Interesting WSJ article on Fanatics and the future of Sports Cards

[Pierce09]

https://www.wsj.com/articles/fanatic...hare_permalink

Here's the part I found interesting:

People familiar with Fanatics Trading Cards say the new venture will angle to become the one-stop shop for all things in the trading card industry—including primary sales, secondary-marketplace deals, grading of cards and even storage.

In the industry’s traditional model, distributors would sell cards to retailers, and then remain on the sidelines as prices for its product rose, sometimes astronomically, in the secondary market via eBay and other trading platforms. Fanatics Trading Cards wants to capture that value and believes that customers can benefit from a modernized business without the numerous middlemen bloating the prices on cards.

“We see a market that has the potential to be disrupted in a way that improves consumer choice, improves consumer experience and also expands the opportunity for the rights holders,” said Deven Parekh, a managing director at Insight Partners.

It sounds like they (the players Unions are part owners as well as Private Equity, for now) are declaring all out war on the traditional mainstays of the hobby now that the money on the table has grown exponentially. If I were a breaker, grader, vault, or ebay I'd be paying close attention.

[Westwave]

Good, I hope all the distributors go out of business.

[bmf]

Appreciate you posting OP. I always cringe when I read hobby articles in outlets like WSJ. The writers are clueless. This Andrew Beaton fellow is no exception. For example, “…Fanatics Trading Cards will soon have nearly all of the most lucrative rights for trading cards in American sports at a time when the value of those cards, especially in baseball, has boomed.” If you don’t even know that the basketball card market has led the way, you shouldn’t be writing about this stuff.

[Pierce09]

Originally Posted by bmf

Appreciate you posting OP. I always cringe when I read hobby articles in outlets like WSJ. The writers are clueless. This Andrew Beaton fellow is no exception. For example, “…Fanatics Trading Cards will soon have nearly all of the most lucrative rights for trading cards in American sports at a time when the value of those cards, especially in baseball, has boomed.” If you don’t even know that the basketball card market has led the way, you shouldn’t be writing about this stuff.

Yeah the details are way too fuzzy to be able to translate what will happen but I do think it is a sign of whats to come. Im curious how Fanatics would intend on "Capturing" the secondary market.

[90skid]

This doesn't sound good. Business unicorn pipe dreams.

[Promethius88]

“We see a market that has the potential to be disrupted in a way that improves consumer choice, improves consumer experience and also expands the opportunity for the rights holders,”

What bothers me about this statement is that it doesn't say anything about improving pricing for the consumer. I read this as when prices rise, they, as well as the players, etc, will just be getting more money.

So instead of the money going thru distributors, dealers and the likes of the big 3, they will just be getting that extra that would have gone elsewhere after the cards were sold by the manufacturer.

I'm a simpleton, so maybe I'm just reading this all wrong.

[ohio_mba]

In the industry’s traditional model, distributors would sell cards to retailers, and then remain on the sidelines as prices for its product rose, sometimes astronomically, in the secondary market via eBay and other trading platforms. Fanatics Trading Cards wants to capture that value and believes that customers can benefit from a modernized business without the numerous middlemen bloating the prices on cards.

Got you loud and clear on the first part, Fanatics. In simpler terms, you want to be the scalper. But the last part of that sentence in the quote throws me off. How do customers benefit from it? We are still paying bloated prices.

Unless they are saying the following:

1. Paying bloated prices to plebs = bad
2. Paying bloated prices to us = good

[BRob1]

Originally Posted by Pierce09

Yeah the details are way too fuzzy to be able to translate what will happen but I do think it is a sign of whats to come. Im curious how Fanatics would intend on "Capturing" the secondary market.

I hope that doesn't mean they intend to have dynamic retail pricing (like walmart for instance) based on what they see in the secondary market.

[forjlf]

People familiar with Fanatics Trading Cards say the new venture will angle to become the one-stop shop for all things in the trading card industry—including primary sales, secondary-marketplace deals, grading of cards and even storage.

Sounds expensive for everyone else not named Fanatics.

[smalltown]

Originally Posted by forjlf

People familiar with Fanatics Trading Cards say the new venture will angle to become the one-stop shop for all things in the trading card industry—including primary sales, secondary-marketplace deals, grading of cards and even storage.

Sounds expensive for everyone else not named Fanatics.

Death by a thousand cuts.

[ohio_mba]

Originally Posted by forjlf

Sounds expensive for everyone else not named Fanatics.

I'm still not convinced us commoners will just be able to buy boxes from Fanatics. I can see them changing up their business plan to being the only distributor in the game. So now we'll be paying even more than what we are now because they'll be scalping to the retailers.

[Kobefan]

Originally Posted by Pierce09

Yeah the details are way too fuzzy to be able to translate what will happen but I do think it is a sign of whats to come. Im curious how Fanatics would intend on "Capturing" the secondary market.

Maybe they’re planning on something similar to upper deck’s epacks, but on bigger scale with grading and easy redemption options. Basically, all virtual packs with ability to trade and grade through their site, and redeem the singles.

[bigjbasketball]

Originally Posted by ohio_mba

Got you loud and clear on the first part, Fanatics. In simpler terms, you want to be the scalper. But the last part of that sentence in the quote throws me off. How do customers benefit from it? We are still paying bloated prices.

Unless they are saying the following:

1. Paying bloated prices to plebs = bad
2. Paying bloated prices to us = good

It sounds like what they’re trying to say is that they’ll be able to reduce the end price to the consumer by cutting out the middleman. Of course we know that will never happen, for two reasons. First, Fanatics will do like you said and they’ll just charge the same and keep the extra profits for themselves. Second, they can’t price things too low because then bots and flippers will just buy everything up at the low prices and resell for a profit.

[k13]

More profit for them.
Same or high prices for us.

No business passes savings to customers.

It will be full market value online or bots get everything.

There's no other way.

[JohnnyHatesJazz]

everybody cutting into the upside. fanatics selling without the middleman at bloated prices and TPG's charging an arm and a leg on grading.

Consumer can't win.

[JeremyNick]

What if Fanatics didn’t allow their cards to be graded by TPGs?


Just the thought brings a sweet tear to my eye.

[ninjacookies]

Can't wait to cop my Optic premium sets direct for $9999.

Toss in a Hooters snapback for 5% off.

[Scottish Punk]

Originally Posted by forjlf

People familiar with Fanatics Trading Cards say the new venture will angle to become the one-stop shop for all things in the trading card industry—including primary sales, secondary-marketplace deals, grading of cards and even storage.

Sounds expensive for everyone else not named Fanatics.

Don't they have a deal with csg already. Think of this scenario.

Fanatics gets exclusive contracts with "certified fanatic" Breakers.
Those Breakers get deals on product.
Collectors buy into breaks.
Collector has the option to sell hits directly on a Fanatics consignors website.
Or send card off to CSG and than sell.
Or do either and store in Fanatic vault for later sale at anytime.

Collectors can open wax, buy and sell without ever shipping/storing cards.
Fanatics will take a cut in each step.

[Asian62150]

Also, keep in mind Fanatics bought in at a time when the industry was/is at an all-time high. They paid 10x what Topps did for the MLB license.

That's a lot of $$$ to recoup. I'm sure they have a way to do it, but it always comes at the expense of the consumer.

[ninjacookies]

At least we'll get top quality non-player-specific event worn jerseys instead of the taobao napkins Panini inserted.

[BeastMode27]

I sold a nice 2012 Topps football rookie card on eBay to none other than the guy in charge of fanatics cards and our card future. Made me wonder if that was a hint they will be bringing back topps football and maybe basketball? We will see if he gets the grade bump on the undergraded card. I’ll be watching for it.

[mossoholic]

Originally Posted by k13

More profit for them.
Same or high prices for us.

No business passes savings to customers.

It will be full market value online or bots get everything.

There's no other way.

They can and should have a Montgomery Club type set up only on a much larger scale. Have different tiers with the top tier cost at $10,000 a year or more. They could also continue to have certain products sold through Fanatics reps. They could also copy the Panini dutch auction. Any of these would certainly limit bots.

[Asian62150]

Originally Posted by mossoholic

They can and should have a Montgomery Club type set up only on a much larger scale. Have different tiers with the top tier cost at $10,000 a year or more. They could also continue to have certain products sold through Fanatics reps. They could also copy the Panini dutch auction. Any of these would certainly limit bots.

Yup. Basically, if they want to limit bots, they can.

If they don't, they won't.

[mwheeler27]

I’m going to keep buying from Topps.

[MOONBASE1]

As Sherlock Holmes said to Dr. Watson:"Come Watson, the GAMES afoot". In other words, to be sure, the behind the scenes movers/shakers are planning our future in the hobby as we post.