My Thoughts on the Fanatics Sports Card Takeover

In one of the biggest deals in sports card history, Fanatics has reached an agreement with the MLB, NFL, and NBA player's associations to distribute all their cards starting around 2025. Its an interesting deal to say the least. I watch a ton of CNBC and always noticed that Fanatics was raising a ton of money every funding round. No one saw something like this coming but maybe we should have. Cards have exploded in sales and when big time money sees an opportunity to get a piece of the pie they move in. I want to take this post to follow the money and suggest why this happened and what will happen next. 

Why Do I Think This Happened? 

Since the pandemic started modern cards have been selling for millions of dollars (Giannis, Luka, Lebron). The players who signed these cards were not paid much up front in comparison to what the card sold for. Imagine being a prospect and signing for Bowman Draft for a few thousand bucks and your card sells for millions a decade later if not sooner. Not sure if I would be happy about that. I think the players want their cut on the front end. The big part that no one seems to mention is that each league will have an equity stake in the company. That is why this is happening. It all came down to getting more money. 

Predictions 

1. Fanatics will file to go Public very soon. Might not be a bad buy as they hold the license to the three most popular sports in the US. (Not Investment Advice) 

2. Fanatics will buy Topps and Panini. Right now I would say they would be better off buying Topps and creating their own brands for NFL and NBA cards.

3. Distribution will forever change. Everything will go through Fanatics. They run the show. Group breakers may run into issues. 

4. I could see a scenario where auto's of certain players never make it into a hobby box. A high profile player's auto would automatically go to auction.

5. Fanatics teams up with PSA for grading. I could also see a team up with Goldin Auctions. Look out for more vertical integration like this. A one stop shop for all things cards. Fanatics does not want you going anywhere else to do business. Buying, selling and grading will all be done on their site or one of their partners.