The ongoing legal battle between Panini America and Fanatics is fascinating fodder for card collectors. Attorneys watching from the sidelines are also intrigued by the NFLPA’s sudden decision to terminate its trading card deal with Panini three years before it was scheduled to expire, opting instead to immediately go with Fanatics.
The NFLPA told contract advisers last week that the union’s licensing branch, NFL Players Inc., had made that decision.
Fanatics had acquired the exclusive rights to make NFLPA-branded cards in a 20-year deal that was set to begin in 2026. However, Monday’s move accelerated the timetable and intensified the dueling lawsuits between Fanatics and Panini.
Fanatics’ countersuit alleged that Panini sued “at-will former employees” without non-compete restrictions who later signed on with Fanatics. Meanwhile, Fanatics agreed to a contemporary injunction that barred seven former Panini employees from recruiting others or using confidential information.
“It’s going to be a mess,” said California-based attorney Armen Vartian, who specializes in legal matters in the art and collectibles industries.
“One thing I know, from what I’ve read from Panini’s lawyers, is that the NFLPA said there was ‘a change of control’” at Panini, said Vartian, 65. “You lost too many of your good people, they’re saying. I hope for (the NFLPA’s) sake that they have more than that.”
Vartian said that in his view, the loss of control alleged by the NFLPA has not happened at Panini.
“They haven’t lost their numbers,” he said. “Where did they go?
“It’s like the kid who kills his parents and then says he’s an orphan.”
Fanatics has aggressively moved to take over the trading card business, along with sports memorabilia, betting and even sports tickets. The company announced in 2021 that it had acquired the rights to produce baseball, football and basketball cards when contracts with Topps and Panini expired. The wait to produce baseball cards became moot when Fanatics bought Topps for $500 million in January 2022.
In the football arena, Panini has continued to release and promote football card products, basically ignoring the NFLPA’s announcement.
“The public is wondering whose cards are legit,” Vartian said. “They’re going to square off over who’s going to issue cards in the meantime.
“It won’t be good for either side.”
David Boies, chairperson of Boies Schiller Flexner LLP in New York City and the attorney representing Panini, called the NFLPA’s early termination of the agreement and its jump to Fanatics “improper and ineffective.”
“If Panini had been as unsuccessful as Fanatics pretends, Fanatics would not have had to use decades-long exclusive dealing arrangements to lock it out of the market, or improperly cut off Panini’s supply, interfere with Panini’s production facilities, and raid its employees, Boies said in a statement sent to CNBC.
“Boies is one of the top litigators in the country,” Vartian said. “I wouldn’t want to go against him.”
Vartian is no stranger to litigation, particularly in the collectibles field. In 1978 he graduated from Brooklyn College in New York City with a bachelor’s degree in history, then earned his juris doctor at Harvard Law School in 1981.
For nearly four years (1986 to 1990), Vartian was the head of the legal department at Heritage Auctions. He was admitted to the California bar in 1990 and has headed his own law firm in Manhattan Beach, California, since September 1991.
In addition to writing articles for Coin World, (“My dad collected coins and stamps, and I am interested in history”) Vartian is the author of the 2003 book, Legal Guide to Buying and Selling Art and Collectibles.
Can Panini save its loosening grip on producing NFL cards for the next three years?
Panini alleged in its lawsuit that it was “not given an opportunity to bid or otherwise compete for the licenses Fanatics acquired.”
“Panini only learned about Fanatics’ exclusive agreements after they were consummated, through reading about them in the media,” court documents state.
Fanatics had countersued Panini in the Southern District of New York, asking for a stay while a judge considered its request to move the case from a Florida district court to New York. That motion was denied on Thursday.
Panini originally filed the 56-page federal antitrust lawsuit on Aug. 3, alleging that Fanatics had interfered with its existing contracts to produce trading cards and made other moves that violated Panini’s ability to conduct business.
Panini has had the rights to produce NFL cards since 2016. The company filed for arbitration with the American Arbitration Association to determine whether the NFLPA can cancel its licensing deal with Panini.
Vartian believes that Fanatics, which has boldly jumped into the collectibles market, is looking to broaden its scope even beyond collectibles and its position as a retailer of licensed sportswear and sports merchandise.
“I could see them doing media, going into programming and podcasts,” he said. “My guess is that they will be competing with gaming companies like FanDuel and DraftKings.”
Vartian cautioned that the caveat in the Panini-Fanatics dustup is that “we’ve only heard the NFLPA’s argument from Panini’s lawyers.”
“Maybe it’s a situation where Fanatics buys out Panini,” he said. “We’re going to declare war on you but we’re going to make a deal.”
That scenario would not surprise Vartian in the least.
“At the beginning of litigation, everyone is loud and bombastic,” he said. “It will settle down.
“There is always the reality of let’s do business. Let’s talk and settle it.”
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