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.
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.
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.
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.
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.
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.
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.