Ill start off by saying that I hate exclusive licenses. Every collector hates exclusive licenses. Every sport has an exclusive license partner, which makes things worse. If you collect Baseball, you are buying Topps cards. If you collect Basketball and Football, its Panini. If you collect Hockey its Upper Deck. Because most collectors collect more than one sport, having one choice in each area becomes the most frustrating part of their hobby life.

On the other hand, manufacturers love exclusive licenses. It makes everything easier. From obtaining material to embed in the cards, to licensing autograph content, it becomes the best tool in their tool bag. It also builds lasting relationships, which in most cases, is just as valuable.

Why Are There So Many Exclusives?

This is going to take a bit to explain, so bare with me. League licensing is one of the most complicated and fought over parts of the industry side of the collecting hobby, and even with exclusives, it doesnt seem to get easier for the people involved.. Most of what I am going to say is second hand, but received from 10 plus years of direct communication from people who work at the manufacturers.

Back in 2006 and 2007, the seeds were planted for the situation we find ourselves in currently. Most of the sports had at least 2 licenses that granted the manufacturers the ability to produce cards with professional logos and professional players. One side is the “Properties” arm, which is all about the likenesses and names of the teams, stadiums, games, etc. The other side is the Players’ Association side, which gives access to use the likenesses of the active players themselves. There are other licenses that go along with these, including some for groups of retired players, the hall of fame, stuff like that.

Additionally, for almost every sport, there were at least two companies that owned both sets of licenses. Most of these licensing arms have been in place for many decades, and most of the time prior to the mid-2000s, leagues were much more likely to give them out to people who were interested in trying their hand at trading card production. This is the main reason why Upper Deck was able to storm the hobby in 1989, and release a Major League set – licenses were SEEMINGLY easier to come by and likely cheaper for card companies.

Things changed for a few reasons, need for access, need for content, and one other giant thing – money. When Upper Deck wanted to use the license to produce MLB trading cards in 1989, they only needed one thing from the league itself – access to take photos to use in the cards, and as the internet became more prevalent, even that became less of a need. If Upper Deck needed to make MLB trading cards in 2009, everything would have been infinitely more dependent on the league.

First, each league approval process had likely become much more stringent with protection of the brand as important as anything. There were also more products included in a license, sometimes more than 50, which required more headcount for approvals and processing at the league office, and thus more resources.

Secondly, with the addition of autograph content that drove 100% of the products released, access to the players became essential and necessary. The players’ associations would need to ensure that the players cooperated, or their license wouldnt be as valuable either.

Lastly, the content is also driven with pieces of game used material, which means that access to authentic jerseys for as many products as possible would inevitably fall on the league as well. If people wonder why Panini and Topps have switched almost entirely away from game worn, this is the reason. Game worn jerseys are sold by the league, valuable to collectors, and are hard to authenticate if the league doesnt provide them. Ill get to this more in a bit.

This is only a minor complication of the plethora of complications, some of which just stem from volume above everything. In 1982, there were like 2 products a year. In 2002 there were 20-40, in 2012, it was double that. You can see from a league perspective, that’s a lot of work for a part of your licensing arm that pales in comparison to something like sweatshirts and hats.

Remember, in the mid 2000s and well beyond, every week there was an article in the paper about how things have dwindled down, shops closing, shows empty. You can see why the leauges wanted to simplify their card existence. They just wanted things to be easier with cards.

Then something else happened – Upper Deck found themselves in a bunch of problems stemming from money, and even more problems from lawsuits with other licensors. For years, Upper Deck and Topps were the most important licensor in the hobby. Similarly DLP (Donruss, Leaf and Playoff Brands) was struggling, and Fleer had gone out of business.

Within a few short years, Upper Deck’s trouble had led to a loss of all of their major licenses, and a group from Italy known for sticker albums had purchased DLP to distribute a new brand of trading cards. Not only did this bring new consolidations of power, but also a new influx of influence and money that was absent prior. When I was writing this site back then, I commented how Panini’s new power was in their available cash. Topps was being bought and sold, and Upper Deck was reported on the verge of bankruptcy at least once a month.

Panini’s stability also gave the leagues something that they desired as well, money and resources. They knew that by giving Panini the exclusive license to their sport, they would solidify a stable avenue for the production of trading cards, and keep money coming in. By all accounts, Panini also overpaid by a drastic amount for each negotiation they were looking to become engaged with. You know what happened? They won, a lot.

The NBA was the first domino to fall their way, NFL being a huge win in 2015. NHL was theirs at one point too, leaving the Topps exclusive with MLB the only outstanding license they could never acquire during this run. They did manage to pry an exclusive away from Topps with the MLBPA, allowing them to use logo free designs with current players.

You should start to see a clearer picture of why this was happening – cards just werent that important, stability and money are important, and hence, the exclusive life began and continues today. The question is, how will licensing change now that cards are a top story, million dollar sales are national news, and investment in collectibles are the most surprising thing to come out of the pandemic?

League Licensing Battles In the Future

When a commodity is hot, the barrier to entry becomes that much more thin. Although there are still huge barriers in place, the desire to partake in the hottest thing out there can do some crazy things. Especially if you are a company with the means or methods to enter a market, and brand recognition isnt an issue.

Most of the league licenses are in place with exclusivity for a few more years. Topps has MLB through 2025, and Panini and the NBA/NFL are likely in a similar situation. In terms of hobby life, that is a long time. From a company perspective, it really isnt that long, as negotiations on a hotly contested commodity can go on for a long time. This means lots of prep, lots of posturing, and as we saw the last time the NBA license came up, some gamesmanship.

The world of the licenses has changed so dramatically over the last few years, one has to wonder what could happen if the bubble I referenced in the previous post comes down, or if things only get hotter.

Undoubtedly, the cost of the licenses is going to get quite a bit more competitive, especially now that there is leverage on both sides of the equation. The leagues have a lot of power, because there will be desire from every previous card manufacturer to get into a licensing position, and more desire for the leagues to likely want the piles of cash from multiple sources instead of just one. Right now, there is barely enough supply to cull demand, and that is creating huge secondary market volatility. The secondary market’s performance showcases there is enough to support multiple companies, and that is a HUGE piece of hand in the relationship.

Secondly, because each license has all of a sudden become insanely profitable, all manufacturers currently in business have plenty of money to throw at their business and the league. That includes the companies in power for each exclusive. Panini and Topps have more money to fight for the right to remain exclusive, as well as other companies like UD and Leaf have to show that they deserve a shot at a shared license. Because UD has a legacy of cards unlike any company (both good and bad), they have a lot of power to move their station higher in the consideration. Their history may be a red flag in a down industry, but that might be overshadowed now.

Topps has a huge runway as well, because their brand recognition is the top in the game. Even though Panini makes more cards than anyone these days, the choice to use an unfamiliar name that is shared with a grilled pressed sandwich means that they have less in their name than any other company. I would venture a guess that most casual Americans would know that Topps, Upper Deck and Leaf all make trading cards. Panini, very few would be able to identify outside the food connotation.

Player Licensing is Going to Change the Game

Right now, there are exclusives in place for players as well as for leagues. That’s why Michael Jordan hasnt had a card since Upper Deck lost their last licensing method to produce basketball cards. He has an exclusive partnership with Upper Deck, much like LeBron James, Tiger Woods, and a few others. Panini has them too, Topps as well. It used to mean a lot more, when shared licenses meant having to keep the biggest names for yourself.

Now, it means little to nothing, because few players would be able to appear in other products outside the ones officially licensed by the league. A few things have changed, however.

The craziest part of this entire thing is that athletes have become some of the most important drivers of the boom. Prior to 2020, most athletes saw cards as another thing they were required to participate in. Some even hated signing so much, that they dropped out of the game completely.

Obviously there were exceptions to the rule, but for the most part, athletes never really saw any potential in cards, unless they had nostalgia of collecting from when they were younger. With most of the rookies now being born past the original collecting boom back in the mid 1990s, the fun factor was greatly diminished before this year brought everything to the forefront.

You can imagine that if players like Deshaun Watson and Kevin Durant are taking cards seriously, their buddies and their agents are as well. Some players have historically been very involved with every aspect of their brand. Ask Russell Wilson. Now that cards have become such a gigantic source of potential funds, there could be humongous impact for those players with leverage.

Here is the caveat – every player covered by the PA license will continue to have trading cards if needed. The cost of adding autographs to those cards is a different story. Players have control over how much they charge per signature, and that’s where the volatility could impact their inclusion. More importantly, in some sports, the autograph has become a less important part of a set, with more and more focus on rare cards created through serially numbered parallels. This situation is a complete departure from previous years, and as with every negotiation, each side has their perks.

The same could be said for legends and retired players, as their licenses are rarely done with the same stroke of the pen as the league licenses are done. Many retired players join licensing groups or offer their own permissions, and with card prices soaring, all of that is going to change. This also means that their usage could be deemed unworthy and removed due to the cost of inclusion versus the value of inclusion. Once a player is no longer covered by the players’ association, it falls on a number of different levers to deteremine their worth to the overall trading card industry. For important guys, that could be one source of negotiating power, for others – it could be the end of their time on card fronts.

Overall, this is going to come down to sustainability. Can the bubble be sustained? Is it a bubble? Will the leagues consider this time as a benchmark for potential popularity? All of these things are going to have a ton of impact on the licensing future of trading cards. The more that card values and sales figures dip and rise, the more question marks are created. If anyone believes that this is the final form of the industry, money always has an effect. Right now, there is more money floating around than any other point in trading card history. Its time to see what that means.