moments,” Mahan said. “Baseball cards have been about the rookies for so long, so if rookie cards are the greatest thing in the sport, how do we make the best card possible? How do we bring this moment closer to people?”

This led to the development of MLB Debut Patches, which Fanatics touts as the first-ever memorabilia made specifically for inclusion on trading cards in partnership with a professional sports league. In partnership with MLB and the MLB Players Association, every player making his debut this season will have a patch on his jersey. Post-game, the patch will be authenticated and placed directly on the Rookie card in a future Topps set.

MLB Chief Revenue Officer Noah Garden said that these are the kinds of things that will continue the momentum in collectibles and trading cards.

“It’s that emotional connection that drives the hobby and brings fans closer to the game,” said Garden, who describes himself as an avid baseball card collector. “You want to feel part of the game, and what better way to do that than to have something that was actually part of it?”

While the sports trading card industry had grown in recent years, the pandemic kicked the hobby into high gear. Cards for all sports sold for record prices, including a $12.6 million sale for a 1952 Topps Mickey Mantle Rookie card, the highest-ever for a trading card.

According to data provided to CNBC by online visibility management SaaS platform Semrush, US Google searches for “the best sports tickets to buy now” increased by 680% between January 2020 and February 2023. During the same period, average monthly visits to Topps.com in the US rose 218.5% to nearly 1.2 million, data from Semrush showed.

But even as other collectibles that have boomed during the pandemic, like NFTs and Funko Pops, have fallen out of favor, trading cards have tried to maintain their momentum.

Jeff Owens, editor of Sports Collectors Digest, the largest trade publication for sports trading cards, said the hobby’s resurgence was “primarily due to a resurgence in buying and selling during the pandemic and a large group of wealthy investors looking for alternative assets .”

The slowdown in the economy caused the modern card market to contract over the past year, but values ​​and demand are still “well above” what they were before the pandemic, Owens said, adding that the vintage card market is struggling like the Mantle rookie card is “very, very strong.”

Owens also noted the growth and support for card shows in the US – nearly 1,000 are planned for 2023, a significant increase compared to previous years.

Mahan said that from Fanatics’ perspective, “it’s a very strong time for the hobby right now.”

According to data from Verified Market Research, the global sports trading card market is valued at $44 billion and is projected to approach $100 billion by 2027.

“We firmly believe that the best days are yet to come; we can’t control the overall economy, and as with any consumer product, there’s some correlation with broader spending, but go to a card showroom or a store now, that’s a very vibrant and healthy market,” Mahan said.

When Topps considered going public with a SPAC deal that would take it to $1.3 billion in April 2021. That SPAC deal was later called off after Fanatics acquired the MLB rights, ultimately leading to the company’s acquisition by Fanatics led.

Mahan declined to comment on Topps sales today, but said “the business and the industry continue to be in a great, great place.”

For MLB, the return of trading cards has also been a boon, which Garden says parallels video games or other ways the league tries to attract new fans and turn casual fans into diehards.

Garden noted fans like his son, who is an avid baseball fan but may not know every player on a west coast team other than his stars. “When these players start breaking through nationally, you already know who to look for,” based on the rookie cards and other cards in the set, he said.

“The importance of cards in the development of fandom has always been important to me,” Garden said, noting that that’s how he got into baseball. “But the company hadn’t seen any innovation in ages and in many ways it had become more difficult to collect… what Fanatics has done so far to innovate the product and support the ecosystem has been just fantastic.”

While MLB cards remain the crown jewel for Topps, Mahan said Fanatics is excited about what the future holds for not only baseball cards but the other rights the company holds, including the ability to host NBA and NFL games in the future. Cards to produce years.

“The good news is that trading cards and sports cards have been alive for a long time, they’ve been important for a long time, they’ve been meaningful for a long time,” Mahan said. “It’s a business that has traditionally been cyclical and had its ups and downs, so I would tell you that we are focused on education, innovation, marketing and community and bringing all of that together – given where we sit today, all those good ones things are yet to come, we feel our best lies firmly ahead.”

Earlier this year, Fanatics hired former ones snap Nick Bell, Global Head of Content and Partnerships, is leading his new Fanatics Live business, which will focus on building a digital shopping experience for customers to purchase trading cards and other collectibles through curated and personality-driven content and entertainment.

Bell told CNBC that one of the first focuses of this new business will be “breaking,” a form of social trading card buying. Similar to a blind lottery, a set number of people buy an entry from a seller – called a “spot” – and the seller then opens a whole box of trading cards live online and assigns each of them. Fanatics would get a cut of every ticket sale.

According to CNBC, Fanatics raised $700 million in December to bring its valuation to $31 billion, capital it planned to use for potential merger and acquisition opportunities in its collecting, betting and gaming businesses.

The company estimates that its revenue for Fanatics, including its Lids segment, will be approximately $8 billion in 2023.

A three-time CNBC Disruptor 50 company, Fanatics was ranked 21st in 2022.