

Discover more from Huddle Up
Fanatics Acquires Topps For $500 Million
Huddle Up is a daily letter that breaks down the business and money behind sports.
Join more than 52,000 professional athletes, business executives, and casual sports fans that receive it directly in their inbox each morning — it’s free.
The Email is Sponsored By….
I found Public Rec’s All Day Every Day Pant last year and haven’t looked back since.
They have a rare combination of comfort and durability while providing the perfect amount of softness and stretch. Do you want to wear them to work? They look great. Or maybe you want to play golf in them? That works also.
I highly recommend checking them out, and today is your lucky day because Public Rec is offering a 10% discount for all Huddle Up readers.
Hey Friends,
Most of you probably remember that Fanatics shocked the sports world this summer when they surprisingly announced that they were launching a trading cards business.
They quickly signed exclusive deals with the NFL, MLB, and NBA by offering them equity in the business and then raised $350 million at a $10.4 billion valuation.
Within weeks they went from a business that literally didn’t exist to a $10.4 billion valuation and one of the most influential companies in sports.
Here’s a quick recap of what I wrote in October:
Fanatics has been the hottest topic in sports business all summer.
Just weeks after announcing a new trading card business and exclusive deals with the NFL, MLB, and NBA, Michael Rubin and his team have raised a $350 million Series A funding round that values the newly created entity at more than $10 billion.
The $350 million capital raise comes from a trio of investors, including private-equity giant Silver Lake, entertainment conglomerate Endeavor Group, and Insight Partners, a private-equity shop & venture capital firm with over $30 billion in assets under management.
Here’s roughly how the Fanatics Trading Card cap table looks after the investment:
Michael Rubin owns slightly over 80%
NFL, MLB, NBA, and their unions own about 14%
Silver Lake, Endeavor Group, and Insight Partners own about 3.5%
This new business, called “Fanatics Trading Cards,” is an entirely separate entity from the $18 billion sports-merchandise retailer “Fanatics” that Michael Rubin has been building since 2011.
As for Topps, they weren’t as fortunate.
Roughly 60% of their annual revenue came from trading cards, and when their 70-year relationship with Major League Baseball abruptly ended because of Fanatics, they were forced to call off their plan to go public at a $1.3 billion valuation.
Topps 2020 Revenue Breakdown
Physical products: $312 million (55%)
Candy Products: $198 million (35%)
Digital products: $35 million (6%)
Gift Cards: $22 million (4%)
But now everything is coming full circle, and Fanatics CEO Michael Rubin appears to have pulled off one of the most remarkable business moves in recent memory.
Here’s what I’m talking about — news broke last night that Fanatics has agreed to acquire Topps, and although terms of the agreement are not public, CNBC is reporting that the deal is worth roughly $500 million.
So for those keeping score at home, here’s what happened:
Fanatics launched a trading card business six months ago.
They brokered exclusive deals with the NFL, MLB, NBA, and its player associations by offering them equity in the new business.
Topps watched its valuation crumble after losing the exclusive MLB license and was forced to cancel its plan to go public at a $1.3 billion valuation.
Fanatics used its new exclusive licenses as leverage to go out and raise $350 million at a $10.4 billion valuation without ever producing an actual card.
Fanatics then used that fresh pile of cash to buy Topps for $500 million, representing a massive discount to their previous $1.3 billion valuation.
Yet the craziest part might be that Fanatics still owns slightly over 80% of the business, meaning that Michael Rubin created more than $8 billion of value for himself and his company in less than six months without selling a single product.
Some might call that insane and a sign of the frothy capital markets that exist today, but more likely, it’s just an unbelievable entrepreneur doing what he does best.
Now, to be fair, the $500 million purchase price only includes Topps’ physical and digital collectibles business, not the candy & gift cards business that represents 35% to 40% of its annual revenue. Still, whatever way you want to look at it, Fanatics ended up getting a massive discount on one of the most iconic brands in sports history.
As they say, if you can’t (or don’t want to) build it, just buy it.
But when Fanatics started acquiring these exclusive rights last summer, the main question was always going to be how they handled marketing, inventory, and distribution for a business they had no experience operating.
Now we have that answer, with early reports suggesting Fanatics plans to plug into Topps’ existing product and enhance distribution through their current database of 80 million-plus customers.
We’ll see what happens. Fanatics still has a few years before they take over as the exclusive trading card provider for these leagues, so it will probably take a few years to play out.
Still, what they have already accomplished in such a short period is super impressive, and it’ll be interesting to see how big this company gets. But if I know one thing for sure, it’s that I wouldn’t bet against Michael Rubin. He’s proven to be a world-class entrepreneur.
I hope everyone has a great day, and we’ll talk tomorrow.
Your feedback helps me improve Huddle Up. How did you like today’s post?
Loved | Great | Good | Meh | Bad
Huddle Up is a daily letter that breaks down the business and money behind sports.
Join more than 52,000 professional athletes, business executives, and casual sports fans that receive it directly in their inbox each morning — it’s free.
THE JOE POMP SHOW: My conversation with Nigel Eccles is live!
Nigel Eccles is the former co-founder & CEO at FanDuel and has spent the last few years building multiple businesses that uniquely straddle the creator economy, sports betting, web3, crypto, and more.
We discuss:
Raising $450 million in venture capital
Finding product-market fit at FanDuel
Ethereum vs. Solana
The future of DAOs
Regulation in crypto
Lessons from 20 years of entrepreneurship
Please listen, subscribe, share, and enjoy!
You can also watch the YouTube video below.