The Geoff Wilson Show: What Topps & Fanatics REALLY Think About the Card Market

We have a special episode of the show today. We have Mike Mahan, the CEO of Fanatics Collectibles and David Leinert, the president of TOPS. And they're coming here to the set of the Jeff Wilson show on the show floor of the National to sit down to talk about the state of the hobby right now, how it's growing, what it means for the market, what it means for TOPS, how they're innovating their products, how they're controlling print runs and prices, and what the outlook is like. It's going to be a great conversation. So let's get started. The Jeff Wilson show is brought to you by Arena Club, the official home of Slab Packs. Now available every day, Slab Packs offer an exciting way to collect rated cards with confidence. Plus, every pack comes with an instant offer to buy your slab. Don't miss out. Explore the latest Slab Packs and more by downloading the Arena Club app. Just search Arena Club in the app store and use promo code SCI for 20% off your first purchase. Mike, David, thanks for taking a couple of minutes to sit down. We're here on the show floor of the National. Lots of energy here. We were just at Fanatics Fest together a couple of weeks ago. Lots of energy there. Is this, you think, like the craziest few week period in the history of the hobby? I feel like this might be. Yeah, I was going to say it's pretty wild. I mean, at Fanatics Fest, we added that fourth day to Fanatics Fest. The show broke attendance records. The floor was just abuzz. Fans, collectors had a phenomenal experience. We went from that. We had a little break in our travel, came over here. A little small break. A little small break. We had that one week in between, so I don't know. We somehow have to fill that off. But yeah, we came here from Tuesday night into Wednesday when the show opened. Five days here. But it's been super busy. Tons of energy. Lots of fans. Lots of collectors here. Yeah, we're excited. And I think this speaks to the overall health of the hobby right now. This has been, I believe, the hottest year in the history of the hobby. And that even goes back to a lot of people thought that 2020 would never be topped with a pandemic just fueling everything. But this year, in my opinion, has topped it. You've got incredible all-time high record sales happening all the time. You're seeing unbelievable volume of new collectors come in, record-breaking attendance, all kinds of stuff. So from your perspective as Fanatics and Tops, how do you see it? How healthy do you see the hobby right now? And more importantly, can this growth actually continue? Well, we are not prognosticators. And so it's hard to say what the market's going to do next year or even next month or next week. But what I think we can very clearly say is that the strategy of focusing on the collector experience is working. And for us, that starts with product and product innovation and great storytelling and the depth and the richness of that storytelling and that connection that a product offers to an athlete or to a moment or to a team. And when you talk about record prices, that's what you're seeing. You're saying, oh my gosh, this is a dual gold logo, man, of one of the greatest, if not the greatest, baseball player ever with a double autograph, one in kanji, one in English. I mean, it's just those type of things are special. And when you think about how does that come to be, well, it comes to be because we have a great relationship with Shohei. We have a great relationship with Major League Baseball. We have a great relationship with the players associations. We, in partnership with Major League Baseball and also the NBA and the NFL, we got the gold logo, the gold logo man on the back of the jerseys for MVPs and rookies of the year and Cy Young Award winners. And so you put all of that together and a couple of years later, you have one of the most iconic cards of all time come to be. But that starts with a focus on the collector, a focus on product. And then from there, it's about great marketing and bringing athletes and celebrities in and the right partnership with breakers and shops and retailers and bringing technology in and improving operations and customer service and minimizing redemptions. And all of those things come together and you have a healthy ecosystem that we believe is built to last. And so, sure, will the market go up sometimes? Will the market go down sometimes? But we fundamentally believe collecting is an extension of fandom, whether it's sports or entertainment. We need to make that experience great. The better we do that, the better this industry is going to be. And I think the early returns on that are terrific. Yeah. Yeah. I'm curious, what is that innovation process like? Because you just mentioned the gold logo man, and obviously we'll talk more about that Shohei Otani and that incredible hype around that card and then the big sale. But I'm curious, you guys obviously had to come up with the idea of doing that a year before it actually made its way into a trading card. So when you first came up with the concept of the debut patch for baseball, which we're now seeing across all the sports, or when you first came up with the concept of the gold logo man, how does that innovation process work? Well, we have a phenomenal team. And I think that team, and we're all part of that team, it's just about being obsessed with great products and great storytelling. And so for the debut patch, it was, how do we take this rookie card concept that's been around forever, and how do we make that even better? How do we make the most iconic rookie card possible? And once you frame the question properly, the answer becomes fairly obvious. Well, if you can have a patch from that first time that you walked on the field or the court, and you can take that patch and put it into a card and they sign it, that becomes the ultimate one-of-one rookie card. And imagine, we always talk about this, imagine if we had that for Michael Jordan or Jackie Robinson or Shohei Otani or Tom Brady, you know, imagine what those cards would mean and what they would be worth. And you'll have the equivalent of that someday. Because maybe it's Cooper Flag, you know, maybe it's, we don't know who it's going to be, but there will be another one of those guys and you've got the patch on them now. We think every athlete in those sports from here on out will have those debut patches and there will be more special athletes to come along. And those generational athletes will have generational cards. And that's, I think you've seen a lot of that with Shohei. And then trading cards had never really had a lot to say about achievement, right? So when Shohei had a big year, all, not all, but most of that value and attention would accrue to his rookie card. And we said, you know, how do we as trading cards really celebrate the greatest players in their greatest moments? And when you ask the right questions, the right answers come about. And so, you know, the team came up with the idea, hey, let's do this Gold Logo Man or Gold Shield. And then from there, it's like, okay, how do we then bring that to life? And you have these one-of-one cards. I mean, remember last year, it was crazy. The Shohei Otani one-of-one Gold Logo Man went for $3 million and that was a record. It was, oh my gosh. And then we said, okay, well, now that he's back to back, we have to do something special, right? We didn't plan that from the beginning, but it's this relentless obsession with great products and great storytelling and the relationships to make that happen. And now all of a sudden it's an $11 million card and maybe the $3 million card's worth more now, I don't know. But the point is we're always obsessed with making great products and we have a team that's just so innovative, so driven culturally to just make the best products possible. Yeah, I would add too. I mean, we're always looking at the market and how collectors and fans are reacting, right? We listen, we track the data. As Mike said, we obsess over this. So we want to continue to innovate, continue to push. I mean, we talked about two of the big headline programs that we have, the debut patch, the Gold Logo Man, but there's a lot of inserts and a lot of things that were changing and evolving. Those big cards draw big headlines. But I think overall, when you look at our products, the team's done a phenomenal job listening to the fans, listening to the collectors, and we want to get better and better each time we put out those products. We may have our misses here and there, but we're going to take those learnings and apply them forward. But obsessed is the right word. We're all collectors internally too. So we bat around a lot of ideas and bring hopefully some of the best ones to life. And I'm curious, David, one of the areas where I feel like you guys have put a lot of attention over the last couple of years is trying to innovate around your case hits or your super short print inserts. Obviously, collectors love those, and we've seen the popularity of those grow over the last decade. Topps takes over the license for NBA, Topps takes over the license for NFL, and now you've got a collector base who's really case hit centric, wanting it. So you guys invent the Ultra Violets and you invent the All Kings, which we talked about. You've invented Kanji. You invent a lot of these different ones. Do you have the greatest All Kings collection in the world, by the way? I got a lot of them. I haven't necessarily compared mine to some of the others, but maybe I have a lot of them. I've been selling a lot of them. That's the problem. A collection requires you to keep them. I don't know why you're selling them. I've been putting them out of card shows. They're very, very popular. Even last night at trade night here at the national, I think I traded four or five of them away. I had ones that I didn't have on my case and people were coming up and they're like, hey, don't you have this? I saw it on one of your videos from Fanatics. I'm like, yeah, I got it. Yeah. Bring it out. Trade it. Trade it. But a lot of these, the Kaijus, I meant to say, a lot of these inserts, what is the design process around that like? How do you say, we got to have really good inserts. How do we make great inserts? How does your team approach that? Yeah. Well, I think taking a step back for a long time, the industry was pretty dependent on autographs and relics, right? Those were kind of the hits. Everyone was chasing those. As the business continues to grow in scale, we're always very mindful of our print runs, how we approach the business. We're well aware of the late eighties and early nineties. We all lived through that era and we saw that boom and bust. So as we want to continue to propel the growth and delight our collectors, we have to think of new ways to do that, right? And case hits have been one of those. Those mega hits, those super short prints, all the different vernacular we use around those. But really what we do is, I mean, internally, we think about concepts, where we could launch them, what could resonate with collectors. We want to do things that might be bespoke to an NBA or an NFL. If they work, we might apply them somewhere else. But if you think about the levers that we have at our disposal, we're limited by a two and a half, three and a half canvas. We have to get really creative with the designs. We have to do things that we feel will really resonate with the collectors, listen to the collectors, but it's a very extensive process. And as Mike again mentioned, we obsess over this stuff. Our product meetings are both of our favorite meeting of the week. Our teams love it. We're intense in there and we're relentless. We'll redo designs over and over again. The two of us may or may not be responsible for some of the product delays. We'll put that, you know, but we want to delight fans. We want to make cards that are going to resonate with collectors. And you've seen, we've evolved some of these case hits and these inserts, the helixes or the ultraviolets, where we might not have out of the gate got every element right. We just did a big adjustment to hidden gems that I think is fantastic and that'll work really well. And we're seeing early results that are promising and collectors getting behind those. So we love those case hits. Every time you come out with a great case hit, you know, you can, it's another time to put out a Shohei or Otani. You have another Biden Cooper flag versus just another parallel and another autograph or going deep. You get a chance to reset that subject list, build another really strong chase element with some of those top players that we know the fans are chasing. It's interesting as well, seeing how the market reacts to it, because even if you have cases at similar levels of rarity, you'll see sometimes certain ones will just take off in the secondary market. Others won't catch on as much. Hidden gems is actually an interesting one for you to mention because that's one that if you look at just the rarity, it's the rarest or amongst the rarest there is of any of the case hits. Yet it lags behind in popularity and a price on the secondary market. It lags behind some of the others. And so I've kind of been curious, like what is the issue here? Have collectors just not caught on? Is it almost too rare or is it a design issue with the card itself? So it sounds like you got a little something cooking there. I think the creative process is driven by storytelling first and foremost. And what is the story that the insert is telling and why does it matter? David talked about how intense those meetings are. We tend to be very vocal about what it means and why it matters and why it would resonate with collectors or not. But we think the rigor of that process actually makes it better and stronger. And if we see hidden gems as good and not great, then we want to redo it. And look, I like hidden gems, but it's almost a competition among inserts. Oh my gosh, we've come out with alter egos and we've come out with all these kaiju and you mentioned a bunch of them and we've redesigned Helix and now all these are up here and now, well, where's hidden gems? And you just keep focusing on excellence. And we really do obsess over details, whether it's design, whether it's rarity structure, whether it's the number of parallels. I mean, all of that is part of the story of the insert and it matters deeply. And I think the fact that we've paid a lot more attention to that has really created a lot of the enthusiasm that you see out on the floor because there's just more things for people to engage with. And we don't make every card for every person. What we want to make sure is that every person has something that they want to collect. And that's ultimately our goal and that we want that connection to be authentic and meaningful and have the depth of storytelling that'll stand the test of time. And it's a relatively simple philosophy that is actually incredibly hard to execute, but because I think we have the right team, the right level of obsession to the craft, I think the results are getting better and better and better. A couple more questions. I know you guys have to go. You've got a packed day here on the show floor. I'm curious how you balance the fact that we have all these collectors. We see it here at the National, all these new collectors flying in. We saw Fanatics Fest a couple of weeks ago. That means more demand for the products. It's hard to create a lot of supply and to keep the products unique and not watering down so much. But you're trying to bump supply up and then you got price as this big variable that goes along with demand and supply. It's all tied into that. How do you play with those variables? How do you play with supply and price and these different elements to ensure that collectors can have a good experience wherever they enter? Yeah, I'll start. I mean, I think one, when you look at our portfolio, we have, I think, a pretty balanced portfolio from the entry level all the way to the high end. And there's different ways you can play within those different products. So we're very conscious to ensure that especially new collectors and new people to the industry have something that's accessible, have a way that they can participate. So even within some of our bigger products, when you look at an NBA Chrome that came out, the first NBA Chrome in 16 years, we do entry level SKUs, we do the hanger boxes, we do the value boxes, we do the mega boxes. We're trying to find ways to keep those entry level SKUs at a reasonable price. The hobby product is going to fluctuate, right? I mean, a lot of that's driven by the industry, by what the fans and collectors, they're speaking about and driving that. But I think when you look across our portfolio, there's a lot of entry level, a lot of good entry points into collecting. And that's always going to be fundamental. The high end stuff, it's for a different collector. A lot of that stuff is going to be very scarce, very short, going to draw some big headlines. But that's a lot is due to checklist strain. There's only 30 teams in Major League Baseball, there's only 26 players on a roster. You got to be careful about how you build that stuff. And I mentioned earlier, we're very, very conscious about the junk wax era. So we're doing things methodically, we're doing things with a long term focus. But we're very, very aware of all the different dynamics and trying to play within those guard rails. I think you said it well. I mean, it comes down to this intractable tension between make too much product. Oh, you've killed the hobby. It's junk wax era 2.0. Make too little product. Oh, you've killed the hobby. Product costs too much. There's no way we can afford it. And everybody has a different opinion. You have 10 people in a room, they'll have 15 different opinions. But product segmentation is ultimately the solution there. And there's product that's meant to be accessible and affordable and long run product. And we're very focused around that. And then there's product like Dynasty that has natural constraints around how much jerseys you're going to get and how many autographs you're going to get. And those prices will be completely driven by the market. And look, the market will drive most of the pricing, but we always want to make sure the product is compelling. And then within that, we want to make sure that there's plenty of accessible options for people to participate. All right, final question. What are you guys looking forward to most about the remainder of the year here? I mean, remainder of the year for me, NBA Chrome updates. NBA Chrome update. Debut patches coming out. I mean, that's a good answer. That's, I mean, that is the answer. That's a good answer. What do you think, David? I mean, I've said this earlier. We're maybe halfway through our NBA portfolio, right? We've barely scratched the surface of our NFL portfolio. It's early days and we have so many great products for the balance of the year for both of those licenses. So Chrome updates is only like a week away. I can't believe it's already here. And then a lot more behind it. A lot more to come. Stay tuned, everybody. That's awesome. Hey guys, thanks for taking a few minutes. That was a great conversation with Mike and David. I hope you enjoyed it. And don't forget the full length episode of these Jeff Wilson shows is available on YouTube, on the Jeff Wilson show channel, as well as on Spotify and on Apple podcasts. So make sure you're subscribed everywhere. Thanks for watching.