Fanatics countersues Panini America after antitrust lawsuit in latest drama within trading card industry

Fanatics filed a countersuit against Panini America in the Southern District of New York on Monday after the latter accused the sports retail and collectibles giant of having a monopoly in the trading card industry.

Panini America alleged last week in a lawsuit filed in Florida that Fanatics participated in "anticompetitive" behavior and signed long-term licensing deals with the NFL, MLB and NBA, as well as each of the major sports leagues’ players' unions. Fanatics acquired Topps Company in 2022.

Panini has an exclusive license with the NBA through September 2025 and the NFL through early 2026.

Panini accused Fanatics of "raiding" its employees and giving "false, derogatory statements" about the company.

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On Monday, Fanatics fired back. The company said in its lawsuit that Panini’s owners "embarked on a protracted, unlawful, and deceitful campaign of unfair trade practices, strong-arm tactics, and tortious misconduct to hamper Fanatics Collectibles’ nascent business, in the hopes that it could force Fanatics Collectibles to pay an extortionate amount for Panini to terminate its licenses early, even though early termination would inure to the benefit of collectors and licensing partners—and Panini—alike."

Fanatics accused Panini of trying to falsify earnings projections hoping to "bait" the company into "continuing sham talks of terminating Panini’s licenses, impeding Fanatics Collectibles’ business plans to work with players’ associations and individual athletes to grow the sports and entertainment collectible cards category."

Of those who left Panini without non-compete clauses, Fanatics said Panini filed lawsuits against them and "threatened" others who decided to follow.

The lawsuit mentioned a 2022 negotiating period when Fanatics and Panini agreed in principle to terminate some of Panini’s licenses early. Fanatics agreed to pay the early termination fee based on Panini’s revenue projections. 

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"Over the course of the next year, however, Panini dragged out the early termination negotiations in bad faith by slow-walking negotiations for several months and ultimately trying to pass off knowingly inflated earnings projections that translated to an unreasonably high early termination fee," the lawsuit said.

Fanatics accused Panini of using unfair tactics, which forced them to spend millions of dollars and lose out on several other opportunities. 

A source familiar with the matter told Fox Business that Panini threatened the company with the antitrust lawsuit for months in order to force them to make a bad deal. The source said the lawsuit came after Fanatics would not do the deal.

"Panini’s strategy is an admission of its ineptitude: rather than elevating the collector experience, granting licensors access to downstream opportunities, or improving the broader industry, Panini is trying to undermine its competitor through unfair tactics so that it may continue to treat its American subsidiary as an ATM serving its private owners in Italy. But Fanatics Collectibles will not be bullied," the lawsuit said. 

"Fanatics Collectibles has nothing to fear from the baseless litigation that Panini has brought, as Fanatics Collectibles has done nothing other than outcompete Panini by convincing athletes, players’ associations, and leagues that Fanatics Collectibles will maximize the value of their intellectual property in the future. That is called competition—and it is what the antitrust laws promote."

Fanatics also cited tweets from Panini consumers who have been upset with the product.

Panini America did not immediately respond to Fox Business’ request for comment.

Their lawyers released a statement to the Action Network.

"Fanatics 101 page press release masquerading as a lawsuit is a disparate (sic) attempt to avoid dealing with its serious antitrust liability as set out in litigation filed against it last week," Panini America said through its lawyers to the Action Network.

"Fanatics attempt to some how portray it as a victim is absurd on the facts and irrelevant as a matter of law.

"Fanatics attacks on Panini are flatly inconsistent with undisputed facts, including Panini’s undisputed record of innovation, customer service, and financial success. If Panini had been as unsuccessful as Fanatics pretends, Fanatics would not have had to use decades long exclusive dealing arrangements to lock it out of the market, or improperly cut off Panini’s supply, interfere with Panini’s production facilities, and raid its employees."

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Fanatics said it is "seeking damages and "other appropriate relief in this forum, pursuant to a governing forum-selection clause, in order to remedy Panini’s unfair competition, tortious interference with business relations, and breach of the duty to negotiate in good faith."