An ongoing legal dispute between trading card platform Panini and Fanatics, the digital sports and e-commerce platform, has escalated with Fanatics striking back with a countersuit.
In the suit, Fanatics alleges that businesses that have left Panini in favor of the e-commerce giant have done so due to its incompetency.
Last week, Panini filed an anti-trust lawsuit against Fanatics alleging it is attempting to monopolize the trading card market after entering the sector two years ago by securing long-term, exclusive licensing deals with leagues, effectively locking Panini out of the market.
Panini’s deals with the unions of basketball’s NBA and American football’s NFL expire in 2025 and 2026, respectively. Fanatics is set to take over with a 20-year deal with the NFLPA starting in 2026 and will also become the exclusive licensee of NBA cards through a deal with the NBA and its players’ union, the NBAPA, in the same year.
Among its accusations, Panini has claimed it was not allowed to bid or compete for the licenses Fanatics acquired and poached its employees by “threatening them with not working in the industry ever again once Panini licenses expired.”
Panini also claims Fanatics circulated “false derogatory statements about them” telling the leagues and its players Panini would be “incapable of performing for them, will be out of business soon, and lacks the money to pay for them.”
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However, today (August 7), Fanatics struck back with its countersuit defending its new deals and accused Panini of trying to sabotage the company through unfair and illegal means.
Fanatics alleges that “as Panini licensing deals neared expiration, licensors unsurprisingly chose Fanatics Collectibles as their new licensee that would commit long-term to the business” as Panini America has “openly [been] trying to sell its business for a decade.”
Fanatics also noted that Panini did not secure its current licenses through bidding for the contracts but rather acquired Donruss Playoff in 2009 which held the contracts.
The Fanatics suit reveals that it entered into a negotiation with Panini over the early termination of the NBA and NFL license agreements Panini had but that Panini America chief executive Mark Warsop provided falsified numbers to receive a larger termination fee from Fanatics.
Sources close to Fanatics told GlobalData Sport that Panini has been threatening it with a lawsuit for months, “using it as leverage to try and make [the company] do a bad deal based on falsified profit projections.”
The source added when the company declined to do so, Panini “filed its meritless suit.”
The allegation also appears in the suit, with Fanatics claiming: “Because it can’t compete with Fanatics fair and square, Panini has been out to sabotage Fanatics through unfair and illegal means.
"We set forth in our complaint how Panini has been resorting to one dirty trick after another to hold Fanatics back – trying to dupe and stall Fanatics with bad-faith negotiations, falsified revenue projections, and heavy-handed efforts to intimidate and even sue former employees who left Panini to find a better future and more inclusive workplace at Fanatics.”
Addressing Panini’s accusations of poaching employees, Fanatics said Panini brought suits against “at-will former employees” that were not restricted by non-compete clauses who took jobs at Fanatics and threatened to do the same to others.
The point of antitrust lawsuits is usually the contention that consumers will be worse off under the new circumstances – a point Fanatics disputes in its filing, citing Panini’s previous incompetence.
Its filing accuses Panini of trying to use antitrust laws to insulate itself against competition after Fanatics has proven to be a superior partner for its licensors, while Panini has not innovated its product or kept consumers happy.
The filing quotes a statistic that Panini’s customer service has “about a 95% abandonment rate” and that the Better Business Bureau’s score for them is an “F.”
The suit reads: "Not only has Panini failed to invest in a robust business model, marketing, or innovation, but critically it has also failed the most important constituency – collectors.
"In particular, Panini has conspicuously failed to field a dedicated customer service and support team for US collectors, exemplifying Panini’s larger disregard for consumers. Unsurprisingly, dissatisfaction has soared due to Panini’s shoddy quality control and questionable marketing practices.”