In news broken yesterday by the Wall Street Journal, MLB and the MLBPA have awarded exclusive baseball card rights to a company called Fanatics. The move breaks 70 years of Topps controlling the market.
The MLBPA deal with Fanatics will begin in 2023, while MLB has a deal with Topps through 2025. This will shake up the baseball card collecting landscape. The players associations for the NBA and NFL are also on board with the new company, and the NBA has joined MLB to make a deal.
MLB already had a deal with Fanatics for merchandise, and the company will now look to expand into trading cards for the first time.
This is a combination of capitalism in the 21st century, and MLB always opting for the short-term dollar — a move that is also reflective of capitalism these days.
We don’t get companies who specialize in one product anymore. Those companies either get bought by bigger companies (Topps is currently in the stages of a merger) to serve as a brand, or they lose out to bigger companies expanding into their territory. In this case, the rights to baseball trading cards are going from a company known for trading cards to a company that right now primarily sells sports clothing.
The move for MLB and the MLBPA is a modern-day business move, as shown by the same move by their NBA and NFL counterparts. From a consumer standpoint, it limits options, which leads to a “take it or leave it” decision on remaining with the hobby. This is very similar to the video game world, where exclusive licenses can restrict what type of video games you receive, with no competitive drive forcing innovation from the exclusive rights holder.
Baseball cards are about the photography, the design of the card, and the information provided. If you grew up in the 80s and 90s like me, baseball cards were basically scouting reports in the pre-internet era. That was also a time when the market was flooded with options.
Those options eventually consolidated over the years, to where Topps and Panini were the two baseball card companies remaining, with Panini producing cards that don’t feature team names and logos. This largely gives Topps and their exclusive access a competitive advantage. Topps first gained that exclusive license in 2009.
That competitive advantage will go to Fanatics now, with Topps likely switching to a non-licensed approach.
This is a downside for collectors who prefer Topps. It’s very similar to the downside that exclusive licenses provided to the video game market, where MLB The Show has been a solid game, but the only game on the market, and up until recently, was only available on one console.
The exclusive deals work out for MLB in the short-term, as they make money off the license.
In the long-term, these types of deals will push more people away from the sport by restricting avenues for fans to consume the game. MLB has long chased short-term dollars while sacrificing long-term fans. The shakeup of the trading card industry could be another of those instances. Or, it could be that a storefront company like Fanatics providing their own baseball cards is a better 21st century approach than buying a baseball card brand in Wal-Mart.
It’s all about vertical integration.
Baseball card collectors: What do you think of the news? Leave your responses in the comments below.
Mid-season prospect rankings next week…