Did you ever think a sports card and collectible company could be valued at $10.4 billion?
Well, that’s the world we live in now, as Fantatics Trading Cards, a new collectible unit of Fanatics, now has that valuation after a round of financing from Sliver Lake, Insight Partners and Endeavor brought in $350 million.
Keep in mind, this is a new company. They have yet to produce a single card yet.
So, why and how could they have that massive of a valuation? A story in Axios laid it out this way. Because the current trading card market generates roughly $1 billion in EBITDA. Fanatics Trading Cards just recently won long-term licensing deals with the top players’ associations and professional sports leagues. So, Fanatics Trading Cards can leverage the vertical commerce model of Fanatics to increase the top and bottom lines.
With much of the industry growth coming from NFT’s, it’s interesting to note that Fanatics Trading Cards is going to primarily stick to the traditional cardboard trading cards that people grew up with.
The digital NFT’s will be handled by Fanatics with a new platform they call Candy Digital.
Topps is a competitor of Fanatics Trading Cards that has been an industry leader for decades, and they were supposed to have a SPAC deal in place that would value their company at $1.3 billion, but that deal evaporated after Topps lost out on the MLB and MLBPA licensees that went to Fanatics.
Panini had the NBA and NBAPA deals they were hoping to close taken from them by Fanatics Trading Cards too. Panini was looking at valuation of $3 billion if they had secure those licensing deals.
Bottom line; Fanatics is not playing around.