Congrats! You just acquired a card company. Now what?

[Boredlawyer]

Congratulations! Your private equity firm just acquired the most popular sports card brand of all time, and, because you have the most experience in the hobby of anyone on the board, decided to name you the managing director.

Your newly-acquired card company has a lot of things going for it, but lack of innovation and general inefficiency have presented you with an opportunity and your firm acted hastily.

Your firm plans to either take the brand public via IPO, or sell this brand to another investor by Year 7.

Before acquiring this company, your firm acquired the exclusive license to produce Major League Baseball cards featuring official leagues and teams. While you aren't the only card producer, you're the only producer who owns this highly valuable license. Without this license, you have significant competition. Simply put, you have very little competition in a sport, that for all its warts, remains immensely popular in the United States, and retains the most collectability of the major sports.

Your consumers fall into a few different buckets, but volatility of your business is historically tied to discretionary spending. Your consumers are generally seasoned collectors who have seen multiple cycles in the hobby, Gen Z and millennials with discretionary spending, often due to crypto, and children being introduced to collectables for the first time. Each of these groups has different pricing elasticity and retention rate, but some economic factors will always be outside your scope of control.

Your board of directors understands that these changes will take time to implement, and has granted you a one year grace period to make necessary adjustments. After twelve months, the firm demands a 20% annual increase (earnings before interest/taxes/depreciation/amortization). Missing this goal for two consecutive years (starting Y2) will lead to your immediate ouster as managing director.

You are no longer merely a hobbyist, you are a managing director with the pressure of dozens of investors and your board. What is your plan?

[hermanotarjeta]

1. Create a hoard of degenerate addicts.
2. Eliminate the middleman.
3. Drive up prices.
4. Grade the cards.
5. Sell the cards.
6. Collect profits.

[MiamiMarlinsFan]

Originally Posted by hermanotarjeta

1. Create a hoard of degenerate addicts.
2. Eliminate the middleman.
3. Drive up prices.
4. Rip the cards.
5. Grade the cards.
6. Store the cards.
7. Sell the cards.
8. Collect profits.

Made some slight tweaks, but otherwise, you’re hired on my staff as soon as I take power, Hermano.

[hermanotarjeta]

Originally Posted by MiamiMarlinsFan

Made some slight tweaks, but otherwise, you’re hired on my staff as soon as I take power, Hermano.

Ah yes, thank you for fine tuning the order of objectives.

[finfangfan]

9. ipo

[OhioLawyerF5]

For all the crap they get, I would do exactly what Fanatics has done. Hobby friendly? debateable. Business masterclass? Absolutely.

[MiamiMarlinsFan]

Originally Posted by OhioLawyerF5

For all the crap they get, I would do exactly what Fanatics has done. Hobby friendly? debateable. Business masterclass? Absolutely.

I hate it, but you’re right. When Fanatics first made the acquisition, people were asking, “Is Fanatics in over their head?” but they’ve been too busy making money hand over fist to respond.

[Rooftop]

Model it like the diamond industry..

Oh wait...

[haldcottingham]

I remember when I bought a few hats years ago from Lids, and they sent me the complete wrong hats. I called to initiate a return. I told the rep that I had been avoiding Fanatics for that same reason and he told me that they had just been acquired by Fanatics...I said "sh!t" and without hesitation he said "yep, we've gotten that response a lot".

Fanatics has pretty much ruined everything they've put their hands on.

[Handsome Wes]

Originally Posted by Rooftop

Model it like the diamond industry..

Oh wait...

Yeah, I don't think that I can force the people in Congo to make baseball cards for me

[Handsome Wes]

Here's my $0.02:

I am reminded of when Steve Jobs returned to Apple and drew a square, and divided that vertically and horizontally. Left side was for casual users / right was for professional; i think Top was computer and bottom was ... I can't remember.

So I would first limit the number of SKUs to 3-5 core products, each one tailored for a specific audience. You'd have the base set, a premium set, a retro set, and maybe one or two limited run sets for uber collectors.

Limiting the SKUs would cut production costs, which in turn can be used to improve quality control, and make inventory management that much easier.

SPeaking of inventory management, I'd love to see something like an iTunes for cards -- maybe we can have a scannable code on each card and it'll automatically add that card into someone's virtual library.

I'd also prioritize vertical integration / supply chain overhaul and marketing (which would include partnerships with realtors and such).

[seanbros55]

Phase 1: Collect Underpants
Phase 2: ???
Phase 3: Profit

[base set]

1 obtain intellectual property rights to the concept of “Bubble Gum Cards” from whatever shell remains of the Topps Chewing Gum Company

2 secretly create “hot boxes” of Baseball Cards with Bubble Gum in the packs

3 insert these boxes into an occasional case as “pallet hits”

4 watch media explosion on the concept and Boomers going crazy to find one

5 profit

[Bosoxfan5990]

This is a fantastic thread that proves a good point.

[Jaypers]

Just one of many things, but this stands out the most to me.

Get rid of all non-sports in sports cards. No more Disney or GPK in baseball products, for instance. Irks me to no end.

[scal]

Originally Posted by Jaypers

Just one of many things, but this stands out the most to me.

Get rid of all non-sports in sports cards. No more Disney or GPK in baseball products, for instance. Irks me to no end.

Does that go for Allen & Ginter, too?

[eastbayak]

Originally Posted by OhioLawyerF5

For all the crap they get, I would do exactly what Fanatics has done. Hobby friendly? debateable. Business masterclass? Absolutely.

Yup, I'd do the same as Fanatics except I'd include more hits in the product (instead of withholding), I'd get rid of redemptions, and I'd create multiple membership clubs (by the sport and/or product cost [low-end/mid-end/high-end, membership costs depending on the tier]).

[Gatorsmld]

Originally Posted by MiamiMarlinsFan

I hate it, but you’re right. When Fanatics first made the acquisition, people were asking, “Is Fanatics in over their head?” but they’ve been too busy making money hand over fist to respond.

When I was a kid I remember seeing a cartoon about Scrooge McDuck laying in a bed made of gold with the blankets made out of cash. This is how I like to think of how Fanatics folks sleep.

[corockies]

Originally Posted by Bosoxfan5990

This is a fantastic thread that proves a good point.

$$$ > ethics and morality?

I'm pretty sure "it's just business" has become my #1 most hated phrase.

[vwnut13]

Flip it.

[Blamo]

In an effort to get products out more quickly - all autographs will be redemptions. Redemptions will include current players, rookies, prospects, little league players (aka Ultra Prospects), retired players, dead players (aka post prospects).

Redemptions not submitted within a year can be exchanged for a mystery box, which will contain a redemption.

[fabiani12333]

Originally Posted by OhioLawyerF5

For all the crap they get, I would do exactly what Fanatics has done. Hobby friendly? debateable. Business masterclass? Absolutely.

They didn't do crap -- they acquired the licenses and Topps after the market had already exploded. They didn't create value -- they captured, just like other POS private equity companies.

The only innovation from them was offering the leagues and unions equity, which was already something they had been doing for the years: https://licensinginternational.org/n...nfl-mlb-nflpa/

Cornering an established market and monopolizing it is not innovation -- it's white collar thuggery.

[ThoseBackPages]

sell to Fanatics

[mfw13]

The determining factor really is time horizon.....if you're trying to flip for a quick profit then you make very different choices that if you are trying to maximize the long-term value of the brand.

[finfangfan]

Fanatics is definitely going full out to beef up their eventual ipo. I also think they bring back eTopps as a direct to consumer platform if/when the breaker model crashes.