Topps No Longer Set to Go Public Without MLB Deal

Topps No Longer Set to Go Public Without MLB Deal article feature image
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Kris Connor/Getty Images. Pictured: Topps baseball cards.

Mudrick Capital, just days from merging with Topps and bringing it public, called off the deal on Friday morning after learning Thursday that Topps had lost its exclusive MLB rights to Fanatics.

Mudrick filed an 8-K with the Securities and Exchange Commission on Friday morning, saying the deal to bring Topps public, first agreed to in April, was off.

A shareholder vote to approve the deal was scheduled to take place next week.

On Thursday, Major League Baseball and the Major League Baseball Players Association revealed they had given their exclusive future licenses to Fanatics. The union deal doesn’t start before 2023, and the MLB deal won’t start until 2026.

Terms of the deal are unclear, but sources say that both MLB and MLBPA will have an equity stake in the new company formed from scratch just to produce trading cards. Fanatics has hired StockX founder Josh Luber to run the business, sources said.

Losing the future rights for Topps, which had made baseball cards since 1951 under that name, made it a shell of its former self. But the company has very valuable intellectual property that makes it virtually impossible that it wouldn’t be acquired by Fanatics — now for a bargain.

The deal might be far off, but it falls in line with Fanatics becoming the behemoth that it has. Arguably no player in the business of sports has been as disruptive as Fanatics has over the last decade.

The sports giant first conquered merchandising to become the largest independent seller of team-licensed gear in the world. It then went into sports memorabilia, buying up companies to become a name in the autograph game.

For its recent move into sports betting, it hired away FanDuel CEO Matt King and Tucker Kain, president of business enterprise for the Los Angeles Dodgers, to run the company’s move into other verticals.

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Topps produced its first baseball cards in 1951 and made its most famous card a year later — the Mickey Mantle rookie, which is still the most valuable post-war card in the industry.

Topps was the most valuable license to the Major League Baseball Players Association, paying the union $20.4 million in 2020, according to the union’s annual report with the labor department.

On Wednesday, Topps reported quarterly earnings and raised annual guidance from $740 million to $760 million to $830 million to $850 million. Net sales in the quarter that ended in mid-July increased 77.7%.

It’s well known that Fanatics was looking into the trading card business, but since almost all of the value is in the licenses, it obviously felt that it was worth it to just sign the next set of deals.

Topps’ assets, including old designs, are a huge part of trading card history. Without baseball, Topps would have only soccer.

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