NoOffseason.com now has reliable inside sources in the sports card industry who are willing to feed us inside information for this new column, Our Sources Say.

From time-to-time, I will be able to bring you inside information, pulling back the curtain on the business side of the hobby and turning what otherwise is gossip and hearsay into hopefully useful and interesting information.

In this edition, I dive into a topic that many of you may already be familiar with, the fact that Fanatics is poaching dozens of (upwards of 30+) employees from Panini, including key executives and product development professionals.

Note: for those of you not familiar with the term - product development - these are the people that essentially create, product manage and execute each release, including the checklists, parallels, autos, design, production runs, release dates, quality control and even distribution.

What Actually Happened To Cause This:

Our sources say Fanatics was about to acquire Panini in the Fall of 2022, and an announcement was planned for The Industry Summit, which took place from October 2-5, 2022 in Las Vegas, Nevada.

The deal was done and ready to be signed, but due to some last minute language that Fanatics snuck in to protect themselves in case of an antitrust lawsuit, the deal was nixed by Panini’s owner when he received the paperwork in Italy. Panini even canceled travel for their employees to attend the 2022 Industry Summit, due to the deal falling through at the last minute. This information apparently was kept private at the time, and Panini employees ended up attending The Industry Summit in spite of the deal falling through due to Panini’s owner pulling out as a result of the anti-trust language protecting Fanatics.

As a retaliation of sorts, The Fanatics-owned Topps Company then purchased the manufacturing plant that Panini had relied upon to produce all or at least most of their releases. This put the squeeze on Panini, and continues to hinder their ability to produce cards to meet the market demand. This - not necessarily just “supply chain issues” are some of the real reasons Panini has had to consistently push back release dates over the last several months.

Then, last month in March 2023, just before The Mint Collective in Las Vegas, Fanatics was about to acquire Panini yet again, and our sources did not have the exact numbers, but told us with extreme confidence that the two sides were 2 percentage points apart, and Panini’s owner was not willing to come down 2% to close the deal.

This saga of two missed Panini pull-outs and Fanatics squeezing Panini out of the print calendar has led to Fanatics now poaching all of Panini’s employees away - at least those who are capable of creating sports cards, our sources say.

Gone from Panini are the VP of Product Development, VP of Acquisitions, three acquisition directors, four product development directors and more.

Our sources say Fanatics is also giving them all significant bonuses, on the condition that they resign and leave effective immediately and not give a standard 2-week notice.

“Now Panini is in shambles,” our sources say. “In fact, yet again today, Fanatics poached three more product development people from Panini.

Fanatics has also posted 130+ sports cards-related jobs on their website, and Fanatics Founder/CEO Michael Rubin posted on Twitter recently a tour/preview of the new Fanatics Collectibles headquarters office in Dallas, TX.

Why This Matters:

In such a niche industry, there are only so many individuals who have experience in the art form of producing mass releases of truly collectable sports cards. As we know, it’s ultimately the collectability that creates demand. Demand translates to desirability and when combined with scarcity we have invest-ability, which is what we all really care about.

Now that Panini is left with less than a handful (literally maybe only one - according to our sources) people with any product development experience, and a lack of production facilities, the short term looks bleak for the production of Panini products.

Let’s dig into licensing for a moment.

Our sources say that Panini’s NBA license ends in summer of 2025, and NFL license ends in spring of 2026.

That’s still a ways away for a company that now has almost zero people capable of producing sports cards.

“They have almost nobody there that can currently make product,” our sources say. “There's a lot that goes into making these cards, and unless Fanatics can pull off an acquisition….”

…there seems to be a potential gap in quality produced NBA, NFL, and even UFC / WWE licensed cards, (I filled in the rest of that quote for our sources), and they agreed with me.

Short Term Impact:

“Not good,” our sources say. “It seems unlikely that these sides are willing to work with each other. We’re worried that for the next 2-3 years, if Fanatics is unable to pull off an acquisition, that means this depleted Panini team is going to be the one making licensed NBA and NFL cards for the next 2-3 years, and they quite frankly don’t have the people to do it. It’s a very niche industry, with (very few) people that know how to make trading cards. People don’t know all that goes into it. 95% of the people we know that have ever worked on a trading card product from start to finish - design aspect, editorial aspect to taking it to print - to product distribution - including the ones that get the autographs into those products, they’re all now Fanatics employees.”

What happens now at Fanatics is likely that they will leverage their relationships and experience to produce non-licensed releases for basketball and football until they take over the licenses in 2025 and 2026. “These will be like Panini baseball products are now,” our sources tell us.

Our sources say the first non-licensed football releases are likely to come in the form of exclusive deals with top 2023 NFL Draft prospects like Bryce Young, CJ Stroud, Will Levis and even Bijon Robinson.

This would mean Panini could make their cards under the licensing agreements, but those cards would not have those players autos on them.

What could hurt Panini even more in the short term is Fanatics’ ability to sign athletes to exclusive deals due to their powerful connections among athletes, agents, player reps - not just leagues.

“Imagine if most of the top names in the NBA and NFL started signing exclusive deals with Fanatics from now through when the licenses are handed over. You could literally have top players with all the cards, except no autos. This would hurt Panini even more,” our sources say.

Long Term Impact:

“Our long term concern was that they didn’t have anyone who could make product,” our sources say. “People don’t realize that it is a long process to make a product. They start working on products 8-12 months in advance. To get the autographs back and put the checklists together. Each product has budget requirements. Budget may dictate not only design, but how many autos get in. There’s a lot of work-through on that. And if you don’t have the right people who can work through it, then we don’t know how you handle that.”

But now that Fanatics has those people, our sources feel confident about the future of the sports card releases coming from Fanatics once all major sports licenses are with Fanatics.

What about Hockey, Golf … Upper Deck?

When I was at Mint Collective, Fanatics executives said they were very interested in talking with Upper Deck about acquiring their company that owns the NHL license. Our sources say Upper Deck is not as interested in an acquisition but ... Fanatics just signed exclusive rights for NHL game worn jerseys and memorabilia, scheduled to start in approximately two years, meaning they have extreme interest in the NHL market, specifically collectibles.

Thanks for reading the first edition of this new piece. As our sources tell us more, NoOffseason.com readers will always be the first to know.

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Paul Hickey is the founder of NoOffseason.com, home of the Sports Card Investment Report and The Sports Card Strategy Show. He is also a contributing writer for Sports Card Investor.