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Sunday, July 14, 2024
Law

Defiant Panini Is Contesting Early Breakup With NFLPA

  • A source told FOS the NFLPA leaned into the “substantial change in executive management” language in the contract as the reason to cancel the deal early. 
  • Panini filed a demand for arbitration on Tuesday then put a $249.95 Jalen Hurts box set on the market on Wednesday.
Panini
Panini

Panini officials didn’t put all the NFLPA products in the spokes of their 10-speeds when the union terminated its deal with the trading card giant in favor of Fanatics on Monday.

Instead, Panini filed a demand for arbitration on Tuesday and released its Luminance product for $249.95 box featuring Jalen Hurts on the packaging on Wednesday — one of many planned NFLPA-licensed items in the company’s 2023 NFL/NFLPA trading card line.

“Panini is poised to continue to deliver superior NFL products with the most powerful and meaningful brands for our partners and collectors as we approach the start of the NFL season,” Panini said in a statement. 

Two years ago, the NFLPA signed a 20-year deal with Fanatics. That deal, however, wasn’t supposed to commence until 2026. 

But on Monday, the NFLPA distributed an email that announced it would end its contract with Panini “effective immediately.”

The NFLPA has been mum as to the reasons why it moved to end its contract with Panini. Multiple messages left with the NFLPA this week by Front Office Sports went unanswered. 

But a source with knowledge of the situation told FOS the NFLPA leaned into the “substantial change in executive management” language in the contract as the reason to cancel the deal early. 

There have been two personnel moves among the top nine executives, but that didn’t include Panini America CEO Mark Warsop, who has led the company for more than two decades, and only one of those executives reported directly to him. Both positions were quickly filled. 

“We have exclusive rights to NFL Players’ names, images and likeness under our existing agreement through February of 2026 — as a result we have signed more than 360 active NFL Players to contracts to utilize in our licensed NFL trading card products,” Panini said in a statement. “NFLPA’s proffered excuses for termination not only lack all factual and legal merit, Panini has consistently outperformed its contractual commitments including delivering the largest payment that the NFLPI has ever received for royalties on trading cards this past contract year.”

NFLPA leadership met with Panini executives just two weeks ago and there was no indication the NFLPA was going to try to force Panini out, according to the source.

Panini hasn’t stated its intentions with the rest of its stock of NFLPA-licensed products outside the Hurts release, but there are numerous products listed on its site with NFLPA branding listed as “coming soon.” 

Panini also has deals with more than 360 NFL players and the NFL, so there will still be other products no matter how the arbitration is decided, a process that could take several months. 

Beyond the potential for an arbitrator to rule on Panini’s issue with the NFLPA, Panini has ongoing litigation with Fanatics — and vice versa. 

Earlier this month, Panini filed a federal antitrust lawsuit against Fanatics.

“Fanatics began its anticompetitive conduct by secretly securing long-term, exclusive licensing deals with the NBA and MLB, along with each of their respective players associations, the NFL Players Association, and later the NFL itself,” Panini alleged in the complaint

Panini alleged Fanatics’ anticompetitive practices included “raiding” Panini’s employees, buying a controlling stake in Panini’s main manufacturing partner and Fanatics’ 2022 acquisition of Topps. 

Fanatics countersued days later. 

“Simply stated, it was obvious to licensors that the bold, comprehensive, and innovative vision Fanatics Collectibles brought to the table marked the path forward for the future,” Fanatics’ complaint stated. “And Panini should well understand why licensors here proceeded as they did, having itself acquired licenses (including its long held NFLPA license) without having to participate in a bidding process.”

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