On Tuesday night, the man who had guided the Topps Company since the fall of 2007 had to be feeling pretty good.
Michael Eisner’s investment and patience appeared to have paid off handsomely. The trading card business had grown to unprecedented heights. Topps’ sales were up 78 percent from 2020 and Eisner was nearing the finish line of a plan to take the company public through a merger deal with a special purpose acquisitions company that would value the long-time card maker and confectioner at $1.2 billion.
Then on Wednesday, the phone rang.
The call came from Major League Baseball, Topps’ most important partner and one with whom it had been joined at the hip since the early 1950s.
In baseball terms, Topps was being given its unconditional release.
While Eisner and Topps had glided merrily along, MLB and its players had quietly been working on a deal with Fanatics for many months and now it was final. Fanatics would take over the MLB trading card license in 2026–and have a deal with baseball’s players three years before that. Topps says it was given no chance to make a counter offer, with MLB and the MLB Players Association apparently believing there was no way for the old guard to compete with Fanatics’ money machine.
According to the Wall Street Journal, Eisner’s conversation with MLB Commissioner Rob Manfred was not a pleasant one. Topps had four more years left on its deal but would be a lame duck partner.
“Not only were we unaware that Major League Baseball was negotiating with anybody other than Topps regarding our rights beyond 2025, but we were abruptly informed yesterday at 2:00 p.m. ET…that a deal was completed, finalized and exclusive with Fanatics,” stated Andy Redman, Topps’ executive.
Redman indicated player representatives who spoke with Topps during MLB’s All-Star week barely six weeks earlier had never hinted anything was about to change.
“In two one-hour conversations, Evan Kaplan from M.L.B. Players Inc. never indicated to Topps that the union was negotiating with any other parties about our rights,” Redman relayed in the statement. Kaplan is the long-time managing director of the MLBPA.
Topps apparently believed that its long-running deal was in serious jeopardy. With negotiations on an extension of the MLB trading card license not typically undertaken until closer to the end of the deal, both Topps and its SPAC partner, Mudrick, apparently didn’t feel compelled to get an assurance from MLB that there was nothing to derail the plan to put Topps’ stock on the market. The Journal indicated “deal makers and people in the private-equity world” were stunned that wasn’t locked down. “These people said that ensuring the MLB contract could be renewed would typically be among the first steps in the due diligence process for a business like Topps,” the Journal stated.
Fanatics has yet to confirm any deal with MLB/MLBPA, its reported efforts to also gobble up trading card deals in other sports or whether it might try to buy one or more card manufacturers as part of its overall plan.
The New York Times reported that plans for the new trading card company are apparently already well underway and that MLB and the players union will each have seats on a board of directors that will run it.
Whatever the end result may entail, the ultimate goal is undoubtedly to increase profits by a sizeable amount with the leagues and players sharing in the proceeds. The dominos that fall in the meantime will be revealed in the days and weeks to come, but it’s clear that Michael Eisner’s very bad day was the big bang in the creation of what will be a new world for collectors.