The $1.16 billion deal to take Topps public through a merger with a SPAC has collapsed after Major League Baseball decided to end its 70-year relationship with the trading-card company.

A day after MLB notified Topps it would be not be renewing their licensing agreement when it expires in 2025, the SPAC, Mudrick Capital Acquisition Corp. II, announced Friday that the merger had been “terminated by mutual agreement” because of MLB’s decision.

MLB and the Major League Baseball Players Association, whose deal with Topps expires next year, have both reached new licensing contracts with online sports-merchandise retailer Fanatics Inc., according to The Wall Street Journal.

“The MLB and MLBPA deals make up a significant chunk of Topps’s revenue, and their exits are expected to decrease the value of the company” and there are “significant questions about how this business, which used baseball cards to fortify an empire, will chart a path forward without those same rights,” the Journal said.

Topps, which was founded in 1938, has partnered with MLB on baseball cards since 1952. It is now owned by Tornante Co. — led by former Disney CEO Michael Eisner — and private-equity firm Madison Dearborn Partners, who bought it in 2007 for $385 million.

In April, the company announced the SPAC merger, which valued the combined entity at about $1.16 billion. With the collapse of the deal, it will stay private.

More than 70% of Topps’s revenue in its latest quarter came from its sports and entertainment segment, with its candy business contributing the remaining portion. In addition to baseball cards, it also makes soccer and hockey merchandise.

“Not only were we unaware that Major League Baseball was negotiating with anybody other than Topps regarding our rights beyond 2025, but we were abruptly informed yesterday at 2:00 p.m. ET … that a deal was completed, finalized, and exclusive with Fanatics,” Andy Redman, executive chairman of Topps, told the Journal.

But the Journal reported that ”The idea that Topps could seek to go public through a SPAC without further locking up its primary revenue stream shocked deal-makers and people in the private-equity world.”

Justin Sullivan via Getty Images

baseball cards, Fanatics, licensing, Major League Baseball, SPAC, Topps



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