Filed under: Donruss, MLB, NBA, NFL, Panini | Tags: baseball cards, basketball cards, Donruss, football cards, MLB, NBA, NFL, Panini, Panini buys Donruss, sports business, Sports Cards
Story copyright 2009 Beckett Media
Peter Warsop, Panini’s Group Licensing Director, answered these questions from Beckett Media Publisher Tracy Hackler in the wake of the company finalizing its deal to acquire Arlington, Texas-based Donruss on Friday morning.
Beckett Media: Ultimately, what were some of the most important factors that led Panini to make the acquisition?
Peter Warsop: For Panini this was not a difficult decision at all as it became a natural fit for all concerned. From the very first meeting we had with Donruss Playoff LP, it has taken Panini less than six weeks to make its evaluations and complete the final transaction of acquiring the sports trading card business from them.
We have always understood the fine reputation and strengths of Donruss and this aspect of our knowledge needed no prompting. Importantly, we have had reciprocal visits between the two head offices; Donruss representations came to Modena, Italy, and eight Panini head office directors visited Donruss in Arlington over a four-day period. All this was to satisfy both sides that a Panini acquisition would work well not just for Panini and Donruss, but for all parties, including licensing principals, suppliers, the hobby, the consumers and, not least, the staff and management of Donruss. The outcome to this mutual assessment was overwhelmingly positive.
BM: In your opinion, what is the biggest hurdle that Panini America must clear as it goes about launching its first U.S. sports trading cards?
PW: I would say there is no one particular difficulty. If anything, it is more a question of the hurdle being the multitude of tasks and the time available to scale them. Unfortunately, not everything lies within our own area of responsibility or area of influence, and so I would put that down as the most difficult area we face.
BM: Along those same lines, what is your biggest concern as you set out to write a pivotal chapter in the hobby history book amid such uncertain economic times?
PW: The economy is everyone’s concern and we would be foolish to forecast “business as usual.” The feeling is that it will get worse before it gets better – but get better it will. We would never advocate complacency, but it is not our intention to become completely intimidated by the doom and gloom merchants, either.
After all, there are still signs in many of our markets that collectors will not be put off from their favorite hobbies and their passion for sports. All last week while traveling around the United States, I received positive news from our Italian market where, after the January launch of our annual soccer league collection, they already know that they will achieve their best sales in 18 years – it’s a staggering achievement. In volume terms, this one soccer launch would account for more than the entire U.S. sports card business last year. It leads us to believe things can get better here.
BM: Will you continue to produce brands under the Donruss, Playoff, Leaf and Score names?
PW: These are strong brands that are recognized by many collectors and perhaps with the exception of Leaf, they will continue to be used.
BM: What impact, if any, did the MLB Properties lawsuit have on the acquisition?
PW: Given that Panini is acquiring most of the assets of the Donruss group rather than the company or its liabilities, Panini is not involved in any dispute with Donruss licensors.
BM: Is it Panini’s plan to have existing Donruss staff plan, produce, market and sell Panini’s NBA product line or do you intend to hire a new “basketball team?”
PW: Yes. Panini has its own corporate structure with directors taking responsibility for various key disciplines and they will ensure that present management and staff have all the help and guidance they might need to continue the excellent work they do, along with bringing about some changes perceived to be necessary for the future good of the category.
BM: How will the current day-to-day operations of the Donruss facility be affected in terms of personnel, head count, corporate leadership, etc.?
PW: With a change of ownership there are bound to be some operational changes, and our management and staff are optimistically looking forward to accepting new challenges and bonding with the Panini spirit of business and category development. Panini will announce a new team leader and a CEO has in fact been appointed and will be announced within the next few days.
The four [Donruss] Vice Presidents, Curt Cook; CFO, Bill Sawtelle; Production, Jim Dryden; Operations, and Mike Anderson; Sales & Marketing, will remain in place and, together with their teams, help Panini central management in their quest to invigorate the product category.
We are not aware that present staff have concerns and, to the contrary, would seem to be very happy to become members of the larger international Panini family. We will be assessing where we need to add new colleagues so as to be able to absorb the expected increase in activity and sales.
BM: You’ve made it clear that ironclad authenticity and complete consumer confidence are of the utmost importance not only to Panini, but to the sustained viability of the industry as a whole. In your opinion, how does the industry go about accomplishing something so vital?
PW: We would not want to minimize the problem and we also acknowledge that the industry will need to pull together. But the most important thing is for everyone to shout out load that nothing short of 100 percent transparency is acceptable. The problem cannot be eradicated by manufacturers alone. It will require close cooperation between licensors, player agents, auction houses and certification companies which are all financially impacted and likely to suffer from a reduction in credibility by any erosion of consumer confidence. One thing we can do is to provide some motivation and I believe that is happening now as a consequence of the allegations circulating amongst the community.
BM: As you well know, many consumers loved the Donruss Playoff Major League Baseball-licensed products during a four-year run from 2001-2005, and many consumers were quite upset when they lost their license. Given such a proven history in licensed baseball cards, is attempting to reacquire licenses with MLB and MLBPA a possibility – or even a priority – for Panini America in the near future?
PW: Panini’s plans for the market are well known to the U.S. sport authorities [the leagues and players associations]. We hope that they take account of them and that our plans will be seen as helpful in developing a growing product category when the licensees are deciding their future licensing strategy. Meanwhile, Panini is focused on giving the best possible service to our present licensors.
BM: Panini’s recent agreement with the NBA means that half of the four major North American sports now have exclusive trading card manufacturers. How reasonable is it to think that at some point in the near future, all four major American sports leagues will have exclusive trading card partners?
PW: We are living in changing times so it is difficult to predict. This is certainly not something that is in our own hands and, so like the rest of the community, we await the outcome with interest.
BM: Do you have a feeling for how many manufacturers is too many for an industry that’s been on a gradual decline for quite some time?
PW: Three is certainly too many and two might be under certain conditions, or lack of them.
BM: Are Donruss’ existing licenses and player agreements part of the deal (NFL, NFLPA, etc.)?
PW: We are expecting that the present licenses held will be transferred to Panini America, Inc.
Tracy Hackler can be reached at firstname.lastname@example.org
Stay tuned to The Beckett Blog and Beckett.com for more on this story.
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