Trading Card Transformations

The trading card industry has been experiencing a number of changes this year, from skyrocketing interest in collecting, to decades-long licensing agreements changing hands, to the emergence of new opportunities including non-fungible tokens (NFTs) and collegiate name, image, and likeness (NIL) rights.

Some of the key trends to watch:

  • A pandemic-fueled rise in popularity. Interest in trading card collecting is cyclical, but it has reached a pinnacle in the past year and a half. On the secondary market, cards are setting records for items of their type: An autographed Michael Jordan 1997-1998 Upper Deck card went for $2.7 million, top dollar for one of his cards, while a Serena Williams rookie card hit $44,280, an auction record for a card featuring a female athlete. Specialty stores for new and collectible cards have been opening at a fast pace and seeing sales spike. This past May, Target temporarily stopped selling Pokémon and sports trading cards in its stores after an incident involving a gun in one of its parking lots. Other retailers took their cards off shelves and put them in secure locations and/or limited purchases due to fighting, stealing, and other bad behavior.
  • The entry of Fanatics. Fanatics disrupted the business this summer by signing trading card deals with Major League Baseball and the National Basketball Association along with their players unions, as well as the NFL Players Association. In each case the company offered equity in the business as an incentive. Many observers expect the National Football League to move its business to Fanatics as well. New products will roll out in the coming years as the licensors’ current agreements expire. (The NHL and its players’ association remain with their long-time partner Upper Deck, with a renewal announced in October.) Companies impacted by licensing turnover involving the major leagues and other IP owners include Panini, which lost the NBA and may lose the NFL license due to Fanatics’ activities, and Topps, which lost the MLB (after 70 years) to Fanatics and the WWE to Panini in a deal that came to light last week.
  • Collegiate NIL rights creating new opportunities. Since the U.S. Supreme Court ruling that college students could exploit their names, images, and likenesses, a number of group licensing programs and individual athletes have paired with trading card marketers to create a new industry segment. Onyx Authenticated put together a card set featuring collegiate football players, including Sam Huard, Bryce Young, D.J. Uiagalelei, Spencer Rattler, Matt Corral, and Kyler Gordon. Super Glow Trading Cards signed with collegiate football players including J.T. Daniels and Sam Howell, among others. Panini will market physical and digital trading cards for collegiate athletes through a group licensing deal with One Team Partners; the focus will be on football, men’s and women’s basketball, baseball, and Olympic sports. Panini also signed its first NIL memorabilia deals with football players D’Eriq King, Graham Mertz, and Matt Corral, with trading cards among the planned products.
  • NFTs making a mark. NFT trading cards are included in most new trading card deals now, whether as part of a digital-physical mix or as the focal point of digital-only deals. The NHL’s Upper Deck agreement includes NFT rights, for example, while mixed martial arts brand UFC and Panini recently added NFT versions of their physical trading cards. Properties such as the Professional Bull Riders/PBR (with SmartMedia Technologies) and NFL athlete Ron Gronkowski (on OpenSea) are launching NFT-only trading card programs. Digital trading card games are also proliferating.
  • More variety in IP. Properties beyond the major leagues are coming into the trading card market at a fast pace, through both in-house and licensed initiatives. New programs include MGA Entertainment’s L.O.L. Surprise! trading cards and trading card games; Cinedigm’s artist-driven Bloody Disgusting NFT cards on the platform; a new set of Pokémon cards featuring musicians such as Katy Perry and Post Malone, who contributed to a 25th anniversary album celebrating the property; Funko Pop! Trading Cards featuring NBA and NFL players, all including a Funko Pop! mini-figure in the same pose as the card; and PGA Tour cards with Upper Deck, returning after a seven-year hiatus. Topps alone has recently paired with Overtime Elite (OTE), a new league for young basketball players hoping to join the NBA; Lil Wayne, to celebrate the 10th anniversary of his album Tha Carter IV; and the Nippon Professional Baseball Organization, for trading cards and collectibles in Japan.

The upswing in primary and secondary sales of trading cards is not believed to be just a temporary COVID blip, although the business is unlikely to maintain its current high levels forever. While the reenergizing of hobbies across the board during the lockdown didn’t hurt, other factors have been driving interest in the pastime, even before the pandemic. They include consumers’ increasing passion for and knowledge of athletes, in part through fantasy sports; the rising popularity of properties beyond the U.S. major leagues, from global soccer clubs to women’s athletics; increasing fan engagement, as collectors share and discuss their new purchases and prized holdings on social media; and the proliferation of trading card unboxing videos, among others.

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