Twitter Hints At Panini NFL Exclusive in Near Future – Could This Be the Hobby’s Worst Nightmare?

Yesterday on Twitter, rumors surrounding Panini obtaining the NFL exclusive were posted from a few sources. Although they are yet to be verified, its worth discussing the potential that Topps could be out of an NFL license for the second time since 2010. Although they were granted one back the same year, this looks to be of a different way.

As you all are aware, I am not a fan of Panini’s way of doing business or producing cards, and this would effectively end my desire to continue buying new football cards. From the comments on the forums, it looks like many people are saying the same thing.

This could also mark the second time since 2009 that Panini America has used massive untold riches from Panini International to bully their way into a League exclusive. It will also be the second time that co-production rights were removed from a company who produced a superior product. Topps and UD may have exlcusives in MLB and NHL, but both are the gold standard in those sports. We all can see how poorly that has worked out for them in the NBA, as Upper Deck was the NBA card market, and their older cards still dominate Panini at every turn even five years after the fact. Everyone should be equally as upset over this.

Potentially losing the superfractor alone is a huge blow, as it is the chase card style of each football season, out performing high end chases from every box Panini puts on the market. Lets not forget it comes from a box with an MSRP usually below 80 bucks.

Let me start off by saying exclusives fucking suck, which I have said numerous times during the course of this site. Go type exclusive into the search box at the top and you will see. I didnt like it when Topps got the MLB exclusive, or when Panini got the NBA excluisve. If this goes through as we are hearing, all four of the major sports will be under some sort of an exclusive agreement, and that only serves to hurt one group of people – the collector. Competition breeds creativity, quality and a race to innovate that doesnt exist when an exclusive is in place. Yet, we can see that the leagues dont seem to mind with the millions of dollars lining their pockets.

The scary thing is not that Topps will be out of NFL, because that is just sad and disappointing. We should be upset about that, but not scared. With Panini potentially taking over the NFL to match the NBA, it starts a ripple that will likely have implications hobby wide. Here is what those ripples look like.

Future Exclusives

As mentioned by a few people around the hobby, there will be two other opportunities for Panini to use their massive resources to force out the competition. The first is when Topps’ MLB exclusive comes up for renewal and the second will be when UD’s CLC exclusive comes up for renewal (which may already be happening based on years announced in the original deal). These two licenses are the last two dominoes that have the potential to fall, and its clear that Panini will stop at nothing to ensure they have the inside track. If they want, they can secure all four major sports licenses plus CLC to gain a likely illegal full monopoly over licensed trading cards (NHL will eventually fall). With the death of Richard McWilliam, UD is for sale, as is the Topps brand. Cards are not a profitable venture, and most of the companies are struggling to stay afloat. They are doing it, but not by much.

Panini on the other hand, thanks to international sticker sales, has a ton of money – which is both good and bad. Good in the fact that it might provide some leverage in keeping the industry going if something bad were to happen, but bad in the fact that they can use it as a method of achieving manifest destiny. Again, it would be one thing if they were the top in quality (ha!), but they have shown they are more concerned with creating a spectacle of their brand than a product worth buying. Right Panini VIP party?

What you might not understand is how much product of theirs is sold at a drastically reduced cost based on numbers from dealernet, and still unable to be cleared from card shop shelves (which I am sure you have witnessed personally). The distributors may have their own ways of clearing product, but the true drowning swimmers will be the people who need to eventually sell to the end user.

The hobby should be tense about this, because Panini is slowly creeping their grubby little fingers into every last aspect of the hobby. Could they potentially turn things around and make great products? Of course they could, but without competition, where is the incentive?

History / Notoriety

Since the 1950s, Topps has had a long line of continuity that has become ingrained the NFL’s culture. This history, though sordid, is important to the hobby in more ways than I can count. Topps’ history is literally unparalleled in cards and it needs to be considered that in the potential future, there will be top NFL rookies who do not have a Topps football card for the first time in over half a century. Im sorry, but that just cant be acceptable for them to be forced out like this. If they had left on their own, that’s a bit different, but using money to bait the NFL into ending that run kills off a piece of Americana that Panini will never claim.

Similarly, Panini’s football brand is not known at all outside the hobby. They have no football card brand awareness, and that is a huge problem if they are looking to grow the hobby. Topps has made national news on a number of occasions over the last five years, from big sales, to cards like the Sheen Major League auto. News agencies are more friendly because everyone knows what Topps is all about. They grew up collecting Topps cards, and the 52 Mantle remains the most Iconic card that isnt a Honus Wagner with 50 copies. Everyone is familiar with that card, and though Topps isnt leaving baseball, this branding has an impact on growth in the NFL. That is a big deal when you can ask the average joe if they know what Topps is and they can point to sports cards. Panini has none of that.

Grading

I cant believe I am saying this is an issue, but I can guarantee it will come up. So much of the grading element comes from Flagship, Chrome and Finest in football, that the grading companies are likely going to lose an entire sport here. Sure Contenders has some share of the market, but nothing like Topps’ chrome product line. Prizm is a disaster, no one buys Spectra, and Select is awful, which means no one will want to pay the money to have the cards graded as much as they would the Topps’ equivalent. If something changes drastically, who knows, but the outlook is grim. I heard from an insider that the percentage of Chrome vs the field is so drastic that Panini should be concerned. Well, its time to stare down a potential nightmare scenario.

Group Breaks

Football and Group Breaks go together like Peanut Butter and Jelly, as the structure of the products in the NFL lend itself very well to breaking in group format. Because the group break companies have woven themselves into hobby consciousness so fundamentally over the last few years, this type of switch will likely serve to burst that bubble and then some. Panini has made no secret of making buddy buddy with the bigger guys, but if they need to put out 20-30 products a year to support a ridiculously expensive exclusive, we all know what will happen. Panini has a HORRENDOUS track record in football when needing to create new brands, and there will be no safe haven for collectors who are tired of the same shit over and over and over and over and over again. Panini may have one fluke success per year, but outside Contenders and Treasures, they are not known for strong or even nominal brand performance.

Pricing

Lets play a game of “Remember back.” Do you all remember back when Panini instituted the Minimum Advertised Price Program? They basically said to everyone that they were going to require a fixed price floor rather than allowing for previous models to happen. It went over like a fart in church for good reason.

You can bet that the more exclusive their clamp over the four sports becomes, the higher the prices will eventually get – especially if MAPP is enforced. Not only are league licenses expensive, but they are horribly taxing to maintain. Products will not jump immediately, dont get me wrong, but they can easily push the price up without adding content. They may actually need to do that just to ensure that they can cover operating costs. This isnt guaranteed, but we have seen it in the past.

Spending

Sure, Panini has made the right choices in marketing their products, providing better customer service, and engaging with the collectors. However, those choices are all independent of how the products are structured and fulfilled. Topps may have serious fucking issues with a lot of different things, but their products are superior in just about every way because that’s where the money goes.

I have noticed that Panini runs their company more like someone who hasnt ever been rich before. The places they choose to spend their funds make me roll my eyes, and it seems like they are throwing money around just to show that they have it. Think of the way a young millionaire would spend their money vs a grizzled businessman who had to fight and claw their way to riches. Panini is the guy you see making it rain at the strip club, and flashing rolls of hundred dollar bills at a party. When you live like that, it will show in other parts of your life. For Panini, they can have huge parties and star studded extravaganzas, but they have yet to figure out what makes a card product that people will buy. Kind of makes you think that Johnny Manziel and Panini are kind of made for each other in that way.

The thing is that American culture is sort of moving that way, and kids idolize those that can show how well off they have it.

Conclusion

If these rumors turn out to be true, we have a lot of thinking to do. We also have the right to take action in an environment that feeds off community vocalization. Write letters, send emails, tweet everyone and tell them you are not happy. If you are happy, that’s your choice, just realize the ramifications of what could happen as a result. No one can deny that monopolies are illegal for many reasons, but that seems to be the way we might be headed.

Panini has a lot of things going for them right now, regardless of the potential exclusive, and that’s a fact. However, I have had too many discussions with too many people to agree that this is the direction the hobby needs to go. When a company clearly has manifest destiny higher on their priority list than market health, lack of competition may not matter. Panini needs someone on their staff who knows how to run a card business, because in my opinion, that doesnt exist over there. Lucky for them, there might be a growing pool of people who do.

21 thoughts on “Twitter Hints At Panini NFL Exclusive in Near Future – Could This Be the Hobby’s Worst Nightmare?

  1. “Topps and UD may have exclusives in MLB and NHL, but both are the gold standard in those sports.” One correction . . . Upper Deck doesn’t have an NHL exclusive. They share the sport with Panini right now.

  2. I agree with you 100 Percent. That being said I was once you being a crusader for the Hobby, but the bottom line is most if not all people in the Hobby give a shit. I shutdown my store about a year and a half ago and can tell you nightmare stories that I experienced dealing with each of the manufacturers. Most dealers and store owners in this business are sheep and do not have a backbone to stand up to the licensors, manufacturers or distributors. I wrote numerous letters at the Hobby conferences in Las Vegas and I was portrayed as a troublemaker. Everything that I said then was true, as were my predictions for the Hobby. This will continue to get worse. Thanks goodness for store owners that 2014 has solid rookies. But what happens when we have mediocore to poor rookie crops? The bottom may or may not ever fall out, but you just have to find ways around the structure of this hobby in order to succeed. I have more flexibility now since I closed my shop. Its just like the banking business at some point in time people will eventually have no use for them as well as the people who run them, who should mostly be in jail. Its great that you are so passionate, but don’t stress yourself too much. Hopefully at some point in time there will be somebody out there who can turn all this around, but don’t hold your breath. I have tried to talk and reason with manufacturers and licensors for years. There are just too many morons at the top of this hobby, that have their own agenda and you will continue to fall on deaf ears to all of them. Good Luck to you, Larry.

  3. I believe they were just granted the NHL exclusive. A few months ago.

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  5. Great article as usual. I want to say I enjoyed it, but this topic is scary. I completely agree that besides national treasures, contenders, and their higher end (but overpriced) basketball products, the rest of their inventory is garbage. That’s what I like about topps and ud- they at least make good products from top to bottom. Lucky for me, I primarily collect baseball so hopefully topps can keep control that sport, because you definitely won’t find me buying a box of prizm baseball, even with a license!

  6. I hate to be such a negative Nancy but at this point, who cares? Really. Most of Topps product is just as watered down as Panini’s. Topps uses the same pictures over and over and the same card design in multiple sets and across multiple sports (baseball/football).

    Chrome is a fun product but it’s way, way, way over-hyped by fanboys. With the exception of Chrome, what are we really missing as collectors if Topps leaves?

    Let me be clear, I don’t want to lose Topps for my NFL collecting needs but at the same time, the football collecting experience as a whole has been on a slide in the past few years. This actually might be the kind of event that helps the hobby hit “rock bottom” and maybe makes things better in the long run.

  7. OK you scared the hell out of me with the CLC license… UD has done a great job with it. Their base football set is the one I look forward to every year. Panini would be a disaster with it. Huge basketball fan and I barely buy NBA packs anymore. Grab my Hawks (yes, one of the 12 Hawks fans out there) and I’m done for the year. It’s depressing.

  8. If Panini indeeds get the NFL exclusive licensing, it will be a very sad day for collectors who primarily collect football cards like me. I hope it won’t mean that I will be leaving the hobby and what likely will happen is that I will be spending my money on Topps and UD cards on ebay instead of purchasing crappy, vastly overpriced new Panini products.

  9. Like you touched on in the article, if Panini gets an exclusive, I will be done with any new football. I will work my way back collecting older Topps sets and putting my money solely in the secondary market. Panini will get none of my money. Period. This whole mess is horrible for the hobby and collectors alike.

  10. I find it laughable that anyone would Topps products are just as “watered down” as Panini products. That’s just wrong. I’ve got to believe shop owners are scared to death about these rumors. I know I personally won’t be going anywhere near a card shop if this happens. I mainly collect football cards. The best card shop in Colorado is Mike’s Stadium Sportcards. I drive an hour twice a month or more during the season to get cards and talk to Mike. I absolutely Chrome, Finest, Platinum, and Five Star. There would be very little reason for me to make that drive if Topps were gone. Contenders is about the only Panini product I’d even remotely have an interest in and that alone wouldn’t be worth the trip up to Denver. I could order that from Blowout or Dave and Adam’s and not waste my time or gas making the drive. Panini does do a much better job reaching out to customers via social media and the web, but I think that’s more a sad indictment of how bad their products are most of the time. They need to stay engaged more to keep collectors happy due to their products being so poor. Hey, at least my wife will be thrilled I’m not spending so much money on football cards anymore!

  11. It was the worst of news, it was the best of news… Worst news for me as a collector because all I buy is football and I only buy Topps products… Best of news for my finances or another hobby as Id have a minimum 5 figure cash flow freed up for something else…

    Who cares how the customer service, marketing and twitting is if the product is crap.

    Kids may idolize those that show how well off they have it but that doesnt hold true to companies. Its about tangible product and if youre the only game in town and your product is not a necessity you better not make crap because soon there wont be any game in town…

    Panini may have vast sticker resources but why would they (over)spend to get an exclusive if the card business is as bad as everyone claims… wouldnt a better move be to buy part or parcel of UD or Topps and maybe some of the resources and rep that goes with it…. create an exclusive by dividing the pie amongst fewer entities

    I was just talking about this yesterday with a LCS in my area. Im sure there are some who claim to like paninis products but outside nat tre, contenders and prizm I couldnt name a product. I still dont understand why they make baseball or why anyone would buy unlicensed baseball.

    All that said whats our recourse?

    Who in the NFL and the player’s union do we send our thoughts to?

  12. The yearly Topps Football and Topps Chrome Football are just iconic. No set Panini offers or can offer can ever match the classics that Topps puts out. I started collecting in 2009 and stuck with UD and Topps, I wasn’t even aware Panini existed, nor did I care. I was looking forward to 2010 products from UD only to find out there weren’t going to be any. It was a real let down, however I still had Topps, which still put out a better product than UD. I can never accept SCORE over the yearly Topps Football, that’s just sacrilegious. Topps puts out a more uniform and more friendly product with a huge reputation and history behind it. Panini Football sets look so cheap and really send out that “wanna-be” vibe. 2014 Panini products really aren’t helping Panini’s push to obtain the exclusive because so far their products are god awful. How many times can you use those dreadful sideline shots on RC’s? For the past couple years I buy UD’s College football set for the draft class in their official college uniforms, that’s a pretty sweet way to spend an off season and then I buy Topps in the fall. I will buy some Panini singles here or there, but Topps is it man. I will have a breakdown is Topps is pushed aside for the garbage that is Panini.

  13. Right now, all this is rumors and speculation. I love Topps, Upper Deck , Panini and Leaf products. I want them all to remain and thrive forever. At the same time, I believe it is a fact that sports card manufacturing is not a hugely profitable business. The key word here is “business.” If a business is not making enough profit, the owners will redirect their efforts and money. The 2014 football product year is shaping up to be the best ever for all manufacturers. However, there has been an overall consistent downward trend for many years. And, who knows how 2015, 2016, and 2017 will look?

    As is often said, only the strongest (fiscally) will survive. And, although exclusives may not result in the most innovative, aesthetically beautiful cards, exclusive rights give the remaining manufacturer the likelihood of remaining profitable and thus continuing the hobby’s existence.. However, I believe that exclusives are not the best answer to the situation.

    The main problem is not enough people collect cards. I estimate there is only ONE sports card collector for every 10,000 sports fans. We, on the business side of the hobby need to figure out what is keeping this huge group of fans from collecting. While I have my opinions on the solution, my opinions won’t influence the manufacturers. They have to figure it out for themselves. I will just say, they need to put more effort into expanding the customer base or hope they someday get exclusive rights.

  14. I think you are correct that this is a business move, but you are failing to see the long term effect this may have on said business. Panini is just trying to solidify an atmosphere with zero competition, and as a business move, that is not going to be good for the reasons I explained. The amount of money they are paying for current licenses is already not profitable, and the rumored amounts they are paying for the exclusive on NFL is so far beyond the scope that it could be a complete implosion. Who knows. They could turn it all around, but if basketball is any indicator, I have a better chance of winning the lottery than that happening.

  15. Regardless of how this play out, one think that is very clear to me is how completely unstable this hobby is. I started collecting football cards around 3 years ago and Topps seemed to be the ‘safe bet’ in terms of longevity (particularly Topps Chrome). I focused my collection on Chrome with a sprinkling of Five Star, Contenders and NT. I’m now faced with this news. It really makes me question the hobby’s potential to provide any sort of continuity and long term investment.

  16. I want all existing manufacturers to remain in the game and do well. I agree competition results in ingenuity. I believe that exclusives are not good for the hobby. However, business is business and profit is the deciding factor. Each company does what is best for their business future which includes their customers happiness.

    I don’t believe the NFL looks at sports cards collectors as NFL customers. Otherwise, they would be more involved in promoting the hobby to NFL fans and expanding the card collecting base. The NFL looks at the NFL license as just a revenue stream. If one company is willing to offer enough money for exclusive rights, the NFL will probably say, “Fine with me.” However, I believe accepting exclusive rights to one card manufacturer is NOT best for card collectors and NOT BEST FOR THE NFL.

    The NFL should team with their sports cards manufacturers to expand the hobby and insure it is very profitable. In doing so, it will make their license more valuable and they can charge more for the license next time it is renewed.

    I am amazed. Why don’t more sports fans collect sports cards? The general answer I get from non-collectors in my store ( I know it is a very small sample but I get parents whose children drag them into my store), is in the form of a question. “Do people really pay money for these things?” They don’t believe the cards are worth the price tags. The price tags on cards need to be in line with the cost of the product (Topps Chrome, Panini National Treasures). Since price tags eventually are in line with “Supply and Demand,” the business side of The Hobby needs to expand overall (singles and boxes) demand.

    I don’t have time to write a book on how to expand the sports card collecting customer base. And, I know I don’t have all the answers. However, expanding the customer base is a “No Brainer” when it comes to business goals. The NFL and the card manufacturers need to get together with an overall business strategy. It will be mutually beneficial.

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