In response to Panini America filing an antitrust lawsuit against Fanatics in Florida district court on Thursday, Fanatics has countersued in the Southern District of New York.
Panini America, the company that currently has league and players' union licenses to produce NBA and NFL trading cards, alleged that Fanatics, which acquired Topps in early 2022 after winning future MLB exclusive rights in late 2021, has "created an entirely new monopoly spanning multiple leagues and multiple players associations" in the industry.
Fanatics, in response, is "seeking damages and other appropriate relief [...] in order to remedy Panini's unfair competition, tortious interference with business relations, and breach of duty to negotiate in good faith." Panini has had the exclusive licenses to produce NBA cards since the 2009-10 season and NFL cards since 2016.
Panini's union deals with the NBA and NFL expire in 2025 and 2026, respectively. Fanatics has a 20-year deal in place with the NFLPA starting in 2026 and will also become the exclusive licensee of NBA cards, with deals in place with the league and union, the same year. A source from Fanatics confirmed Thursday that league rights with the NFL have been signed.
The sports trading card industry is expected to eclipse $60 billion by 2027.
In its lawsuit, Panini alleged it was not "given an opportunity to bid or otherwise compete for the licenses Fanatics acquired" and "only learned about Fanatics' exclusive agreements after they were consummated, through reading about them in the media."
In the countersuit filed Monday, Fanatics alleged that "as Panini's licensing deals neared expiration, licensors unsurprisingly chose Fanatics Collectibles as their new licensee that would commit long-term to the business" as Panini America has "openly [been] trying to sell its business for a decade." Fanatics also alleged that Panini America didn't acquire its current licenses via bidding. Panini bought Donruss Playoff in 2009 and took over that company's NFL and NBA licenses.
Panini alleged that Fanatics CEO Michael Rubin approached Panini this May "to threaten that Fanatics would no longer supply Panini with any jerseys for Panini to offer to consumers as elements of its trading cards" and "would not stop its pressure campaign against Panini and [would] continue to sign exclusive deals with players."
A source at Fanatics told ESPN on Thursday that the company has been engaged in conversations with Panini for a year to transfer the rights it had won earlier than the NBA and NFL deals' expiration.
Fanatics' lawsuit says that a deal in principle to terminate the licenses early was in place "in the spring of 2022" with "a target effective date of July 31, 2022."
"They gave numbers that were inflated by $200 million a year on profits," the source said, alleging that Panini threatened a lawsuit if the deal wasn't completed.
That allegation appears in Fanatics' suit: "Panini's [owners] embarked on a protracted, unlawful, and deceitful campaign of unfair trade practices, strong-arm tactics, and tortious misconduct to hamper Fanatics Collectibles' nascent business" in the hopes to force a deal, and, when that failed, "switched tactics and began a campaign of harassments in the courts."
Fanatics' suit alleges that Panini brought suits against "at-will former employees" without noncompete restrictions who took jobs at Fanatics and that it threatened to do the same to others. Fanatics consented to "a contemporary injunction" barring seven former Panini employees from recruiting others away or using confidential information.
In Monday's suit, Fanatics calls the antitrust allegations in Florida "factually inaccurate, legally incoherent, and ultimately upside-down."
At the time of publication, Panini America could not be reached for comment.
On Thursday, a Fanatics source said the company believes it won its deals "fair and square, one at a time."
"Our perspective is all the claims are baseless," the source said. "We do what's in the best interest of the collector, the hobby, the industry long term."