If you can’t beat ‘em, get bought by ‘em.
Trading card giant Topps — just a few months after losing out on a deal to renew its longtime licensing deal with Major League Baseball to sports apparel startup Fanatics — is now selling its collectibles and cards business to … Fanatics.
Sources close to the deal told CNN Business that Fanatics was paying $500 million for the more than 80-year-old Topps, which started out as a chewing gum company in 1938 and began selling baseball cards in 1951.
Fanatics had been set to become the exclusive trading cards licensee for MLB in 2025, when Topps’ deal with the league was set to expire. But Fanatics said Tuesday that as a result of the Topps acquisition, it will immediately begin to design, manufacture and distribute baseball cards.
Fanatics has clear aspirations to become a giant of the sports business world. The company fortuitously opened a new store in Los Angeles in May that focuses on apparel for the popular Paris Saint-Germain soccer club — which lured legend Lionel Messi away from Barcelona several months later. Fanatics struck a 10-year merchandise deal with PSG in 2020.
The core Fanatics retail business is valued at $18 billion, based on its most recent round of financing last August. A source close to Fanatics told CNN Business at the time the company raised $325 million from various investors, including rapper/music mogul Jay-Z, MLB and venture capital firm Silver Lake.
Sources close to the company said Tuesday that Fanatics’ expanding trading card business is now valued at more than $10 billion and that its Candy Digital non-fungible tokens (NFT) unit is worth about $1.5 billion.
That implies a total valuation for all of Fanatics’ businesses at around $30 billion. Fanatics is one of several private “unicorns” expected to go public some time in 2022.
“With trading cards and collectibles being a significant pillar of our long-term plans to become the leading digital sports platform, we are excited to add a leading trading cards company to build out our business,” said Fanatics CEO Michael Rubin in a statement Tuesday.
Topps is currently owned by Tornante Company, which is run by former Disney (DIS) CEO Michael Eisner, and private equity firm Madison Dearborn Partners.
Topps was planning to go public through a merger with blank check firm Mudrick Capital Acquisition Corporation II (MUDS), or MUDS, last year. But the trading card icon spiked the planned $1.3 billion transaction after Fanatics announced its new deal with MLB.
Tornante and Madison Dearborn are holding on to Topps’ candy and gift card businesses and rebranding as the Bazooka Companies after the company’s famous chewing gum.
“Like any crown jewel, I and my partners at Madison Dearborn will miss our many years of ownership where we grew a highly profitable business through strategic licensing partnerships, global expansion and digital transformation,” Eisner said in a statement. “We’re proud of what the Topps team has accomplished.”