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Saturday, March 2, 2024
Law

Panini Alleges Fanatics Induced NFLPA, WWE to Break Contracts

  • In an amended federal complaint, Panini makes new claims after the NFLPA and WWE sought to end deals early.
  • The NFLPA and WWE were blocked from starting their deals with Fanatics early.
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Fanatics induced the NFL Players Association and WWE toward seeking to terminate their agreements with Panini early, according to an amended federal complaint obtained by Front Office Sports. 

A legal battle between Fanatics and Panini that began in two federal courts in early August swung in a new direction when the NFLPA and WWE unsuccessfully tried to shed their existing deals with Panini.

“In lockstep fashion — almost as if it were planned — within days of the NFL Players Association’s attempt to terminate its contract with Panini and announcing Fanatics was its new exclusive partner, WWE did the same,” Stuart Singer, one of Panini’s outside lawyers, wrote in a new complaint filed in U.S. District Court for the Middle District of Florida on Tuesday.

Panini is seeking an injunction to prevent Fanatics’ alleged anti-competitive conduct as well as unspecified damages and a jury trial.  

“Panini, realizing that its original complaint was legally defective, has tried to fix the problems with it.  Fanatics believes Panini’s newest complaint is equally defective and intends to seek total dismissal,” a Fanatics spokesperson told FOS.

A Panini spokesperson declined comment.

FOS previously reported that the NFLPA and WWE used the same change-of-control provisions to cancel their contracts with Panini. The NFLPA and WWE’s parent company — Endeavor — have equity stakes in Fanatics. 

The new complaint alleged Fanatics used “unlawful means” to hire 36 Panini employees, effectively setting the stage for NFLPA and WWE to argue there had been a substantial change to Panini’s executive management team to trigger that provision. 

According to the complaint, the list of employees targeted included longtime Panini America CEO Mark Warsop.  

Warsop chose to remain at Panini, although Panini’s legal team stated in the filing that they urged many others to quit the company. Fanatics offered “compensation packages at levels that make no economic sense.”

The NFLPA has a contract with Panini that runs through 2026, and Panini’s deal with WWE runs through 2025, and each previously announced that Fanatics would take over those trading card deals. 

“With the aid and encouragement of Fanatics, these employees stole Panini’s trade secrets and helped Fanatics recruit other employees away from Panini, each in violation of their employment contracts with Panini, specifically the proprietary-information and non-solicitation provisions,” the new complaint alleged. 

The WWE was denied a temporary restraining order in federal court on Sept. 25. Days later, an arbitrator rejected the NFLPA’s request for emergency relief. 

Those decisions effectively kept Panini’s existing deals with the NFLPA and WWE until both cases were decided.

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