Julio Rodríguez of the Seattle Mariners was the American League Rookie of the Year in 2022. MLB trading card partner Fanatics has plans for new rookie card features this season as part of a bigger plan to increase the value of Topps baseball cards for collectors.
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Fanatics made waves in the sports and collectibles industries when it pried the rights to make trading cards for Major League Baseball from incumbent Topps in August 2021, ending a partnership that dated back to 1952. The sports platform company made another huge splash last January when it acquired Topps outright for roughly $500 million.
Now, after releasing its first major Topps set alongside the start of the 2023 MLB season, Fanatics is starting to show how it plans to elevate the trading cards and collectibles space.
“Fanatics is focused on the best experience for the fan, and collectibles is focused on the best collector experience,” said Fanatics Collectibles CEO Mike Mahan. “That means having the most innovative, thoughtful, authentic products possible.”
Mahan, who joined Fanatics in June to lead the company’s trading cards and digital collectibles business after serving as CEO of Dick Clark Productions, said the “the collector experience in 2023 will be the best collector experience ever, and 2024 will be even better.”
That belief is driven from Fanatics Collectibles’ main focus areas so far, Mahan said: educating new collectors and better onboarding them into the hobby, building out the marketing around collectibles, enhancing the existing collector ecosystem and experience, and innovation.
Rookies play a big role in increasing baseball card value
Innovation drove one of the new initiatives Fanatics is adding this year around typically one of the biggest points of excitement, and value, for card collectors: the debut cards of highly touted rookies.
“One of the central questions that we’ve been trying to answer is how do we get cards to really capture the big moments,” Mahan said. “Baseball cards have been about the rookies for so long, so if rookie cards are the biggest things in sports, how do we make the best possible card? How do we bring people closer to that moment?”
That led to the creation of MLB Debut Patches, which Fanatics is touting as the first-ever memorabilia made in partnership with a pro sports league specifically for the inclusion on trading cards. Working with MLB and the MLB Players Association, every player who makes their debut this season will have a patch on their jersey. After the game, the patch will be authenticated and placed directly onto their rookie card in a future Topps set.
MLB chief revenue officer Noah Garden said that is the sort of the thing that will continue the momentum among collectibles and trading cards.
“It’s that emotional connection that drives the hobby, and brings fans closer to the game,” said Garden, who described himself as an avid baseball card collector. “They want to feel like a part of the game, and what is a better way to do that than to have something that was actually a part of it?”
While the sports trading card industry had seen growth in recent years, the pandemic put the hobby into overdrive. Cards across sports have been selling for record prices, including a $12.6 million sale for a 1952 Topps Mickey Mantle rookie card, the highest price ever paid for a trading card.
U.S. Google searches for “best sports cards to buy right now” increased by 680% between January 2020 and February 2023, according to data provided to CNBC by online visibility management SaaS platform Semrush. During the same period, average U.S. monthly visits to Topps.com grew by 218.5% to nearly 1.2 million, Semrush data showed.
But even as other collectibles that boomed during the pandemic have fallen out of favor like NFTs and Funko Pops, trading cards have looked to maintain their momentum.
Jeff Owens, editor of Sports Collectors Digest, the largest trade publication covering sports trading cards, said that the resurgence of the hobby was “primarily due to a resurgence in buying and selling during the pandemic and a large group of wealthy investors looking for alternative assets.”
The softening of the economy led a decline in the market of modern cards last year, but values and demand are still “well above” what they were before the pandemic, Owens said, adding that the market for vintage cards like the Mantle rookie card is “very, very strong.”
Owens also pointed to the growth and support of card shows across the U.S. – nearly 1,000 planned for 2023, which is a significant increase compared to previous years.
Mahan said that from Fanatics’ perspective, “it’s a very strong time for the hobby right now.”
The global sports trading card market is valued at $44 billion and is expected to approach $100 billion in 2027, according to data from Verified Market Research.
“We think very firmly that the best days are in front of it; we can’t control the broader economy and like any consumer good there’s some correlation with broader spending but go to any card show or shop right now, this is a very vibrant and healthy marketplace,” Mahan said.
When Topps was considering going public in a SPAC deal that would have valued it at $1.3 billion in April 2021, the company reported that it had record sales of $567 million in 2020, a 23% year-over-year increase. That SPAC deal was later canceled after Fanatics acquired the MLB rights, which ultimately led to Fanatics’ acquisition of the company.
Mahan declined to comment on Topps sales today, but he said that “the business and the industry continues to be in a great, great place.”
What MLB gets from the Topps deal
For MLB, the return of trading cards has also served as a boon, which Garden said has parallels to video games or other ways that the league looks to bring in new fans and turn casual fans into diehards.
Garden noted fans like his son, who is an avid baseball fan but may not know every player on a West Coast team besides their stars. “When these players start to break through nationally, you already know who to look for” based on the rookie cards and other cards in the set, he said.
“The importance of cards in the evolution of fandom I’ve always thought was important,” said Garden, noting that’s how he got into baseball. “But the business hadn’t seen innovation in forever and in many ways, it had gotten harder to collect. … What Fanatics has done so far to innovate the product and support the ecosystem has been nothing short of fantastic.”
While MLB cards remain the crown jewel for Topps, Mahan said that Fanatics is excited for what the future holds not only for baseball cards, but also for the other rights the company holds, which includes the ability to produce NBA and NFL cards in the coming years.
“The good news is trading cards and sports cards have been vibrant for a long time, they’ve mattered for a long time, they’ve been meaningful for a long time,” Mahan said. “It’s a business that has traditionally been cyclical and had its ups and downs. … We’re focused on education, innovation, marketing, and community, and bringing all of those together – given where we sit today with all of these good things yet to come, we feel our best is firmly in front of us.”
Earlier this year, Fanatics hired former Snap global head of content and partnerships Nick Bell to head its new Fanatics Live business, which will focus on building a digital customer shopping experience where you can buy trading cards and other collectibles via curated and personality-driven content and entertainment.
Bell told CNBC that one of the first focuses of this new business division will be around “breaking,” a form of social trading card buying. Similar to a blind raffle, a set number of individuals purchase an entry from a seller — called a “spot” — and the seller then opens an entire case of trading cards live online and allocates each of them. Fanatics would receive a cut of each card sale.
Fanatics raised $700 million in December to bring its valuation to $31 billion, capital that it planned to use on potential merger and acquisition opportunities across its collectibles, betting and gaming businesses, according to CNBC.
The company estimates its revenue for Fanatics, including its Lids segment, will be approximately $8 billion in 2023.
Corporate treasuries have surpassed ETFs in bitcoin buying for a third consecutive quarter as more companies try to benefit from the MicroStrategy playbook in a more crypto-friendly regulatory environment.
Public companies acquired about 131,000 coins in the second quarter, growing their bitcoin balance 18%, according to data provider Bitcoin Treasuries. ETFs showed an 8% increase or about 111,000 BTC in the same period.
“The institutional buyer who is getting exposure to bitcoin through the ETFs are not buying for the same reason as those public companies who are basically trying to accumulate bitcoin to increase shareholder value at the end of the day,” said Nick Marie, head of research at Ecoinometrics.
Public company bitcoin holdings increased 4% in April, a tumultuous month after the market was rocked by President Donald Trump’s initial tariffs announcement, versus 2% for ETFs, he pointed out.
“They don’t really care if the price is high or low, they care about growing their bitcoin treasury so they look more attractive to the proxy buyers,” Marie added. “It’s not so much driven by the macro trend or the sentiment, it’s for different reasons. So it becomes a different kind of mechanism that can push bitcoin forward.”
Bitcoin ETFs, whose collective U.S. launch in January 2024 was one of the most successful ETF debuts in history, still represent the largest holders of bitcoin by entity with more than 1.4 million coins held today, representing about 6.8% of the fixed supply cap of 21 million. Public companies hold about 855,000 coins, or about 4%.
Regulatory relief
The trend reflects the significant regulatory relief the crypto industry broadly is benefiting from under the Trump administration. In March, Trump signed an executive order for a U.S. bitcoin reserve, sending a strong message that the flagship cryptocurrency, which has long been a source of reputation risk among many investors, is here to stay. The last time ETFs outpaced public companies in bitcoin buying was in the third quarter of 2024, before Trump was re-elected.
In the second quarter, GameStop began buying bitcoin, after its board approved it as a treasury reserve asset in March; health-care company KindlyMD merged with Nakamoto, a bitcoin investment company founded by crypto entrepreneur David Bailey; and investor Anthony Pompliano’s ProCap, kicked off its own bitcoin purchasing program and is going public through a special purpose acquisition company, or SPAC.
Strategy, recently rebranded from MicroStrategy, is still the main behemoth in the bitcoin treasury game. The company pioneered the strategy that more than 140 public companies globally are now emulating. It holds about 597,000 BTC, and is followed by the bitcoin miner Mara Holdings, which has almost 50,000 coins.
“It’s going to be very hard to catch Strategy’s scale,” said Ben Werkman, chief investment officer at Swan Bitcoin. “They’re going to be the preferred landing spot for institutional capital because of the deep liquidity around their equity, while these smaller equities are going to be really good risk returns for retail investors and smaller institutions that want more of that upside – that initial growth that comes in kicking off the strategy – because a lot of people missed it with MicroStrategy.”
A long-term case?
Marie suggested that 10 years from now, there probably won’t be so many companies committed to the bitcoin treasury strategy. Firstly, he said, the more that enter the category, the more diluted the activity at each firm becomes. Plus, bitcoin may be so normalized by then that proxy buyers are no longer constrained by rules and mandates around direct exposure to bitcoin.
“You can think about this wave as a bunch of companies that are trying to benefit from this arbitrage,” Marie said.
Werkman pointed out that most investors that are attracted to bitcoin treasury companies today already have a thesis around bitcoin. For them, leveraged bitcoin equities are likely how they try to outperform bitcoin itself, the foundational component of their investments.
“What people really like about these companies, and why they like to get into these smaller companies, is because they can do something that the investors holding spot bitcoin can’t do: go and accumulate more bitcoin on your behalf because they have access to the capital markets and can issue securities,” Werkman said.
There’s also likely to be a fair number of companies that convert their existing treasury holdings to bitcoin without pursuing leverage the way Strategy does, Werkman noted.
“They’ve got that ability to generate more and more value behind their shares, backed by bitcoin, plus whatever the operations of the company are generating. It’s a unique value proposition,” he said.
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An image of a Quantix drone made by AeroVironment.
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AeroVironment shares fell 7% Tuesday after the defense contractor said it plans to offer $750 million in common stock and $600 million in convertible senior notes due in 2030 to repay debt.
The drone maker said it would use leftover funding for general purposes such as boosting manufacturing capacity.
AeroVironment shares have soared 85% this year, ballooning its market value to about $13 billion.
Last week, shares of the Arlington, Virginia-based company rallied on strong fourth-quarter results, lifting higher as CNBC’s Jim Cramer called it the “next Palantir of hardware.”
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Last month, the company also closed its $4.1 billion acquisition of space-related defense tech company Blue Halo.
Earlier this month, President Donald Trump signed an executive order intended to boost drone production in the U.S. and crack down on unauthorized uses.
The company also has a high short interest level, which may have contributed to some of the recent gains, creating a short squeeze. This phenomenon occurs when a stock price surges, forcing those shorting the stock to purchase shares to cover their positions and prevent losses.
Internet firm Cloudflare will start blocking artificial intelligence crawlers from accessing content without website owners’ permission or compensation by default, in a move that could significantly impact AI developers’ ability to train their models.
Starting Tuesday, every new web domain that signs up to Cloudflare will be asked if they want to allow AI crawlers, effectively giving them the ability to prevent bots from scraping data from their websites.
Cloudflare is what’s called a content delivery network, or CDN. It helps businesses deliver online content and applications faster by caching the data closer to end-users. They play a significant role in making sure people can access web content seamlessly every day.
Roughly 16% of global internet traffic goes directly through Cloudflare’s CDN, the firm estimated in a 2023 report.
“AI crawlers have been scraping content without limits. Our goal is to put the power back in the hands of creators, while still helping AI companies innovate,” said Matthew Prince, co-founder and CEO of Cloudflare, in a statement Tuesday.
“This is about safeguarding the future of a free and vibrant Internet with a new model that works for everyone,” he added.
What are AI crawlers?
AI crawlers are automated bots designed to extract large quantities of data from websites, databases and other sources of information to train large language models from the likes of OpenAI and Google.
Whereas the internet previously rewarded creators by directing users to original websites, according to Cloudflare, today AI crawlers are breaking that model by collecting text, articles and images to generate responses to queries in a way that users don’t need to visit the original source.
This, the company adds, is depriving publishers of vital traffic and, in turn, revenue from online advertising.
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Tuesday’s move builds on a tool Cloudflare launched in September last year that gave publishers the ability to block AI crawlers with a single click. Now, the company is going a step further by making this the default for all websites it provides services for.
OpenAI says it declined to participate when Cloudflare previewed its plan to block AI crawlers by default on the grounds that the content delivery network is adding a middleman to the system.
The Microsoft-backed AI lab stressed its role as a pioneer of using robots.txt, a set of code that prevents automated scraping of web data, and said its crawlers respect publisher preferences.
“AI crawlers are typically seen as more invasive and selective when it comes to the data they consumer. They have been accused of overwhelming websites and significantly impacting user experience,” Matthew Holman, a partner at U.K. law firm Cripps, told CNBC.
“If effective, the development would hinder AI chatbots’ ability to harvest data for training and search purposes,” he added. “This is likely to lead to a short term impact on AI model training and could, over the long term, affect the viability of models.”