MLB to Topps: Buh-bye

[mpcincal]

As one who once a big baseball card collector, this really shocks me: MLB will drop Topps as its baseball-card licensee after 70 years and sign an exclusive agreements with Fanatics.

https://www.cnbc.com/2021/08/19/mlb-will-end-long-time-deal-with-trading-card-company-topps.html

Terrible timing for Topps: They're planning to go public later this year.

I used to work for Upper Deck, one of Topps' competitors when about five companies put out cards, and although we had a bit adversarial attitude about them when I was there, I can't imagine a world without Topps cards. I guess nothing lasts forever and big business has no room for sentiment.

 

[Songbird]

Topps for life.

 

[wicked]

WSJ News Exclusive | With a Frenzy of Deals, Fanatics Swoops In to Reorder the Trading-Card World

 

[Scout]

I can’t read all of it.

So if I want an Ohtani, for example, in 2026, the only way to get a card of him is through Fanatics or will Topps still have a 2026 Ohtani?

This seems like 1983 all over again and greed imploded all the others. Topps knows the game.

 

[The Big Ragu]

Fanatics will have an exclusive license. Same way Topps has had one. They'll be the only ones allowed to use MLB logos and the players images. Therefore, they'll be the only ones able to make and sell cards.

I'll go out on a limb and guess this backfires for everyone involved. ... except for Topps.

I may be way wrong about how I am guessing it plays out in the future (won't be the first or last time), but I was fleshing this out in my head this morning.

From MLB's perspective (and the players association) all they seem to care about is a licensing fee today, even though that may turn out to be shortsighted in the future. They were able to get way more money out of Fanatics than they were able to get out of Topps, and on top of it, Topps is old and stodgy and Fanatics has its eye on things like NFTs, and got that license from MLB too.

What I am guessing, though, is that Fanatics is going to be into an exorbitant licensing fee, and they are going to have trouble monetizing the license enough to make it work for them. By going for a buck today, MLB is going to do damage to the category. Cards are going to be too expensive for kids; they will be speculative vehicles that are in a frenzy today but are not likely to stay that way and will eventually end up with little interest. And MLB will lose the value and familiarity of a Topps card that has also served a marketing vehicle for their product.

Topps, on the other hand, probably sees the handwriting on the wall that cards were becoming anachronistic anyhow in a digital world, so it was not worth what MLB and the PA wanted for the licenses to them. It may have been the smart move. What Topps does have, though? A lot of intellectual property, old card designs, and the ability to market things related to their vintage cards for which there really is collectible value due to true scarcity. ... In the end, that vintage stuff may end up being the only things that actually end up having value within that industry and category.

 

[Scout]

You’re right.
There is also a dark age of cards, 88ish to 2015ish where Topps could redo and recreate sets that are worthless because of over production.

Not reprint the same cards, but redesign them and repackage them.

 

[nickp]

Topps is going to have to lean on soccer and entertainment now

 

[playthrough]

You’re right.
There is also a dark age of cards, 88ish to 2015ish where Topps could redo and recreate sets that are worthless because of over production.

Not reprint the same cards, but redesign them and repackage them.

Yep, I've got a large plastic tub of Topps, largely mid-80s to 1992 (when I went to college and stopped collecting), that I don't have the heart to get rid of but if I did, I'd be lucky to get lunch money for it. So I just curse loudly when I have to move it every so often, because it's really damn heavy.

 

[wicked]

Yep, I've got a large plastic tub of Topps, largely mid-80s to 1992 (when I went to college and stopped collecting), that I don't have the heart to get rid of but if I did, I'd be lucky to get lunch money for it. So I just curse loudly when I have to move it every so often, because it's really damn heavy.

Same, but it’s a mix of Topps, Donruss, Score and Upper Deck.

A friend of my dad had a kid a few years older than me. He gave me a ton of cars c. 1990. I preceded to sell them… $5 here, $3 there. It’s probably better that I did then. I don’t know if a Canseco rookie card would be worth anything now.

 

[Bud_Bundy]

We just unearthed a ton of cards in the 1990-1991 range that my father-in-law and mother-in-law bought supposedly as investments for their grandkids. They have sat in boxes pretty much untouched since then. I've just started to go through the boxes and it is a mess. For example, there must be 1,500 or more Topps 1990 baseball cards. Is there a complete set? Nope. There are no cards for at least 10 percent of the full run. But one guy, a name unfamiliar to me, there are 10 of his cards. I wasn't around then and nobody can tell me how they bought them or where they got them. Oh, they also have Simpsons cards from the first year they were issued, but only 78 of the 88 set. This will not be fun.

 

[HanSenSE]

Topps is going to have to lean on soccer and entertainment now

Somehow, "I'll trade you this Nirvana card for your Paul McCartney, even up" doesn't have the same ring as Mantle for Mays.

 

[Splendid Splinter]

You can make a **** ton of money in card collecting these days. The market is ****ing insane.

 

[wicked]

You can make a **** ton of money in card collecting these days. The market is ****ing insane.

I had a podcast on a few weeks ago and they were mentioning how there’s pretty much one company that “grades” cards nowadays — not like the days where you picked up a copy of Beckett to get an idea of the price — and that they have a months-long backlog.

 

[Splendid Splinter]

Yep - PSA is the main company to get your cards graded; however, it's super expensive and it can take up to a year before getting them back.

 

[TheSportsPredictor]

 

[The Big Ragu]

The best part of Topps' debt situation is that much of it has been paid out to Michael Eisner in special dividends.

The thing is, yeah, with $194 million in debt, very little in cash on hand because it's owners have been paying everything out to themselves in dividends, and no license now, its creditors should be ****ting pickles.

But this is the story of a gazillion companies out there right now, many with much more debt than Topps, and even ****tier businesses. ... and because the debt markets are such a colossal price-fixed mess that have forced fixed income investors to take on more and more risk to compensate for the yield they don't get, those companies have no problem refinancing their debt when it's time to roll it over. As long as the Fed is propping it all up, nobody will fail.

The last time this came up, Eisner refinanced everything and then paid himself a $100 million dividend. As long as the Fed has it's thumb on the scales of finance, Topps will be able to roll over that debt before its due. If the whole thing comes to an end before that, Topps will default. But so will trillions of dollars of other debts, which is why the Fed is all in at this point until a credit crisis it can't control makes it happen.

 

[Scout]

So will a tangible card still be sold?

And I collect cards from the 70s, so this really does not affect what I do.

 

[The Big Ragu]

Yeah. Fanatics now has the licenses. They are going to replace Topps as the maker of trading cards.

 

[The Big Ragu]

In my post this morning, I speculated that Topps had decided that what the union and MLB wanted wasn't worth it. I think I was pretty wrong about that. It sounds now like they just kept Topps in the dark, never told them they were negotiating with anyone else yet, and then sprung the Fanatics deal on Topps unexpectedly. The whole thing sounds so insiderish. Fanatics has a brought in a bunch of executives from sports teams, and it's not a traditional licensing deal, they gave the league and the union stakes in the whole thing and are paying way more than Topps ever did for its license.

 

[TheSportsPredictor]

Fantatics : MLB :: Texas/Oklahoma : SEC