Fervent Supporters Allegedly Coordinating With Sports Leagues and Labor Unions over Expensive Game Memorabilia Costs
In a series of legal challenges, sports apparel giant Fanatics is facing accusations of monopolizing the trading card market by securing long-term, exclusive deals with major sports leagues and players' unions. The latest lawsuit, filed by Phillip Jones, a resident of Phoenix, Ariz., alleges that these exclusive licensing agreements have artificially inflated prices for sports trading cards.
The lawsuit, filed in the Southern District of New York, accuses Fanatics of deceptive trade practices, violating antitrust laws, and related laws. The plaintiff seeks certification as a class action on behalf of consumers who purchased newly issued, fully licensed major U.S. pro league trading cards produced by Fanatics since January 1, 2022.
Panini, a leading competitor in the trading card industry, sued Fanatics in 2023 for antitrust violations, alleging that Fanatics attempted to monopolize the market by securing long-term, exclusive deals with major sports leagues and unions. The court has ordered Fanatics to turn over unredacted contracts as part of the discovery process, which Panini claims are central to their case against Fanatics. The case is still in the discovery phase, with no trial date set yet.
A separate antitrust lawsuit against the NFL and Fanatics was dismissed due to lack of standing. This case involved allegations of stifling competition and driving up prices but did not specifically address the trading card licensing deals.
The lawsuit against Fanatics contends that the company engaged in these deals through "back room" moves and "without any open bidding process." It also alleges that Fanatics offered equity stakes in "future monopoly profits" to leagues and players' associations to secure exclusive licensing deals that last as long as 20 years.
Fanatics bought Topps, a significant player in the trading card market, for nearly $500 million in early 2022, instantly becoming one of the biggest names in U.S. trading cards. The lawsuit claims that this acquisition further consolidated Fanatics' monopoly in the market.
The trading card business is the highest-margin business at Fanatics and accounted for about 20% of the company's revenue in 2024. The lawsuit seeks an injunction to stop the defendants from engaging in allegedly anticompetitive practices and damages exceeding $5 million.
The U.S. district court also sided with Panini in a case against WWE's attempts to terminate its deal early and move to Fanatics. The cases between Fanatics and Panini remain on the Southern District of New York's docket, with a judge ruling earlier this year that they will continue as separate matters.
The defendants may argue that consumers are better off with exclusive licensing contracts and that Fanatics was awarded exclusive deals due to merit and product quality. However, the ongoing lawsuits aim to challenge Fanatics' overall impact on the market and the alleged anticompetitive practices that have led to artificially inflated prices for sports trading cards.
The ongoing lawsuit, filed by Phillip Jones, aims to challenge Fanatics' overall impact on the sports trading card market through an analysis of allegedly anticompetitive practices. The plaintiff requests a finance-related compensation exceeding $5 million and seeks to stop the defendants from continuing these practices.
