The Re-Monopolization of the U.S. Sports Trading Card Industry

Abstract

The collecting of sports trading cards was once thought of as an outdated childhood hobby. During the COVID pandemic, however, the sports trading card industry experienced a resurgence of popularity—capitalizing on the same growing societal interest in collectables and alternative investments that catapulted companies selling non-fungible tokens (NFTs) and cryptocurrencies into prominence. Thanks to this newfound interest in card collecting, sports trading cards are now estimated to comprise an $8 billion industry. This growth has also led one company, Fanatics, to try to gain control of the hobby through a series of allegedly anticompetitive mergers and acquisitions.

Long known as a leading retailer of licensed apparel, Fanatics began its unexpected move into sports trading cards in 2021 by procuring the long-term exclusive rights to produce sports trading cards for the National Football League, National Basketball Association, and Major League Baseball. Since then, Fanatics has gone on to acquire one of the industry’s best-known competitors (Topps), while also asserting control over much of the rest of the vertical supply chain necessary for manufacturing sports trading cards. Fanatics’ consolidation of the industry thus harkens back to an earlier era, when Topps itself enjoyed a nearly 25-year, uninterrupted monopoly over sports trading cards, a period that featured increasingly uninspired product offerings for consumers.

In August 2023, displaced rival sports trading card company Panini sued Fanatics, arguing that Fanatics’s tactics violated federal antitrust law by excluding Panini from the trading card business. Even beyond the scope of this lawsuit, however, the consolidation of the U.S. sports trading card industry raises a host of other important questions regarding the legality of the complex series of exclusive licensing agreements with sports teams and players’ unions upon which Fanatics’s consolidation depends.

This Article analyzes the implications of Fanatics’s re-monopolization of the sports trading card industry, as well as the potential effects that its exclusive sports-licensing agreements have on consumers more broadly. It concludes by expressing concern about the reconsolidation of the U.S. sports trading card industry, and encourages courts to conduct a long-overdue reconsideration of sports leagues’ exclusive trademark licensing practices.

Keywords: Antitrust, intellectual property, sports law, group licensing, right of publicity, sports cards, Fanatics, Topps, Panini

JEL Classification: K21