The sports platform Fanatics and its competitor Panini have recently found themselves embroiled in a legal battle, with both companies filing lawsuits against each other. These trading card rivals are facing off in court, each accusing the other of various wrongdoings and breaches of duty. While this dispute revolves around licensing rights for professional sports league trading cards, it also sheds light on the intense competition within the trading card industry.
Last week, Panini took the first legal action by filing an antitrust lawsuit against Fanatics. Panini claimed that Fanatics had engaged in “calculated, intentional, anticompetitive conduct” in an attempt to establish a monopoly in the trading card industry. Panini argued that Fanatics had positioned itself to drive out competitors and erected barriers to entry, effectively blocking their return. Additionally, Panini alleged that it was not given a fair chance to bid or compete for the licenses that Fanatics acquired.
In response, Fanatics countersued Panini, alleging interference with business relations and a breach of duty to negotiate in good faith. Fanatics denied engaging in antitrust behavior, stating that it won the licensing rights due to its superior offer and Panini’s failure to capitalize on its opportunities. Fanatics accused Panini of resorting to unlawful trade practices, strong-arm tactics, and tortious misconduct in an attempt to hinder Fanatics Collectibles’ growth. Fanatics claimed that Panini intentionally impeded its business with the hope of extorting a significant sum for the termination of its licenses.
David Boies, the legal counsel for Panini, dismissed Fanatics’ countersuit as a desperate attempt to evade its serious antitrust liability. Boies remarked that if Panini had truly been as unsuccessful as Fanatics claimed, Fanatics wouldn’t have resorted to exclusive dealing arrangements or other aggressive tactics to eliminate Panini from the market. Boies argued that Fanatics had cut off Panini’s supply, interfered with its production facilities, and poached its employees, further exacerbating the bitter dispute between the two companies.
Fanatics, originally an e-commerce platform established in 2011, has rapidly evolved to become a major player in the world of sports merchandise. The company holds exclusive rights to sell merchandise for major sports leagues and organizations, ranging from the NFL and NBA to the International Olympic Committee. In recent years, Fanatics has expanded its operations into trading cards, collectibles, and sports betting, aiming to deepen its connection with millions of sports fans.
One significant move by Fanatics was its exclusive licensing deal with Major League Baseball (MLB) and its players association in 2021. This deal ended a 70-year partnership between MLB and Topps, a well-known trading card company. As a result, Topps’ plans for a SPAC merger were abruptly terminated, and Fanatics ultimately acquired Topps in January 2022. This strategic acquisition solidified Fanatics’ position in the trading card market and further intensified its rivalry with Panini.
Fanatics has sought to expand and innovate within the trading card industry. The company has introduced new features to its trading cards and collectibles, such as including game-worn jersey patches on rookie cards. Fanatics has also launched a livestream shopping experience, allowing card collectors to participate in live card “breaking.” These initiatives demonstrate Fanatics’ commitment to enhancing the trading card experience for collectors and capitalizing on the growing demand for unique and valuable sports memorabilia.
The trading card business of Fanatics is highly valued, with estimates placing its worth at $10.4 billion as of September 2021. The company received a $350 million Series A funding round, attracting investments from prominent entities such as Silver Lake, Endeavor Group Holdings, and Insight Partners. Furthermore, the NBA and MLB, along with their player unions, hold equity stakes in Fanatics as part of their licensing agreements. These substantial investments reflect the confidence in the company’s potential and the immense market interest in the trading card industry.
As the legal battle between Fanatics and Panini unfolds, the outcome remains uncertain. Both parties are determined to protect their interests and secure their positions in the highly competitive trading card industry. The clash between these trading card titans highlights the fierce competition and strategic maneuvers that characterize the business landscape.
The legal dispute between Fanatics and Panini signifies the intense rivalry within the trading card industry. The outcome of this battle will have far-reaching implications for both companies and may reshape the landscape of the trading card market. As the legal proceedings continue, the industry and avid collectors watch with bated breath to see how this clash of titans will unfold.