Hobby social media is buzzing with rumors and speculation about the future of Leaf Trading Cards. Brian Grey started the rumor mill with a series of cryptic tweets by Leaf founder and hobby personality. Finally, new evidence confirms that the rumors are true. We will examine what this deal means and ask what made Fanatics acquire Leaf Trading Cards.
Fanatics Acquires Leaf Trading Cards: What we know so Fanafar
It appears there is no room for independent card companies in the current corporate landscape of the hobby. According to the latest reports, sports memorabilia and card behemoth Fanatics has acquired Leaf Trading Cards this week for an unknown sum.
Several trusted sports card sources, such as Sports Card Radio, have confirmed the news. However, neither side of the transaction has released a statement as of yet.
We don’t have all the details we would like to yet. But we know that Fanatics will keep Brian Grey on the books after the sale. We reached out to Brian for comment, and he has not gotten back to us yet. But his Tweets have all but confirmed the report.
On April 21, Grey Tweeted, “Thanks for the prayers, guys! Had an amazing meeting. Something I never saw myself doing may just be a reality. It’s fun being wanted.” That already had the entire hobby guessing that the sale to Fanatics was going down. He responded to the speculation by posting, “Sorry for being cryptic, but it is legally necessary.”
The Sports Card News Twitter account tweeted to Brian, “take the money if Rubin is offering it. Otherwise, you’ll end up like Panini.” To which the Leaf Trading Cards owner replied, “You know me. I will always be a factor no matter what, but you also know I am a guy of reasonable intelligence.”
What are Leaf Trading Cards?
Leaf has made its name by providing high-quality non-licensed sports cards at lower price points. It seems like they have been part of the hobby forever, but the modern incarnation of the company has only been around since 2010.
Brian Grey, the former manager of Razor Entertainment Group, took over the rights that year after doing his utmost to become a player in the sports card world for a while.
Razor Entertainment Group made waves in 2008 by signing Tim Beckham, America’s #1 baseball prospect, to an exclusive contract. But, of course, that turned out about as well as Beckham’s career did.
Leaf Trading Cards never had licenses to any of the significant US-based sports. They do produce licensed cards for poker and some martial arts sports, but strictly what the more prominent companies are not interested in picking up.
So instead, they focused on creating high-quality and auto-filled products. For example, they produced a popular series of cards commemorating Muhammad Ali’s career and a hilarious set based on the popular Family Guy cartoon.
That approach did not allow them to compete with Panini and Topps, but it was enough to carve out a valuable niche in the hobby.
Why did Brian Grey sell Leaf Trading Cards to Fanatics?
This is the easy part of the equation. Fanatics must have made it incredibly worthwhile for Grey to sell his baby. His Tweets barely conceal the excitement that comes with one of those offers that in movies are written down on a piece of paper and accompanied by sly looks.
In addition, it appears that they offered Brian a role in Fanatics that he is happy with. After all, he Tweeted, “It’s fun being wanted,” which undoubtedly means they offered him a job he is satisfied with.
Thanks for the prayers guys! Had an amazing meeting. Something I never saw myself doing may just be a reality. It’s fun being wanted. https://t.co/W7DDV4tFcv
— Brian Gray (@leafceo) April 21, 2023
Finally, it allows Grey to do something he has probably always dreamed of. To produce licensed versions of the Leaf Trading Cards Products. If they are under the Fanatics umbrella, Leaf will have access to any license they want starting in 2025. So, while Grey may lose his independence, his cards may gain substantial popularity.
But there is an implied stick alongside the carrot that Fanatics is offering Grey. Brian is undoubtedly aware of CEO Michael Rubin’s aggressive steps toward rivals in the past and what they are doing to Panini right now.
In particular, their aggressive pursuit of Panini employees with specialized expertise. In addition, considering the massive amounts of money behind Fanatics, there was probably another concern.
Rubin could quickly sign many draft picks to exclusive contracts, making the continued release of their popular auto prospect products impossible to produce in the long term.
Why Grey may have been easy to convince
But it may not have been that difficult to get Grey to agree. Here is why. When Fanatics acquired the rights to all the prominent sports in the United States in 2021, it was a significant shock for Leaf owner Brian Grey.
“It was a jaw drop,” Gray said of reports that surfaced late last week indicating Fanatics was in the process of locking up league and union licenses in at least three major sports. In addition, Topps has already admitted that its deal with MLB and its players would end. “I was shocked,” Gray said. “Nobody knew this was coming.”
But he did not view the development as a disaster. “I’m willing to give them the benefit of the doubt and say, ‘let’s don’t lynch these guys yet’ or have unreasonable expectations. They might be able to pull this off.”
And he then predicted what the next step would be, quite accurately: “There’s like 50 roads this could go down. The best road is Fanatics buys all the companies. They’re going to get a little bit better deal than they would have otherwise because of the circumstances, and on day one, they hit the ground running.
Fans are happy because all the brands they love are back. I don’t think it’s going to happen, but that’s the best-case situation.”’ So, Grey has shown support for this kind of development in the past.
Why did Fanatics acquire Leaf Trading Cards?
That is the million-dollar question; no one has a clear answer. However, Leaf certainly has carved a niche in the hobby and has some fans. If we examine their business structure and practices, we can note a few elements that may be of interest to Fanatics.
Leaf has a few brands that are reasonably popular in the hobby. Fanatics and Topps may want to add them to their roster. One example is the Pro Set line. That was a Dallas-based company from the late 1980s owned by entrepreneur Lud Denny. They released a few well-known soccer and football sets back in the day.
Unfortunately, they went bankrupt in 1994 for unpaid debts to the NFL Players Association. Leaf bought the rights and, in 2021, started producing cards with familiar and beloved designs.
Leaf Metal Baseball is also a great set with trademark flashy Leaf designs and many autos. They come with 6 autos per box; some fans swear by the product.
The Leaf Trading Cards Advantages
They own some rights for high school events that Fanatics may want, as it pursues a monopoly on sporting events from the lowest to the highest levels. For example, the smaller company owns the rights to high school all-star games like the All-American Bowl.
Leaf also has some of the best quality control in the business, with well-centered cards and surprisingly good designs. Anyone who has ever graded Leaf Trading Cards will tell you they tend to get better grades than their more prominent name and fully licensed rivals. After all, they have no choice but to do better than their rivals in every other metric since they do not have licenses for any major sports.
Then there is the production infrastructure. Topps can produce a lot of cards, but not enough to pick up the slack for the Panini basketball and football cards. If Fanatics manage to (or want to) purchase Panini, this may not be a problem, but they haven’t.
Therefore, picking up some of Leaf’s infrastructure could help them obtain the needed production metrics. Although, it would certainly not be enough on its own.
Then there is the customer service issue. Fanatics has always tried to provide a high level of customer service to its customers. And some in the hobby are aware of this because they provide Fanatics exclusive boxes and other sports cards through their representatives.
But Topps is not known for its excellent customer relations, to say the least. But Leaf, probably because they have less volume and do not have other significant advantages, have focused a lot of money and energy on this element of their business. They may be interested in getting Leaf’s expertise and staff in this area.
Leaf Designs
Finally, Leaf has wonderful designs and inserts. Indeed, they seem to do far better than Topps on both, especially the latter.
Fanatics will have large shoes to match the wonderful inserts that Panini has created over the years. Think, for example, of Kaboom!, Downtown, Stained Glass, or Net Marvels. Undoubtedly, Topps has not made a single insert that can hold a candle to them. Indeed, they have sometimes resorted to copying the designs.
Look at the Homefield Advantage series, for example. Therefore, Fanatics may figure that bringing in some talent from the outside and some good Leaf designs can help with that problem.
In the past, Grey has already speculated about this problem. He said the best way to get top designs for cards was to bring together a brain trust of talent from all the card companies.
“Could you imagine taking the best brands from all four companies? Your line-up would be phenomenal. And if you took the best people from each company, what a team you could build. You could build a great all-star team, but you’re going to have to buy everyone you need.” That may be precisely what Fanatics has in mind.
The domination motivation for Fanatics acquiring Leaf Trading Cards
So, as we have seen, Leaf can bring some great things to the table. Nonetheless, it’s hard to argue they have anything Fanatics desperately need. Perhaps the most cogent and likely reason for this move is the seeming urge of the big sports apparel company to crush all opposition.
If we look at the broader context, their desire to remain the only player standing is clear. Not only did they buy Topps and now Leaf, but they are also ruthlessly poaching executives from Panini.
Many have speculated that their predatory strategy towards Panini America is the precursor for an attempt to acquire the most popular card company in the country on the cheap.
But the best evidence that this is what Fanatics is doing comes from their sports memorabilia business strategy. The ambitious company has not been willing to rest on its impressive laurels as the largest seller of jerseys, caps, and the like.
Instead, fanatics have gone out of their way to crush the opposition entirely. For example, a recent lawsuit against them from a rival sports merchandise company claimed, “The deals allowing MLB and Fanatics to reach downwards to attempt to restrict the conduct of retailers that horizontally compete with them leave Fanatics in complete control of the commerce involving MLB licensed apparel not only on Amazon but everywhere.”
Allowing Fanatics to control prices
Therefore, it Is not hard to imagine that Fanatics wants to reach a point where you cannot buy cards anywhere that is not owned by the company. The lawsuit accuses the company of achieving “the exclusive right to determine who its competitors are.” And as one astute observer on the Blowout Forums noted:
“Fanatics are taking control of the hobby, from brands to pricing to distribution. You don’t let a Leaf/Pro Set hang around and lower your price points. If you want to push $10.00 packs, you make sure no one else is out there moving $2.00 packs.
It’s supply-side economics. You have to control all sides even if Panini America were to go on and do what Leaf was doing. Making unlicensed goods. Would/Could they do it at that same low price point? If the answer is yes, they get bought next. And for much less money than they were worth the last time Fanatics tried.”
That rings true to me. And it underlines why Fanatics is aggressively pursuing Panini and undercutting them at every corner. They do not want anyone producing unlicensed cards with wide circulation.
And considering how ruthless they are being, you have to wonder when Fanatics will turn their sights to Upper Deck, which has somehow avoided being part of this as of now. At least as far as we know.
The final word on Fanatics acquisition of Leaf
For most sports card watchers, this is not a very big story. But it does have significant implications and is worth watching. So let’s start with the positive side of the story. The acquisition of Leaf Trading Cards by Fanatics shows the continued commitment of the latter to bring in the best minds and products from across the hobby under their umbrella.
Leaf has some great people, and they will help bring better designs, customer service, and quality control to Fanatics. After all, Leaf Trading Cards has often outperformed Topps in all those metrics. And if you are a fan of Leaf releases, you may finally get a chance to buy licensed versions of their cards.
The negative side is the general problem with the imperialistic project of the Fanatics’ takeover of the hobby. The bigger they are, and the fewer rivals they have, the less accountability this behemoth is under.
We are concerned that when all opposition is dead and gone, Fanatics will jack up prices and cut corners on quality control, customer service, design, and everything else.
After all, monopolies are not known for the high quality of their services. That is why we have anti-trust laws on the books in the United States. Not that they are ever enforced.
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