Hi guys, we are back. Awesome interview, it's become like an annual tradition here at SCN. We get Mike and Mike, not the losers from ESPN, the guys that matter in the hobby. So, we appreciate the time Friday at the National. How you guys doing?
Doing great. I mean, pretty freaking excited what's going on here.
Absolutely. Mike, how are you?
Fantastic. I mean, we're at the center of a movement here and we're just getting started.
How does this compare to what you guys just did two weeks ago at Fanatics Fest? I mean, you guys got to be tired at this point.
Look, they're two completely different approaches. Fanatics Fest is a giant sports festival. Really, the original idea was how do we do Comic-Con in sports? And really just create this incredible sports festival, some of the top athletes, celebrities, artists that we have. And getting new sports fans into collectibles. And this is the most authentic collectible show in the world. So, completely different things, completely different target audiences, both so important.
Uh, you're not tired, by the way.
No, I can tell you're not tired. I'm the moistest one in this room.
I might have a little bit to do with it.
A few other factors. I'm just saying it could be a few other factors.
We're going to cut that edit out. So, there's a matter of factors. So, I was noticing, we have been set up here for the entirety of the show. And what I noticed is all these Topps people keep coming up. They're not Topps people working the room. They're Topps people that are actively engaged in the hobby. Is this something that you guys promoted or is this just something where you guys have a lot of people that love collecting?
What I always say, if you want to be good at our company, you can do that without being cool, right? It's the executive skills, it's the work ethic, it's the intellect. And all those things really matter. If you want to be great, you have to have that class, you have to be a collector.
And to me, the number one thing I think when it comes to people that we want on our team is obsession. And part of being obsessed is being in the hobby. I mean, look at this. This is fun. If you can't get into this, you can't get behind this, you can't get immersed in this, I don't know what to tell you.
Absolutely. Well, I guess—I don't want to hog the questions here, but I'm very curious. You guys have had activations at the show already. We're only like halfway through it. Are you guys planning anything big throughout the rest of the show? Because I don't know if anybody else knows, there was a picket line outside this morning. Something I did not expect to see. That turned out to be an activation about no fees for the Fanatics Collect app, which I thought was actually some brilliant guerrilla marketing. Like I actually got a little nervous whether it was really—
The only thing I was unhappy about though, I thought it'd be better if people got arrested. Just it'd make more news.
I almost got run over by a car. That helps.
I almost got run over by a car filming it, so if that helps you out at—
Yeah, that's what I'm looking for. We don't want you to die, but it was like just a—medium wounding, that would also be, you know, more fodder for the story, that would help.
That's why Jesse was good. Great is obsessed and gets hit by the car.
I do want to go back to the Fanatics thing because again, I think it's laughable that the idiots—and I say idiots because most of the people in the hobby I think are pretty cool. We're nerds, but we're in the hobby together. But there's this stupid sentiment of like one or the other, us against them. And you guys, which I love, you guys consistently shown up by word and action. Yeah, I think it's stupid. You guys know the National and vice versa. And a great example of that was the Card Combine. Like you guys focused on educating people at Fanatics Fest. I'll tell you, how do we become a collector and stay in this thing?
Look, when we got into this business, and you know, we came with the original idea in November 2020, we got the rights over 2021 for some key sports properties. And then we bought Topps January 1st, '22. We had a goal, how do we 10x the hobby? Okay? And people thought we were crazy when we said that. I think to us it was about how do you get sports fans into collecting cards? And how do you make this not a real niche market? How do we start to open—and by the way, do it globally as well. We're still in the early, early, early days. And we were talking about we might have actually 5x the hobby so far.
Um, this show alone would make me believe that.
Right. And you see it at Fanatics Fest as well, sports fans that become collectors. But the great thing is all the athletes that have become obsessive collectors. And so many of the big stars—that's the thing you see at Fanatics Fest. It's so fun. You see, whether it's Karl-Anthony Towns and how obsessive a collector he is, or Jason Sudeikis, or Ryan Reynolds the way he's getting into it, or Grant Williams who got into it at the first Fanatics Fest. You just see this becoming prevalent. So we really feel like we're just in the early days of really having this movement get going. I think when I look at Fanatics Fest, we are so excited about the energy we can bring to the world that comes out through Fanatics Fest. The National is about what happens here. This isn't like a big social media movement or big internet movement. It's about great things that are happening here for the 150,000 people that are in this building over the five days. Fanatics Fest is about how do we market to the world and get people into the hobby.
The idea that you just mentioned—like this is something for the US—it makes me wonder where are you guys headed outside the US because there's been pop-up shops. You already obviously have the London shop. I'm curious, you guys have plans for other countries right now?
Yeah, I mean we started the London store because there weren't a lot of great places to buy cards in London.
Yeah, I think there's less than ten hobby shops in all of London.
None of them had the experience that we wanted. And so you can create the demand, but if you don't have a place to build a community and buy the product, you're not going to build an industry. You're not going to build a culture of collecting. And so we said, 'You know what? We're going to build it ourselves and we're going to try to do it the right way.' And we thought it would do five million the first year. It did twenty-five.
Dead serious. We think it'll do forty this year. It's one of, if not, the biggest hobby store in the world.
Jeez. Okay. That's awesome.
And we're going to have Paris this year. We're going to have Munich next year. We're going to have two to three per year all around the world, all international. And it's really going to be this hub of collecting, this hub of community, and building these markets. And you now see, whether it's the London card show, whether it's the number of athletes—you see it in the UK. There is an undeniable collecting culture, and we want to replicate that market by market.
The one thing I was going to say to you that Mike's not saying is, we've got many great hobby shops here in the US and many more opening. So, we didn't feel the need to put hobby—we don't want to put hobby shops here. But if you look at London, I remember Mike calling me and he said, 'Hey, you know, we're opening a store in London.' I'm like, 'Why?' He's like, 'Cuz nobody else does it well. And so, we need to show people how to do it well.' He couldn't have been more right about that. And so, I think for us, as we're doing these stores internationally, it's just growing the business in a big way now. We were talking about what happened when we opened London. The reason I ended up going was like, 'Hey, Mike, we need you to come over because we want to get a great start out there. And it's going to be helpful if you come out there to help get some great people out there.'
So, I went out there. We got Lewis Hamilton out there. We had four thousand people in line. Four thousand people in line to get in the store.
Now, that's a big shop. I don't think it's four thousand people, but—
Most of those fans were Lewis Hamilton fans, not collectible fans. But they start converting. Now, what was happening with the opening of his stores—
Yeah. He just opened his first store last week.
It's—and he's got several more stores coming. That's what we're talking about—growing, that things take time. But we talk about globalizing the business, getting the stars involved. That all happened because Mike decided to open the store in London.
I came out and we got Lewis out there. And Lewis said, 'Hey, I love this. I grew up collecting cards. I want to open.' And now he's a giant collector. He's chasing cards aggressively. He's really into the hobby. And we keep doing that person by person, brick by brick. And that's why I think we have probably 5x the hobby so far. And I think our original goal of 10x-ing was a lame goal by me.
Oh, yeah. That was our goal last year.
Just for the record, it was the team that did this.
Yeah, okay. Sure. Well, even to that point real quick, just to carry on—that was kind of my point with Fanatics Fest. That's a great event. It's a standalone. You're bringing in sports fans. Guys who don't really care about cards yet. I think this is kind of where you see the culmination of, hey, first step, now we can do that. Same as what you're talking about. Maybe guys just like Lewis Hamilton, but that then leads them to buy a card and get in. I think it's awesome. I love that.
I was with Lewis Hamilton a few months ago. He was literally like, 'I'm obsessed with Fanatics Collect.' He was there bidding on different things. And by the way, one of the best Fanatics Collect stories, KAT told me he couldn't wait to finish a post-game interview because he had a bunch of bids live and he wanted to make sure he didn't lose them. And he rushed off the court—this is no embellishments. He said he rushed off his post-game interviews to get back in the locker room in the middle of finals to see how his bids were doing. That's how we build the hobby, by the way. If the biggest stars in the world, like Lewis Hamilton and Karl-Anthony Towns, if they care authentically about collecting, then that's going to get so many other people to care about collecting.
Well, and I think about how we saw an international theme throughout all of Fanatics Fest. We're seeing—there's a whole international section here at the National. I was thinking Fanatics Fest here in America is so big. I could imagine doing more than one a year, but I could imagine doing Fanatics Fest in other countries because I went to the UK earlier in the year. I got to go to the London card show. I got to visit a few shops in Dublin. I didn't get to see Lewis. I thought I saw him, but it was another guy. And I thought to myself, there is a ravenous group of collectors here. And like you said, they're being a little underserved in a lot of parts of the world. I could see like Germany, which is also a huge collecting spot, a Fanatics Fest international, because the amount of people willing to travel here—I would imagine that if they're already in that part of the world, they'd find it much easier to travel to a Fanatics Fest there.
Look, when we started Fanatics Fest five years ago, we came with the idea and we launched it the first time three years ago. I think we thought that would have been a possibility. Sitting here today, I'll tell you, we should do this once a year in New York City. It's a big—I mean, you've got LeBron James there for two days. We're spending over eighty million dollars, something like eighty to ninety million dollars, just to produce that show. So, from our perspective—but when you go there and you see on social media, it's worth every penny and more because it's doing exactly what we want it to do, which is to get the word out about this amazing hobby.
Yeah. Awesome. I was going to ask you. So, you've obviously been busy with the shows. You've been busy with—every big card that gets hit now is on ESPN or it's on the news somewhere locally and nationally. I see so much going on that you guys have your fingers in and it makes me wonder how do you gauge success with this because I view this as huge success compared to where when we started this podcast back in 2020, it was totally different. Nobody cared about cards, but we live in a time where everybody cares about cards whether they collect or not.
Well, I don't think everyone cares about cards, but I think a lot more people care about cards today than they did four years ago. But you should answer first and then go ahead and I will.
Yeah, look, what is our goal as an organization? Then it's to relentlessly enhance the collector experience. And for us, what does that start with? It starts with product. We are obsessive—and I use that word intentionally. We're obsessive about making great product. And that's innovation, that's authenticity, that's storytelling, that's attention to detail, all of it, right? And I think what you're seeing first and foremost is the culmination of making better and better, richer and richer product, whether it's sports, non-sports, whatever the case may be. That storytelling, that ability to connect the fan to the character or the athlete or the team or the moment that they love and they want to connect with. And then from there, once you really invest in product and storytelling, then it's about marketing, then it's about the relationship with the audience, then it's about distribution, then it's about operations, then it's about customer service, then it's about technology. But we really start with creative excellence. And I think that's really been the mindset and the shift in our thinking and approach—we are a product-first company and we are a storytelling company. That's what we do. And that now infuses our DNA. We're obsessive about creativity and innovation and then consistency, right? We're happy to do the debut patch every year. We're happy to do the gold logo man every year. And because our storytelling has become so good and because of the Fanatics relationships and ownership, when we have these ideas, we go to the leagues and the PAs and the athletes and say, 'Hey, we want to do this thing called the debut patch or we want to do this thing called the gold logo man or the gold shield.' And what would have taken years if it was successful—or never—is now a phone call away. And one of the reasons why cards has become so successful is it's now part of the fabric of culture.
Yeah. And look what we just did with LeBron James. He announced his team—
And crazy. That's because trading cards are now firmly a part of the culture of sport and we think we're just getting started with that.
Hey, so to that point too—the only athletes that has been a criticism, some of myself included, like, man, I'm curious how many of these guys are interested versus of, hey, this is a contract thing, you've got a piece, go do something for us. Like, what's the balance there?
So first, if you work with us, you won't be happy, so we want you to be—
Oh, I got a list. I'm pumped. I cheered, my man. The criticism—
We have a rule that we do not deviate. And you can take us at face value and it will prove itself out. You can call—you'll be wrong. The rule is we will not work with anyone to get them in the business, to really showcase them, if it is not authentic. Okay? And so, you know, for us, the amount of people hitting us up, Brandon, or saying, 'Hey, Roob, hey Mayhem,' you know, 'I want to open stores.' I'm talking biggest athletes in the world. We say no to so many people because they're not into it.
I'm going to tell you something right now—if I brought KAT here right now, you know who's more about cards than two of you?
Yeah, I talked to KAT like five years ago, by the way, in DMs. He was buying cards then, so I don't doubt it.
He knows so much about cards, it's insane.
Well, his fiancée is a collector too. I got to sell her a card at the show.
Jordan is a huge collector, okay. And so when KAT came to us and said, 'Hey man, I want this to be my day job.' We joke like, you know, his part-time job is playing in the NBA. He's pretty good at it. His full-time job is cards. They're actually both his full-time jobs. But that for us, we love it. It's completely authentic. And Tom Brady—it's completely authentic. He's so into this. The amount of stars that have called us behind the scenes that you don't hear about—these might get in the business to make money. We're like, 'Yeah, it's not for us.' Like if you're not really into it, we have no interest whatsoever. So I'd say, when you see people front and center, it's because these guys are into it. He is like madly into it. He loves it. Hey, he loves it. So let me tell you something. When you try to have somebody do something and it's not authentic, eventually people see through it and it falls apart. So we really do not do that. And that's why today, I mean, I can't get through a day without some really well-known person asking can they open stores, and the answer is no to most people because they're not authentic. They're just trying to make money from the hobby.
Cool. And I like it because again, like we talk about, hey, we've been in the hobby for decades. We want this thing to keep going. I'm glad it's popular but I don't want this to be a moment. I think things like that are important. You have people who are actually invested, which I love.
Look, you're still really early on if you really think about it. Today our business in collectibles is still eighty-five percent in America. But there's, you know, whatever, three hundred, four hundred, five hundred million people out of seven or eight billion people live in America. So there's a big opportunity globally. I mean, there's probably no bigger moment than we go out, we bring Keffe on as a new partner starting in 2031. And three months later, you see the players—eight to nine hundred of them—march out on the pitch with debut patches, which will come out in 2031. Then you saw Messi, Ronaldo playing the last games with legacy patches. And how many global football fans are we talking about? We're talking about all these patches that were coming. So it's like that's how you get somebody to go from a sports fan to a collector. Or in the case of these legacy patches, I'd say an art fan to a collector. Because how would you like to own the trading card that had the patch of Messi's last World Cup? He'll be retired. There's already people talking years away and there are people talking about how do I get my hands on it.
That's the innovation Mike and his team.
There's a lot of, I guess, ideas of how much the growth of the hobby has been shown here at the National. I am very curious. We have five more months of this year. I know how math works. So if you had to envision the rest of this year into the end of December, do we continue on this trajectory? Because we see every week it seems like a GOAT sets a new record in price and a lot of times at these events we're talking—well, we know it can't continue going straight up forever. I'm curious. I'm not going to ask you when does it end, but do you think through the end of the year we're still going straight up?
You have to have resets. Like it's just like a financial market, you have to have resets. We don't—straight up is bad, okay? We shouldn't be confused about that. So to us, what we need to do is do the fundamental things that build a great business in the long term and then, like any market, I think it will go up, reset, go up, reset. I think resets are a good thing. We don't actually spend a lot of time thinking about it because in all cases we want to make the best products. We want to amplify those products through our marketing. We want to bring as many athletes, celebrities, and frankly people into the hobby. We want to build the infrastructure on a global basis. We want to bring technology in in a bigger way. We want to do things like eliminate fees for sellers on the Collect platform. We want to do the things that ultimately have sustained success and really think about this long-term. We're not trying to make the quick buck. We're not trying to do things that are short-term. We're trying to build long-term storytelling. We're trying to build long-term connections. We're trying to build community. And so, look, do we think what we're building is enduring? Yes, we do. We believe that this is both sustainable and that this is just the beginning. Does that mean I know what next week is going to look like or next month or next year? I do not. But I do know that we have every intention of doing this the right way, and we think that will give us the best chance for long-term sustained success.
Okay. And on the long-term success too, and we've had this debate a little bit on the show. You've probably heard some of it. The whole breaker versus card shop debate rages on, right? Like too many breakers, not enough shops, vice versa, whatever. Local card shops struggle. How do you guys come up with that balance of, hey, we have X amount of shops with allocation, want more, we have this breaker side? Like what does that look like internally?
And it's a complicated answer with one very simple filter: What is the best for the collector experience? And look, we are very, very supportive of hobby shops, okay? For a variety of reasons, but most notably, we think that buying in a hobby shop is a great collector experience. Agreed. Provided that hobby shop does things the right way, right? It has the right selection, fair pricing, the right hours, community engagement. But you think about what Rip Night is. Everything Rip Night—we started with fifty stores and thirteen athletes three and a half years ago. We thought we were changing the world. Now we have thirteen hundred stores, one hundred fifty athletes, and sixty percent of the stores said it was the best commercial day they had—the highest sales volume in the history of their store. This was just meant to be a marketing exercise and now turned out to be a commercial exercise. The MVP buyback—you literally have to bring in your Chrome MVP buyback, change it, bring it, exchange it for store credit, brings a ton of people in the store. They spend more, all these new customers. So we think the hobby shops are and will continue to be the fabric of this hobby, but we want them to do it the right way. And then breakers—look, we think breaking is a good thing. It allows people accessible price points. It allows people to select for the team that they want or the character that they want, right, without having to buy the whole box. Think about it as a group buying format. That's really what it is and a syndicated format. And what people I think lose sight of is it's not the breaker that gets the card. There's a collector at the other end of that. The breaker opens it on camera and everyone says, 'Oh, the breaker pulled the card.' No, no. There's a collector that got the card. So we don't say, 'Oh, our breakers are better than hobby shops or vice versa.' But we think there are so many great hobby shops out there that drive the collector experience. We think there are so many great breakers that drive the collector experience and we want to support everything that drives the collector.
Yeah, what we will do is keep pushing everybody to be better and raise the bar. This morning was the first day—we got in the car, we went to Dick's Sporting Goods at the new House of Sports. It was forty-five minutes to an hour from where we were to go see their new hobby shop that they have out there. And by the way, that was the third time that Mike and I have done it since we had them start this with us a year ago. And every time we go there, we give them lots of input on how to make it better and better and better. Today we actually rate hobby shops in I think seven different levels. And the best hobby shops, no different than what the footwear companies do, get treated the best because they give the best experience to the collector. I can tell you that one of the places I live—I'll leave it nameless to not embarrass anybody, but—
There's a hobby shop that was probably 200 square feet. I went in there. It was absolutely horrendous, like maybe a year or two ago. It was absolutely horrendous. And now you've had three new hobby shops that we've sold to on a direct basis that have opened up in that city, okay? And the new hobby shops are amazing. They're all doing spectacular. The collectors are loving it. So, it's our job to push everybody to be better. It's your job to push us to be better. We all need to push each other to be better. You can't be comfortable with something we're selling in 30 years ago. That's the way the hobby shops look.
Okay? And by the way, we're somebody here. We love this show, okay? We love the National. By the way, I just got off — you think what we was — we were just been through a World Cup where I went to eight games, Fanatics Fest, which I spent a lot of time with the details. I just lowered party right before that.
No invite. No invite. Okay.
I'm in Allen here for three days. Coordinated with you, Mike.
We got to keep saying like we look around here and we love the excitement, but we also want this show to be better. The same way we want Fanatics Fest to be better. Everything, any time we're ever satisfied...
Complacent and happy. So, so let me push back on you just on that because then the next complaint is, yes, okay, Dick's House of Sports. We got Tom Brady opening card shops, Lewis Hamilton opening card shops. The next thing — that's awesome. Great for everybody on a big picture. I got my mom and pop shop and I'm doing everything I can. I'm giving a good experience. I'm trying. How do we — even those guys, we're not going away.
Exact question I was about to ask. Exactly.
Here's what I would say and then jump in.
We're going to push you to be better. And by the way, if you look at Dick's stores, they look better. Our guy said today that runs the hobby shop business, he said, 'This would be a tier one hobby shop. This is only the second iteration.' Okay? How do Brady's stores look? How do Lewis's stores look? How do Cards HQ look? How does — how do Collectibles look? How does Burbank look? Like we like these bigger and better stores. If you say, 'Hey, my stores need to be the same. I'm not changing. It's going to be the same.' Guess what? You may get left behind.
But what if we say, 'Hey, I don't want to be 10 franchises. My experience is great here at my hobby store.'
Okay, keep investing in that store. Make it better. I think it's going to look better.
Do like — be like — by the way, there's room for hundreds, many hundreds of individual hobby shops that have one store. But it better look different than it did 30 years ago.
And I'm good. Like I think it has to improve, but like I would even like RLC.
I would tell you to tell us, 'What are you going to do to make your hobby shop better? What are you going to do to get more people...'
By the way, I think it's harder when you have multiple stores to keep the experience at a high level.
Right? Look at Burbank Sports Cards in LA. Okay, one of the best stores in the world.
Right? That store, tier one store. Look at Cards HQ, one of the best stores. Oh, and now they're going to open more stores, but right now it's one store for a while, right? And that's the experience there, the community that they've built is special.
Can I just point out something that because you go to like a Target or Walmart, you buy product and it's the exact same price because it's retail price. They have to price it at that. But you don't have that at a hobby shop, by the way.
Because we don't let them.
Because we worry about making sure that there's great entry-level product the customer goes to Walmart to get. By the way, in other places people try to raise those prices, we said, 'Hey, you have to sell it at MSRP. You cannot go above. You cannot gouge customers. We will not allow people to gouge customers.'
Which is a fantastic thing that you've done. The thing is if you go to a hobby shop that is multiple franchises, there's going to be a lot of overhead because they're continually trying to keep up with the Joneses and make their shop better, which makes sense. So, they have to price their product accordingly. And it's much, much harder to bring that price down from there. And that I think is where the customer experience could be affected. And I know that's very important for you guys because if I go to my local shop where the guy is one guy, he has his mom working there and there's just a few other guys locally that work there, he has a little more wiggle room to maybe affect some of those prices over time, bring it down, and make it a more affordable thing. And my concern is the more we go into a corporatization of hobby shops, even though it does make the user experience overall better, it may make the overall pricing purchasing part of that less advantageous.
We will not let that happen. Look, we — it — entry-level pricing for us needs to stay entry-level pricing. We don't want to see marked-up value boxes, marked-up blaster boxes. It does not work. No. Look, should a box of Dynasty be market-based pricing? Sure. Okay, I think everyone knows that's the deal. Should a value box of Chrome be market-based pricing? No, it shouldn't. Right? And so, we're working hard to make sure that's the case. Look, we don't have complete control over that, but we're using our influence to make sure that that's the case.
But the best example would be like Carnaval by Brady, okay? Keep me honest. I think they made the decision — which is their independent decision — they made the decision to say, 'We're only going to sell at MSRP on retail price. We're not going to go above.' Many of the independents are saying we're going to go above and get as much as they can for it. So, I'd say, you know, look, in no way should we pretend we control price, but what we do control is allocation.
So, you see that you can affect allocation.
Yeah, look, we want to make sure — if we know that Card Vault by Grading is going to sell stuff at MSRP —
Because we don't control pricing.
But they're not going to sell it above that, they're going to get a higher allocation. They're going to get a higher allocation.
So, you think we — we think that's —
So, that's a good thing and we care about it, by the way. If somebody who has one store is doing a great job and that store looks great, comes in and says, 'We're going to make sure to treat the customers really well. We're going to treat them right.' We have — I think if you look at our tier one stores, I think it's 150 they said when they're tier one. Most of those are individual mom and pop sellers. The people that have invested in the stores.
And we're not like, 'Oh, wait, we're going to do digital presentation, educating people, getting people to learn how to be into the hobby.' I mean, we go to so many stores — like in a hobby store, you know, multiple times a week, every week. I'm going to hobby stores multiple times a month. So, like we're in it to say how do we make everything better? I think we all need to have the mentality status quo is not good enough. We need to make better products, we need better marketing, we need better stores, we need better breakers, and we need to keep bringing back our stuff.
And what it boils down to, a lot of it is a very simple philosophy. We don't want to look at collectors as transactions. We want to look at it as a relationship. And the relationship with the collector over a long period of time is important. And it's what you talked about before, right? You're worried about next week or next month or next year. Well, if you have a long-term oriented approach around this and you do things the right way, you're maximizing the probability of success over the long term.
Last thing I got to push on it. We've talked about this before. I think it was one of the only times Mike has called me is when I made a video. Topps Chrome basketball came out, it was smoking high. I was like, 'This sucks. Like, how do we get this price down cheaper?' You called me like an hour after the video dropped. He was like, 'Hey, I forget the exact numbers, but for round numbers, we sold it to you guys at 500. Now it's 1,000. What are we — and the rebuy is now 800. What are we supposed to do?' I hate criticism like this because I don't have the answer, but how do we do that? I love value boxes are valuable. Like, they're cheap entry. That's perfect. But how do we make some hobby SKUs also entry? How do we affect that?
Look, we — we — we saw the thing that we experimented where we cut the seal on the mega boxes.
I don't think it's the end of it. It raised that.
We learned a lot from that.
