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Fanatics, Do Not Pass Go, Do Not Collect $200

On August 3, 2023, Panini America filed a lawsuit leveling allegations of monopolistic practices and anticompetitive conduct against their archnemesis, Fanatics.[1] Specifically, the suit charges Fanatics with separate counts of Attempted Monopolization, Monopolization, and Unreasonable Restraint of Trade under the Sherman Act; two additional counts under the Clayton Act for lessening competition within a market; several counts of Tortious Interference; and, finally, allegations of Business Defamation and Disparagement.[2] Many in and around the collectibles space have labeled this filing inevitable. Neither party has drawn a Go to Jail card just yet, but the 55-page complaint describes the collective actions of Fanatics over the past 18-24 months as damning.


In a previous article on the Conduct Detrimental newsletter, I characterize Fanatics as a coming sports card monopoly and provide a summary of the actions outlined in the recent pleading, minus details about the pillaging of Panini employees and disparaging remarks made by Fanatics to third parties. Here, we will analyze the strength of Panini’s argument regarding the length and exclusivity of Fanatics’ imminent rights deals and how the deals will harm competition “for” the market.


By 2026, Fanatics will have secured exclusive rights deals with each of the three major American sports leagues—the National Football League (NFL), National Basketball Association (NBA), and Major League Baseball (MLB)—and their respective player associations. In the lawsuit at issue, Panini continually points to the fact that these exclusive deals will span a decade or more, chilling the competitive market for the licensing and production of sports trading cards in the U.S. market. Panini states that this competition “for” the market is the “competition to replace the prior holder of the exclusive contract” and that Fanatics’ twenty-year stranglehold on the exclusive rights are anticompetitive by nature.[3] The length and exclusivity of the deals are important to highlight for Panini because Panini has held the exclusive rights to produce licensed NFL and NBA trading cards for over a decade and they must distinguish their trade practice from the monopoly that Fanatics is currently creating.


It is well established within the 11th Circuit that exclusive dealings in and of themselves are not per se illegal, but only when proof of “actual competitive injury” is present does liability attach to anticompetitive conduct.[4] An injury in fact is required for proving violations of both the Sherman Act and Clayton Act. Panini is likely familiar with this requirement based the routine nature of exclusive deals within the sports trading card hobby. Of note, Panini continues to use exclusive rights deals to their advantage and avoids any antitrust violations by not owning a significant enough sector of the market to cause anticompetitive injury to companies like Fanatics (Topps), Upper Deck, and/or Leaf Trading Cards.


Proving actual competitive injury in the present case should not be difficult for Panini’s legal team. In ZF Meritor, LLC v. Eaton Corp., the 3rd Circuit emphasized that the suspect nature of an exclusive contract’s duration was a function of both the number of such contracts and market share covered.[5] The court went on to admonish the agreements in ZF Meritor which locked up over 85% of the relevant market for at least five years.[6] NFL, NBA, and MLB trading card sales make up greater than 90% of the several-hundred-million dollar U.S. market. Once Fanatics owns exclusive rights to each of the three largest gets in the business, the “monopolistic outcome is not just probable absent an antitrust remedy; it is locked down and assured by contract.”[7]


In closing, the Panini complaint asks that the court order an injunction against Fanatics, preventing the company from engaging in any further anticompetitive conduct or enforcing any previously entered into exclusivity agreements that deterred competition in the Hobby. They go on to request an order requiring Fanatics to divest itself of the assets associated with Topps and any control over GC Packing (GCP)—the critical, high-tech, custom trading card manufacturer for Panini—to “restore competition.” Any litigation is likely in the distant future, but Panini now has a three-year window to prove their case against Fanatics in a final effort to remain relevant in the sports card hobby.


[1] Sports Card Platform Panini Sues Rival Fanatics Over Antitrust Law. Reuters (accessed August 3, 2023), https://www.reuters.com/legal/litigation/sports-card-platform-panini-sues-rival-fanatics-over-antitrust-claims-2023-08-03/ [2] Panini America, Inc. v. Fanatics, Inc et al., 55, 30-51. Case 8:23-cv-01721. Filed August 3, 2023. [3] Id. at 20. [4] Construction Aggregate Transport, Inc. v. Florida Rock Industries, Inc., 710 F.2d 752, 773 (11th Cir. 1983). [5] ZF Meritor, LLC v. Eaton Corp., 696 F.3d 254, 287 (3rd Cir. 2012). [6] Id. [7] Panini America, Inc. v. Fanatics, Inc et al., 55, 37. Case 8:23-cv-01721. Filed August 3, 2023.

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