MLB Terminates Trading Card Deal, Causes Topps SPAC Merger to Fall

August 24, 2021

On Friday, August 20, a proposed merger between Mudrick Capital Acquisition Company II and Topps was terminated.

Mudrick, a SPAC, sought to merge Topps—perhaps the most well-known trading card company in the United States—with another company, but the deal fell through due to the failure to renew a contract between Topps and Major League Baseball (MLB). Topps will still continue producing MLB trading cards through 2025.

Topps and MLB had a working partnership dating back to 1952, allowing MLB to enjoy trading card royalties and Topps to enjoy the benefits of being the “Official Trading Card” partner of the 30-team league.

MLB Breaks It Off

On Thursday, however, MLB decided to go in a different direction and officially announced its decision to not renew the long-standing relationship. In response, Mudrick decided to kill the SPAC merger, which had originally been proposed in April.

Prior to the end of the company’s relationship with MLB, Topps was valued at about $1.3 billion. The company still has licensing deals with the National Hockey League (NHL), as well a deal with the still-expanding Major League Soccer (MLS).

Don’t Give Up On Topps Just Yet

Despite the disappointing termination, the company leadership remains optimistic. “Topps expects to be able to produce substantially all its current licensed baseball products through 2025, pursuant to its existing agreements, and will build on the exceptional performance in the second quarter of 2021 in its Sports & Entertainment segment, and its Confections segment”, the company claimed in a recent statement.

Topps used to be publicly traded but decided to privatize in 2007. Current chairman, Michael Eisner, stated early this year that a SPAC was the best option for the company to once again go public.

More SPAC Deals Than Ever

As of August 4, there have already been 389 SPACs in 2021, totaling more than $100 billion and significantly outranking any prior year. The SPAC—or special purpose acquisition company—has been a defining force throughout 2021, causing many investors and companies to reevaluate the process of going public.

The collapse of the Topps SPAC serves as a reminder that most of these deals are highly contingent and are by no means guaranteed. SPACs are often referred to as “blank check” companies because they are created prior to acquiring the target investment.

Currently, Topps is owned by Madison Dearborn Partners and the Tornante Company. The company has not yet commented whether it will seek to regenerate a similar deal, even without its highly valued partnership with MLB.

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