Behind the sports trading card industry’s rapid growth and what’s next

Dozens of sports figures from Tom Brady to Jalen Brunson to Auston Matthews were there, signing autographs and causing excited commotion as police entourages led them through the crowds and between the elaborate exhibits of the major sports leagues. The inaugural Fanatics Fest, which drew an estimated 70,000 attendees to New York’s Javits Center last month, was not only notable for its size and celebrity allure—but for what it signaled for the future of the trading card business. Fanatics seized a significant stake in that future two years ago when it purchased sports card stalwart Topps for $500 million. Fanatics Fest, as well as a recently launched marketing campaign, offer the clearest signals yet of the company’s growth strategy, as well as the potential of the larger industry. The show drew dozens of exhibiting sports card dealers and associated businesses like third-party authenticators that typically exhibit in school auditoriums and church basements. They were hopeful that the Fest could deliver a jolt of experiential energy to a hobby already riding a new wave of momentum, and deliver on its promise to turn more sports fans into sports card enthusiasts. “People don’t just wake up in the morning and think, you know what I should do, I should start collecting baseball cards,” said Michael Armstrong, senior VP of Fanatics Events, and a lead organizer of the inaugural Fanatics Fest, said at the event. “You’ve got to get them. You’ve got to put packs in hands, and you’ve got to get people to experience the kind of the joy and thrill of collecting, and then hope to sustain that.” Check out the latest Ad Age events and award programs Fanatics Fest may not have been for everybody—some collectors complained of chaos and noise—but before the weekend was over the two sides of the show united when Brady himself visited a dealer booth, reportedly buying five cards. Tom Brady buys a collection of football cards from a lifelong fan… pic.twitter.com/83y2NV7cB5— Topps (@Topps) August 18, 2024 Fanatics was already a giant in sports licensing through its apparel and retail businesses before it acquired Topps, months after outbidding the brand for its MLB trading card license. Michael Rubin, Fanatics’ founder and CEO, has said he envisions growing the industry by 10 times, in part by turning its retail and apparel customers onto card collecting, and through new products and marketing that would raise the profile of the hobby as a lifestyle. An ad that aired during the Summer Olympics embodied Fanatics’ new marketing strategy. “Joy” was the first brand-awareness spot in Topps’ history, and according to Fanatics is the first commercial in the industry that did not revolve around the launch of a specific product. The spot from Flower Shop tells the story of how a rare Shohei Ohtani card unites generations of collectors. (Ohtani last week signed an exclusive trading card deal with Fanatics). “Our objective is to elevate the collecting experience. This starts with a focus on the collector and the recognition that collections and, in fact, the journey of collecting itself, has value,” Ken Turner, chief marketing officer of Fanatics Collectibles, said in emailed remarks. “Joy” illustrated that journey while reinforcing the benefits of collecting, Turner added. “The response from the spot and the continued reinvigoration that we have seen in the hobby lets us know that we delivered against our objective.” Another recent Fanatics campaign, featuring a Topps’ Bowman label card picturing Brady as a member of the Montreal Expos baseball team, was a valentine to hardcore collectors. The stunt, which included an Easter egg-loaded commercial, was built on the supposition that Brady could have pursued baseball (he was an Expos draft pick out of high school) instead of football and had parallel success. Flower Shop did the creative. “We’re marketing in a way they just haven’t in the hobby previously, and frankly, the collectors and the hobby deserve it,” Andrew Goodman, VP of brand marketing for Fanatics Collectibles, told Ad Age about the “Geaux Brady” campaign. “You have to respect how much folks love this stuff, and we’ve got to take that seriously. I think it comes out in our marketing.” Breaking and repacking Estimates of the size of the sports card industry vary. A spokesman for privately held Fanatics said Fanatics Collectibles generated more than $1 billion in revenue last year; with baseball cards accounting for $640 million, up from $370 million when Fanatics purchased Topps. Sports cards are meanwhile driving a larger uptick in sports-related toys, according to Circana data. A signal of memorabilia industry strength was the record bid for the jersey Babe Ruth wore during his 1932 “Called Shot” game, which sold last month for $24.1 million. Experts say the card hobby gained strength during the pandemic, when homebound consumers rediscovered their childhood card collections. The sports world had also begun producing young athletes that excited collectors at that point including future NBA stars like Luka Dončić, Trae Young and Zion Williamson, said Jason Howarth, senior VP, marketing and athlete relations for Panini America, a competitor to Topps. “Can’t go outside, can’t go to live sporting events. What am I going to do? I think people just had that time on their hands to tap into nostalgia, blow the dust off the boxes and check it out,” said Troy LiCastro, an on-air personality for Dave & Adam’s Card World, in an interview at Fanatics Fest. The Buffalo, New York-based card dealer calls itself the world’s largest seller of unopened boxes of trading cards. Many of these consumers took their questions about the value of their collections to the internet, where they discovered thriving communities of card buyers and sellers and an entire language to describe the hobby, from the packages available (hobby boxes, retail boxes, blaster boxes, mega boxes) to the unique ways they are bought and sold. Playing on the adrenaline of the chase and the speculative nature of small investments that could pay off big, some approaches to collecting don’t differ much from sports gambling, another Fanatics division. Online “breaking,” a practice that emerged about 10 years ago, allows fans to divide the costs by agreeing in advance to each buy the cards of a certain team that come from an opened box (fans roughly know the quantity of rare items likely to be inside a box but not the particular cards a box contains). That’s revealed in the “breaking” or unsealing of the packages, which is broadcast live on social channels, dealer websites and apps. The market for single cards has been boosted by so-called repackers, who assemble “mystery boxes” of products bought on the secondary market and sell them at an average price of values across the collection—a kind of raffle whereby a $100 box could include a card worth as much as $500 or as little as $30, explained Nick Becvar, owner of Best Card Shop, an Indianapolis dealer exhibiting at the Fanatics show. Becvar said sophisticated buyers account for a lot of volume at both his shop and online, which includes a substantial breaking business. But the encouraging signal is bicycles parked outside his shop. “Kids are the future of the hobby,” Becvar said. “They’re getting into now, and they’re growing. As they get older, they’re going to be the ones that are spending a bunch of money on packs and boxes.” Also: Lego, Barbie and other toy brands chase sports deals Card manufacturers have learned from the so-called “junk wax” era in the early 1990s when the market was flooded with product, creating a supply imbalance and low values relative to eras before and after when cards were rarer. Today, rare cards drive the market—limited runs, autographed cards, cards containing fragments of uniforms, and so on—and it’s not unusual for collectors to place “bounties” on such cards rather than “chase” them as so many collectors do. For example, Dave & Adam’s placed a $150,000 bounty on an Anthony Volpe rookie card, LiCastro said, with shop reps flying to California to exchange the bounty for the card. At Becvar’s table, a rare Panini Caitlin Clark WNBA rookie card had an $18,000 price tag. “On the surface level, it’s a piece of cardboard, but it runs deeper than that,” LiCastro said. “It could be, I collected with my father. Or it could be, I’ve been going through a hardship and this money’s really going to help.” While the internet has facilitated buying, trading and merchandising, cardboard still rules the industry. Non-fungible tokens, once seen as a natural evolution for collectibles like sports cards, never really caught on, although Topps has a digital card business, said Clay Luraschi, senior VP, global product development for Fanatics Collectibles. “Before Topps was at Fanatics, there was a lack of investment in marketing—not just at Topps, but the entire industry. What Fanatics have done to support and help has just been monumental,” Luraschi said, speaking at the Fanatics Fest event. “They do commercials. We have many outlets for social media. We do shows like this. So it’s really taking a hobby, trading cards, which has always been really cool, fun, interesting, educational, something that’s connected to fans, and we put it more out there for everyone.” A growing fascination with athletes themselves is also behind the rise in the hobby. Panini’s Howarth noted name image and likeness rules that opened college athletes to advertising opportunities also opened the door to sports cards. Panini has high hopes for an exclusive deal with Texas quarterback Arch Manning, grandson of Archie Manning and nephew to Eli and Peyton Manning. It’s also plotting its strategy for the 2026 World Cup, he said. Athletes’ personal interest in sports cards is also driving interest, as many have looked to cards as a means to chronicle their careers. “Over the last three years, I’ve seen more athletes collecting cards, and talking about it on social than I’ve never seen,” Luraschi said, referring to a video (below) of baseball star Mike Trout and his son. @topps Mike Trout pulled an ICONIC card of himself with his son ❤️ #cards #baseball #fyp #fy #topps #collection #collectibles #mlb #tradingcards ♬ original sound - Topps Fanatics has aggressively gone after more licenses, and by 2026 will have exclusive NFL and NBA rights in addition to MLB, sparking some chatter of a breakup and an ongoing lawsuit from Panini, which decried the 20-year exclusive deals Fanatics forged with MLB, NFL and their respective player associations (Fanatics has countersued). Companies can produce cards without a license, as Topps currently does with the NBA, but without trademarks such as team logos or players pictured in uniform. Topps, with roots in the 1950s, has been down this road before. It tangled with competitor Bowman over unfair business practices in 1952 (Topps eventually acquired Bowman, which it uses today as a sub-brand), and lost its exclusive MLB deal in 1981, contributing to the abundance of companies and cards and the “junk wax” era. “Topps is a piece of Americana, and it’s synonymous in many ways in sports and it’s had its peaks and its valleys,” Luraschi said. “Now it’s hitting a spot that no one’s ever seen before. But incredible brands take time.”

Behind the sports trading card industry’s rapid growth and what’s next

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