The NBA is saying goodbye to Topps and Upper Deck and handing the rights to its trading cards over to Panini, a European-based manufacturer.
Topps and Upper Deck will stop producing NBA-licensed basketball cards later this year. The league has awarded its next trading card contract to The Panini Group, a European-based collectible publisher, which will take over production and distribution beginning later this year.
The deal begins with the 2009-2010 season and continues through 2012-13 and gives Panini the exclusive rights to produce cards, stickers and sticker albums. Together with the NBA, Panini says it will provide significant retail marketing and promotional support including TV, print and on-line initiatives and in-store events for both hobby shops and retailers.
Based in Italy, Panini will open an American office in New York. The plan calls for the company to produce 15-20 different NBA-licensed products per year.
Topps has been producing NBA cards since 1957, although the company did not have a deal with the league each year. They have produced cards on an annual basis since the early 90s, when Upper Deck also entered the market. Upper Deck indicated Tuesday that it would fulfill its commitment by producing sets for the remainder of the season.
"Our focus remains on delivering great products to the loyal collectors and consumers who have passionately supported Upper Deck basketball products. We are confident the remaining 2008-09 NBA sets will be some of the best our industry has ever seen," said Upper Deck's VP of Sports Bernd Becker.
Topps released a statement indicating that while it was interested in renewing its contract with the NBA, making a bid to trump Panini "does not make economic sense". Sales of basketball cards have been declining in recent years and the league along with the two American card-makers agreed that an exclusive deal was in the best interests of the league.
"As we look to the future of our trading card business, there is general consensus, including with our current partners, Topps and Upper Deck, that moving forward with an exclusive partner is the best way for us to energize the category on a worldwide basis. We are fortunate to have had three outstanding companies interested in our trading card business and believe Panini's position as the leading global company in this industry aligns best with our global growth strategy," said Sal LaRocca, Executive Vice President, NBA Global Merchandising Group.
The NBA claims its new partnership will "focus on redefining the domestic NBA trading card category by enhancing the relationship with existing NBA card enthusiasts, cultivating a new generation of collectors, supporting hobby shops and retailers, and by creating new product growth opportunities worldwide".
Panini, founded in 1961, actually produced a set of NBA stickers in the late 1990s, but its primary U.S. focus to date has been non-sports products. Panini has a successful North American collectibles business with consumer brands such as Disney's Hannah Montana and High School Musical, and Warner Bros.' Harry Potter, as well as with the UEFA Euro 2008 and FIFA World Cup sporting events. Panini products are distributed in over 100 countries and the company expected to reach $1 billion in sales for 2008.
The NBA's move to go with Panini would indicate the league's continued push toward becoming a more global enterprise. The league is especially popular overseas, even in China where U.S. stars have a tremendous following among sports fans. Panini would seem better suited to create more revenue for the league overall, even if it isn't well known among U.S. fans or collectors.
"As the leading global sports league, the NBA provides Panini with an international platform to expand the global trading card and collectibles markets by building our business in the U.S. and attracting new collectors around the world," said Peter Warsop, Panini Group Licensing Director.
The league is counting on Panini to cultivate growth. "Over the years, NBA trading cards have served as an important source to connect fans of all ages with our game," said LaRocca. "Our exclusive partnership with Panini provides us with the best opportunity to recreate the trading card market by developing the key retail channels with a variety of products and promotions geared towards all consumer segments."
The NBA was likely impressed by Upper Deck's exclusive deal with the National Hockey League, which took effect in 2006 and has been successful for both. Working with one partner should also help the league manage its brand, distribution and marketing efforts.