Written on behalf of Feigenbaum Consulting
For professional athletes, and as we have recently discussed, college athletes, the income that can be generated from licensing their names and likenesses to collectible and memorabilia companies can be significant. Just this week, announcements within the industry have made it clear that the market is about to undergo a significant shift.
How much is the sports card and memorabilia market worth?
The website Sports Card Investor published a story last summer in which it calculated the sports card and memorabilia market to be worth an estimated $5.4 billion. Of that number, $4.7 billion was generated through eBay sales. The market exploded during the pandemic, with record sales, including a $5.2 million purchase of a Micky Mantle card making headlines.
It isn’t just vintage cards selling for huge amounts, either. A rookie card of Major League Baseball star Mike Trout sold for $3.9 million, after selling for just $400,000 two years earlier.
Back in the 1990s, the value of cards plummeted due to over-production and the flooding of the market. However, in recent years, companies like Topps and Panini have made collecting relevant again, introducing high-end products and extremely limited availability for certain cards.
It’s not just the card companies that are reaping profits. In 2015 the NFL Players Association announced it received about $25 million from Topps and Panini for the 2014 year, while MLB players raked in $10.1 million (rising to $20.4 million in 2020). While current numbers are hard to come by, it’s safe to bet that an increase in the market for cards has led to larger payments for players.
Panini announced just this summer that it had reached a deal to offer cards featuring the names, likenesses, and autographs of college players, which will see payment going to athletes for the first time. Professionals can also make huge deals on their own. NBA stars Michael Jordan and Lebron James have exclusive deals with Upper Deck, a company that does not currently have any rights to produce cards (though they can produce memorabilia).
Major shakeup in licensing rights
Just yesterday it was announced that sports apparel and memorabilia distributor, Fanatics had reached a deal to secure exclusive rights to Major League Baseball trading card licenses. Just hours later it was revealed that they had also secured NBA and NFL rights from Panini.
While details of the deals are not clear, it is bound to have a huge impact on the industry. Fanatics is a retailer and doesn’t currently own any production facilities for cards. Rumours abound about whether they will plan to buy card companies such as Topps, Panini, or Upper Deck. That would allow them to continue to offer popular brands rather than starting from scratch. Another important consideration to take into account is what will happen to players who have signed exclusive deals with companies other than Fanatics. Additionally, Topps was about to be taken public by Mudrick Capital, which purchased the brand this summer. Going public was expected to set Topps at a valuation of $1.3 billion.
We will be sure to update our readers on what this news means as more details become available.
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