When fans go to purchase their favorite NFL rookie’s trading card in 2016, there will only be one brand available to them. NFL Players Inc. (NFLPI) and Panini America officially announced an exclusive partnership starting in 2016, meaning Panini America will be the only company providing NFL trading cards. Contract details remain undisclosed, but it is described as a long-term deal and is a huge win for Panini America.
It could also be a huge windfall for the NFL, which has benefited from exclusive relationships in the past (Nike apparel and Madden are prime examples). Keith Gordon, president of the NFLPI, discussed why an exclusive deal made sense:
“In the last few years, we have had discussions about extensions and kicked around the idea for an exclusive deal. We became more receptive to the idea based on the conditions of the market. We also looked at other leagues and associations. This wasn’t a quick decision. We have to plan in advance to not disrupt the current deals, make sure the exclusive partner can take over the reins, and make sure the other partner can land the plane, so to speak.”
The exclusive deal allows the NFLPI and Panini America to focus on the young collectors’ demographic. All parties involved agree that the older collectors’ market is dwindling. The old business model is not sustainable, and an exclusive deal allows both parties to evolve with the market. “Exclusivity helps us enormously,” said Mark Warsop, CEO of Panini America, “because a lot of the activation that promotes the category as a platform requires a lot of investment. We want to build the category itself and provide a new marketplace for the new demographic.” The changing market could include less expensive packs, an increased digital marketplace, and one of a kind high-end collector packages that might not have been available if Panini America was only focusing on beating its competitors in revenue generation.
Revenue is still the foremost consideration, but it also provides ancillary benefits. Strong brand associations also help NFLPI constituents. “Sale of product is commensurate with other returns such as branding and growth. This arrangement helps because both groups are in line with the goals of quality, innovation, variety, etc.” Gordon said.
That branding strategy is a constant theme when speaking with the NFLPI, and it constantly factors in the players’ perspectives. As Ahmad Nassar, NFLPI executive vice president of business affairs & general counsel, explained, “at the end of the day, we are judged by how we treat the players.” They worked closely with Eric Winston (president of the NFLPA), Domonique Foxworth (former president), and with a committee to finalize this deal. The NFLPI representatives realize they have to weigh the benefits of a business decision along with what players are thinking. “We have a core group that we always keep in the loop on these decisions. It is a delicate balance, but we have to think of our shareholders first.”
This seems like a mutually beneficial deal that could pay dividends for all parties involved. Exclusivity and the length of the deal provide Panini with enough runway to develop strategies that would pay off three to four years down the road. While the NFLPI partners with a strong company with a history of international success, it also helps its members. Normally, rookies drive the trading card market, and in a deal with multiple partners, that would continue to be the case.
In this new deal, rookies will still provide a large portion of revenue, but with new and innovative products, veteran collectibles could see an uptick in sales as well. This deal could signify a change from the traditional world of trading cards to a digital era, focused on rewards points, digital cards, social interaction and one-of-a kind collectibles. The NFLPI and Panini America are moving into a new era of trading cards together, and thinking of new ways to get young fans excited about their first pack of NFL/Panini America collectibles.
Michael Colangelo is Assistant Director at the USC Sports Business Institute and Senior Editor of The Fields of Green.