Industry Consolidation - Winners/Losers

worldtravel00 · 08-01-2023, 01:22 AM

It's an interesting time to be in the hobby with all the consolidations starting within the hobby. It will be good business cases to study what happens next 5-10 years.

As Fanatics continue their vertical integration of the sport cards industry, there might be these three large groups going forward:

1) Fanatics
a) Manufacturer: Topps
b) Market Place: None
c) Auction: PWCC
d) Vault: PWCC Vault
e) Grading: None
f) Breakers: Fanatics Live
g) Distribution: Fanatics
h) Shows: Fanatics
i) IP: MLB, NBA (2025+), NFL (2025+), and other sports/non sports
j) Price guide: None

2) Collector's Holding
a) Manufacturer: None
b) Market Place: Collectors.com
c) Auction: Goldin
d) Vault: Goldin Vault
e) Grading: PSA
f) Breakers: None
g) Distribution: Collectors.com Sellers
h) Shows: None for Sportscard
i) IP: None
j) Price Guide: PSA/Card Ladder

3) Ebay
a) Manufacturer: None
b) Market Place: Ebay
c) Auction: Ebay
d) Vault: Ebay Vault
e) Grading: None
f) Breakers: Ebay Live
g) Distribution: Ebay Sellers
h) Shows: None
i) IP: None
j) Price Guide: Ebay/TeraPeak

Given above, Fanatics have huge advantage over other two groups. Ebay has a lot to lose depending on their future course of actions. Do you see any other groups emerging other than these?

As with industry consolidations, there are winners and losers. I think these will be winners/losers in the future:

Winners:
1. Fanatics - They pretty much swallowed the companies in distress prices - Topps/PWCC. Also they have virtual monopoly on IPs for next 10 years on MLB/NFL/NBA licenses. If they don't make stupid decisions for the short term profits, they will definitely reap their rewards/desired valuations in the future.

2. Breakers - With Fanatics pushing more into breaking, they will be able to purchase more products and have more healthy margins.

3. Upper Deck - UD Valuation might get higher if there's competition to acquire them by either Collector's holding or Ebay group. Ebay group or Collector's holding will have more difficult time competing Fanatics without manufacturer and their IP.

Neutral:
1. Panini - Panini's fortune will be based on whether Panini USA gets acquired by Fanatics prior to NBA/NFL licenses expiring. If they could sell it prior to the IP expiring then they could get better prices from Fanatics. If not, Panini USA will be worthless.

2. Comc - As a marketplace, and service provider to the Upper Deck and it looks like Topps as well, they are holding niche area of hobby. Also, their expansions into other areas could be profitable going forward if done correctly.

3. MLB/NBA/NFL League - They might be short time winner since they are getting higher license revenues and equities in the Fanatics collectibles. However, future revenue will hinge on how well Fanatics execute their strategies. If Fanatics are not successful in making the hobby exponentially larger, their future licenses revenue might not be higher.

Losers:
1. Collectors ripping wax - Products will be mass produced with the higher prices. Also, ROI will be a lot lower.

2. Dealers waiting on the future production allocations - product allocations will be limited and more restrictions on what could be done with the product.

3. Distributors - I think they will be mostly out of business soon.

4. Ebay - With multiple market places coming available and competitive pricing for the sellers, they will lose a lot of customers down the road.

5. NSCC Nationals shows - Not sure how they will compete with Fanatics in the future shows.

6. Third Party grading companies other than PSA - BGS/SGC/CSG and others will be out of business unless they are bought by one of these groups. They don't have enough capitals to compete if Fanatics truly indeed completes the vertical integration.

7. Live Break platforms like WhatNot and others - I think they will be out of business when Fanatics/Ebay Live platforms becomes more mature few years down the road.

Any different assessments than above? Any other winners/losers?

Jolten Joe · 08-01-2023, 01:38 AM

Only thing I disagree with is Ebay being a loser. They are the PSA of online auction marketplaces. Fanatics could require breakers to sell only on their new platform but I don't see how they can legally tell the average collector where or how they can sell items they already own. People like sticking with what they already know over changing which is why you have seen other selling platforms come and go over the years. COMC was smart and partnered up with Ebay and now with PSA. If they had done neither they wouldn't be what they are today IMO.

hammertime · 08-01-2023, 02:21 AM

Winners:
Fanatics

Losers:
All of us

Bruins1993 · 08-01-2023, 04:08 AM

As long as collectors keep emptying every pocket for modern manufactured scarcity, and hopes of finding manufactured scarcity, I believe Fanatics, CLCT, and eBay all will continue to win big from it. $$$... Just my take on that angle alone...

Paderborn1907 · 08-01-2023, 04:00 AM

Quote:

Originally Posted by worldtravel00

Neutral:
1. Panini - Panini's fortune will be based on whether Panini USA gets acquired by Fanatics prior to NBA/NFL licenses expiring. If they could sell it prior to the IP expiring then they could get better prices from Fanatics. If not, Panini USA will be worthless.

Any different assessments than above? Any other winners/losers?

Panini still has a lot of desirable brands (Prizm, NT, Flawless) that Fanatics probably still want/need for their approach of mass production.

They are also still covered by the much bigger Italian Sticker company and can actually wait this out with some time left on the NBA/NFL licenses.

ewokpelts · 08-01-2023, 10:35 AM

Quote:

Originally Posted by Paderborn1907

Panini still has a lot of desirable brands (Prizm, NT, Flawless) that Fanatics probably still want/need for their approach of mass production.

They are also still covered by the much bigger Italian Sticker company and can actually wait this out with some time left on the NBA/NFL licenses.

The Italians were trying to sell the us card company via SPAC less than two years ago.

ewokpelts · 08-01-2023, 10:34 AM

Fanatics overpayed for topps.

The SPAC valuation was about 1.1 billion for the total Company (trading cards/entertainment, candy, and gift cards). The fanatics purchase of the trading cards and entertainment division was more than HALF of that valuation for only a third of the boreal business. (592 million dollars).

They got the prize but NOT at a distressed price.

08-01-2023, 01:22 AM	#1
worldtravel00 Member Join Date: Feb 2013 Posts: 662	Industry Consolidation - Winners/Losers It's an interesting time to be in the hobby with all the consolidations starting within the hobby. It will be good business cases to study what happens next 5-10 years. As Fanatics continue their vertical integration of the sport cards industry, there might be these three large groups going forward: 1) Fanatics a) Manufacturer: Topps b) Market Place: None c) Auction: PWCC d) Vault: PWCC Vault e) Grading: None f) Breakers: Fanatics Live g) Distribution: Fanatics h) Shows: Fanatics i) IP: MLB, NBA (2025+), NFL (2025+), and other sports/non sports j) Price guide: None 2) Collector's Holding a) Manufacturer: None b) Market Place: Collectors.com c) Auction: Goldin d) Vault: Goldin Vault e) Grading: PSA f) Breakers: None g) Distribution: Collectors.com Sellers h) Shows: None for Sportscard i) IP: None j) Price Guide: PSA/Card Ladder 3) Ebay a) Manufacturer: None b) Market Place: Ebay c) Auction: Ebay d) Vault: Ebay Vault e) Grading: None f) Breakers: Ebay Live g) Distribution: Ebay Sellers h) Shows: None i) IP: None j) Price Guide: Ebay/TeraPeak Given above, Fanatics have huge advantage over other two groups. Ebay has a lot to lose depending on their future course of actions. Do you see any other groups emerging other than these? As with industry consolidations, there are winners and losers. I think these will be winners/losers in the future: Winners: 1. Fanatics - They pretty much swallowed the companies in distress prices - Topps/PWCC. Also they have virtual monopoly on IPs for next 10 years on MLB/NFL/NBA licenses. If they don't make stupid decisions for the short term profits, they will definitely reap their rewards/desired valuations in the future. 2. Breakers - With Fanatics pushing more into breaking, they will be able to purchase more products and have more healthy margins. 3. Upper Deck - UD Valuation might get higher if there's competition to acquire them by either Collector's holding or Ebay group. Ebay group or Collector's holding will have more difficult time competing Fanatics without manufacturer and their IP. Neutral: 1. Panini - Panini's fortune will be based on whether Panini USA gets acquired by Fanatics prior to NBA/NFL licenses expiring. If they could sell it prior to the IP expiring then they could get better prices from Fanatics. If not, Panini USA will be worthless. 2. Comc - As a marketplace, and service provider to the Upper Deck and it looks like Topps as well, they are holding niche area of hobby. Also, their expansions into other areas could be profitable going forward if done correctly. 3. MLB/NBA/NFL League - They might be short time winner since they are getting higher license revenues and equities in the Fanatics collectibles. However, future revenue will hinge on how well Fanatics execute their strategies. If Fanatics are not successful in making the hobby exponentially larger, their future licenses revenue might not be higher. Losers: 1. Collectors ripping wax - Products will be mass produced with the higher prices. Also, ROI will be a lot lower. 2. Dealers waiting on the future production allocations - product allocations will be limited and more restrictions on what could be done with the product. 3. Distributors - I think they will be mostly out of business soon. 4. Ebay - With multiple market places coming available and competitive pricing for the sellers, they will lose a lot of customers down the road. 5. NSCC Nationals shows - Not sure how they will compete with Fanatics in the future shows. 6. Third Party grading companies other than PSA - BGS/SGC/CSG and others will be out of business unless they are bought by one of these groups. They don't have enough capitals to compete if Fanatics truly indeed completes the vertical integration. 7. Live Break platforms like WhatNot and others - I think they will be out of business when Fanatics/Ebay Live platforms becomes more mature few years down the road. Any different assessments than above? Any other winners/losers?

08-01-2023, 04:08 AM	#4
Bruins1993 Member Join Date: Jun 2019 Location: Stuck inside of Mobile Posts: 1,289	As long as collectors keep emptying every pocket for modern manufactured scarcity, and hopes of finding manufactured scarcity, I believe Fanatics, CLCT, and eBay all will continue to win big from it. $$$... Just my take on that angle alone... __________________ #nevergetcheated Riiiiiiiiight

08-01-2023, 01:38 AM	#2
Jolten Joe Banned - PBM Join Date: Dec 2022 Posts: 1,666	Only thing I disagree with is Ebay being a loser. They are the PSA of online auction marketplaces. Fanatics could require breakers to sell only on their new platform but I don't see how they can legally tell the average collector where or how they can sell items they already own. People like sticking with what they already know over changing which is why you have seen other selling platforms come and go over the years. COMC was smart and partnered up with Ebay and now with PSA. If they had done neither they wouldn't be what they are today IMO.

08-01-2023, 02:21 AM	#3
hammertime Member Join Date: May 2020 Location: OH->MI->MD->VA Posts: 6,721	Winners: Fanatics Losers: All of us

08-01-2023, 10:34 AM	#7
ewokpelts Member Join Date: Aug 2020 Location: Evergreen Park, IL Posts: 4,021 asg2003ws2005	Fanatics overpayed for topps. The SPAC valuation was about 1.1 billion for the total Company (trading cards/entertainment, candy, and gift cards). The fanatics purchase of the trading cards and entertainment division was more than HALF of that valuation for only a third of the boreal business. (592 million dollars). They got the prize but NOT at a distressed price.