Fanatics “absolutely possible” will buy the current mapmaker
They gobbled up the next licensing deals to produce baseball, football, and basketball cards. Now, Fanatics might be aiming to buy an existing trading card company.
Chairman Michael Rubin addressed his company’s recent blockbuster move for the first time on Thursday morning, confirming to a CNBC audience that Fanatics plans to implement a more direct-to-consumer approach.
“It’s really about a whole different take on the trading card industry. If you really think about the collector’s experience, it’s pretty brutal today,” Rubin said. “You have to buy primary cards with that many people in the middle. Then you sell a secondary card somewhere else. Your cards are scored by another party. You store them at someone else’s place if not yours. This is from our vision to create an amazing collectible experience to bring all the pieces together.
While not hinting at his future plans, Rubin said “it’s entirely possible” that Fanatics would acquire an existing card maker like Topps or Panini.
“All of these trading card companies are good manufacturers. They are good at what they do. They just didn’t have the vision to build a model that was much more direct to the consumer and then put all the pieces together to create a good collectible experience. This hobby has so many people in the middle and is perfectly set up to have an integrated direct-to-consumer experience.
Calling the explosion of the trading card market, as it’s now being transformed into a “very profitable business”, Rubin’s goal seems to be to increase profits by streamlining the way cards get to collectors and somehow making Fanatics sort of the go-to source for just about everything about current cards, including what happens after a collector gets them.
“Traditional trading card makers make close to a billion dollars selling to distributors. When you look at bringing this model much more directly to the consumer, and then sort of adding an integrated collecting experience, the main card sold, secondary market capabilities with grading and breaking, insurance, storage and financing, this is a very significant opportunity.
Earlier this summer, Rubin was among the investors who bought Certified Collectibles Group, the parent company of Certified Sports Guaranty (CSG), which began grading sports cards earlier this year.
Fanatics would license from the MLB Players Association in 2023, then take over football and basketball contracts by 2026. As of now, the NHL trading card license remains with Upper Deck.
The Fanatics deals, which would have lasted 15 to 20 years, are expected to give leagues and player associations partial ownership of Fanatics Trading Cards, a company that will be run separately from the company’s main e-commerce brand.
“Each property independently decided that they wanted to provide a much better experience for their long-term collectors and really grow the hobby,” Rubin said. “They thought the vision we had made so much more sense and that we also leveraged the 80+ million fans we have in our database that built the structural advantages that we have when we created this platform. -digital sports form.”
Earlier this week, The Wall Street Journal reported that Fanatics had attracted $350 million in Series A funding from additional investors for its trading card business. While the push to dominate the collectible card space will mean a jaw-dropping investment, sports attorney Irwin Kishner told CNBC later Thursday that it “seems high now, but 10 years from then you wish you had bought it.” They aligned themselves with various leagues, took Topps’ business plan and made it their own. This company is going to be a disruptor.
It was clear in the interview that Rubin and the team he is building to run Fanatics Trading Cards are focused on a new generation of young people who have embraced alternative assets and are treating the cards more like stocks than just collectibles.
“That’s the most important part. It is really a financial asset of the younger generation and I believe that with a great experience of collecting, we can develop this activity many times over. I think there is great growth ahead for the hobby.
