A Southern District of New York judge on Monday ruled that not only will Fanatics’ and Panini’s lawsuits against each other over pro leagues’ exclusive licenses continue, but they’ll remain separate cases, too.
Chief U.S. District Judge Laura Taylor Swain partially denied and partially granted motions to dismiss filed by each company against the other. Swain is permitting both sides 21 days to refile their complaints to address deficiencies in the claims she dismissed, meaning each will get a chance to restore the tossed claims.
Regardless, Swain advancing some of two companies’ claims past motions to dismiss on Monday means their cases will enter pretrial discovery. That means each company’s executives will have to provide sworn testimony and share sensitive emails and other documents. If either side was banking on a swift resolution in its favor, the judge’s rulings on Monday put an end to that possibility.
As Sportico detailed in 2023, Panini started the legal war by suing Fanatics for alleged antitrust violations. Fanatics responded four days later by suing Panini for unfair competition, tortious interference and breach of good faith.
The center of the dispute involves shifts in the market for trading cards and how Fanatics obtained related licenses to expand its trading card division.
Four years ago, Fanatics announced it had obtained long-term exclusive licenses from the NBA, NBPA, MLB, MLBPA, the NFL and the NFLPA. Those licenses take effect this year or next year and have been held by Panini or Topps, the latter of which Fanatics acquired along with access to MLB licenses in 2022 for $500 million. Many of those new trading card partners are longtime partners of Michael Rubin’s company in other areas, like apparel, and some are even Fanatics investors.
Starting in 2026, Swain noted, Fanatics will possess what could be construed as dominant control of the relevant market for at least 10 years. This degree of control, Panini maintains, violates antitrust law and will harm consumers—a contention Fanatics disputes.
Fanatics’ trading cards unit did $1.6 billion in revenue last year, Sportico previously reported, which was nearly 20% of the company’s overall sales. It is the highest margin business unit for Fanatics, which also does apparel/merchandise and sports betting.
Though its U.S. market share is dropping quite significantly, Panini has continued to sign deals in North America, including a partnership with LIV Golf and some prominent college football and basketball players.
In court filings, Fanatics maintains that Panini lacks standing to proceed with its antitrust arguments. Standing means a party has suffered actual, concrete injury that money damages or an injunction can repair. Swain mostly disagreed. She wrote that Panini has “adequately pleaded facts” that support an argument Fanatics enjoys “monopoly power” through “its ability to set prices and exclude competitors.”
For example, the judge noted, Panini claims Fanatics has used “threats” to set minimum price requirements, require retailers to “carry only Fanatics’ trading card lines,” and “lock up rookie players.” Whether any of these alleged actions violates antitrust law is undetermined at this point—the merits of the claims will be sorted out in pretrial discovery and, barring a settlement, a trial. But Swain found the argument sufficiently plausible at this stage.
Swain also highlighted how Panini claims it has suffered a loss of business opportunities and sales, as well as “exclusion from the market” because of what Panini claims is “Fanatics’ anticompetitive, coercive acts.” The merits of that argument remain to be seen, but for purposes of establishing standing, Swain found it more than acceptable. “A competitor’s exclusion from the market is a quintessential example of antitrust injury that the Sherman Act was designed to prevent,” the judge wrote.
Yet Swain was more critical of other claims brought by Panini. She dismissed Panini’s contention that it was injured in a way in which the law ought to remedy when Fanatics acquired Topps. While Panini maintains the acquisition harmed competition in the market, the judge reasoned the company failed to sufficiently explain how.
“To the contrary,” Swain wrote, “as one of the two remaining competitors in the field, Panini benefitted from the alleged market concentration as a prevailing duopolist with ‘the opportunity and incentive’ to increase prices.”
Swain also dismissed part of Panini’s claim for tortious interference with a contract. She concluded that Panini “has not alleged any breach of its agreements” with the NFL, NBA and NBPA and therefore hasn’t explained how wrongful interference would have occurred.
Turning to Fanatics v. Panini, Swain likewise issued a mixed ruling that renders neither side a winner or loser. For instance, she dismissed Fanatics’ claim for unfair competition. Fanatics portrays Panini as deploying “the sham prospect of a deal” to undermine Fanatics’ efforts to land other contracts. Fanatics maintains it expended time, effort and money on account of Panini’s actions. But Swain stressed that Fanatics alleging that “Panini merely cost Fanatics an exclusive advantage” falls short for an unfair competition claim since it doesn’t show “any direct commercial benefit for Panini.”
On the other hand, Swain denied Panini’s motion to dismiss Fanatics’ claim for tortious interference. Fanatics accuses Panini of undermining prospective business relationships with Panini employees whom Fanatics tried to hire. Fanatics argues that it tried to hire Panini employees in 2023 but, as summarized by Swain, “Panini wrongfully threatened its employees with meritless litigation if they left to join Fanatics.” Swain found the claim sufficient to advance into pretrial discovery.
“Fanatics,” the judge wrote, “has identified the targeted group of individuals with whom Fanatics had the opportunity and sought to form business relationships (the remaining Panini employees), an allegedly wrongful act committed by Panini targeting that group (the threats of litigation), and a resulting change in Fanatics’ ability to recruit those employees.”
Swain also rejected Panini’s request that the two cases be consolidated into one case. She reasoned that though the two cases involve claims that feature overlapping factual backgrounds and subject matters, the claims nonetheless “arise from a separate nucleus of core events.”
As the judge explained, while Panini’s case centers on portraying Fanatics as violating antitrust law, Fanatics’ case focuses on how Panini allegedly undermined its business relations in unlawful ways. The risk of bringing the two cases together, the judge wrote, could lead to unnecessarily prejudicing one party or the other. While two separate cases could mean the two companies pay more in legal fees and take up a bit more of the court docket, Swain wrote that litigation activities can be coordinated to address those types of concerns.
In a statement, Fanatics said it was “pleased” by Swain’s ruling to allow its case “to move forward.” The company says it is eager to present “actual evidence” that it believes will prove its case. As it has throughout the litigation, Fanatics contends Panini is using litigation “as a tool” for slowing down Fanatics.
