Fanatics Drops Another Bomb With Takeover Of PWCC
Since entering the hobby space with a bang in August 2021, Fanatics has been quite aggressive in purchasing companies as part of a bid to become the most significant player in this lucrative space.
Just a few days ago, the sports apparel giant announced a buyout of PointsBet U.S. in an effort to break the duopoly in online betting. But we know Fanatics too well to think that things will end there. Now they have bought out PWCC, an Oregon-based company specializing in auctions and known for their successful vault services.
However, PWCC is also well known throughout the hobby for a well well-publicized series of misdeeds. What does this all mean? Find out through our coverage of the Fanatics Takeover Of PWCC.
News Of The Fanatics Takeover Of PWCC
Fanatics has confirmed to Cardlines that it completed the PWCC purchase in May 2023.
The sports apparel giant provided us with a press release, including the following statement:
“The acquisition of PWCC Marketplace is a strategic, long-term decision for Fanatics Collectibles that will allow us to enhance further and support the broader collector ecosystem.
Our top priority is to maintain the health of the overall industry and, most importantly, protect and enhance the collector experience.”
Michelle Neumayr, the Fanatics Senior Manager for Public Relations, has also confirmed to us that “As part of this acquisition, we will be bringing on all of PWCC’s 125 employees to Fanatics Collectibles.” So, in that regard, it will be business as usual for PWCC, at least for now.
However, we would be amazed if Fanatics did not change the company’s name at some point in the future. PWCC is not necessarily a brand name worth keeping in terms of its name recognition.
In addition, it has been besmirched by multiple scandals, as we will discuss below. Michael Rubin may wish to put some distance between Fanatics and the history of this Oregon-based company.
How much did Fanatics spend on PWCC?
We don’t know the exact sum of the sale. But according to a source familiar with the deal, it was executed at a meager price. This will surprise no one since PWCC has been in serious trouble for a while now.
In April, the company fired one-quarter of its workforce, a total of 30 workers. Reportedly, none of those fired received any severance pay. That is both an indication of the ethically challenged practices of PWCC and a sign of their financially troubled position.
In an internal statement, PWCC assured their remaining employees that the move was designed to “restructure and streamline PWCC into increasingly efficient, technical, and data-driven departments.”
But many of their workers were understandably not feeling reassured. However, Fanatics’s company purchase will provide a much-needed cash infusion for PWCC.
While PWCC was in financial trouble, that doesn’t mean Rubin got to name his price. According to sources, Collectors Universe and at least one potential buyer were in the mix to purchase the vaulting and auctions company.
Indeed, Collectors Universe may have been pretty close to making a deal. Therefore, the price was probably not optimal from the perspective of Fanatics.
What does PWCC bring to the table?
PWCC has a reasonably successful auction platform. But it is best known in the hobby for its vault, which was a pioneer in the field and may be the most popular service of its kind.
Before this deal, Fanatics had no serious platform to sell cards. Of course, you can buy singles on their website if you insist. But that is not a serious marketplace. The addition of PWCC certainly changes that. Fanatics will now be able to produce the cards, sell you wax, and sell you singles, all through platforms they own.
“PWCC has built a strong business with incredible technology and a leading marketplace and vault. We see a huge opportunity to bring the PWCC platform into the Fanatics Collectibles family and further build and strengthen the foundation that currently exists.
Similar to other acquisitions, Fanatics is always looking to find pieces of an ecosystem to better the fan and collector experience. This latest acquisition is a good example of this, as PWCC is a cornerstone of the collector ecosystem and integral to the hobby.
Fanatics Collectibles will build upon the strong foundation that exists today, further elevate the business and bring it to the next level in service of collectors.
Our vision for Fanatics Collectibles is to elevate the collector offering and experience and ensure that everything we do is with the highest integrity. That’s also why we do long-term deals – it affords us the luxury of thinking long-term and making decisions based on what’s best for collectors.”
The PWCC vaulting service
The PWCC company was the hobby’s most popular and successful vaulting service for quite a while. However, that status was notably threatened when eBay opened its vault in late 2022. Still, PWCC has many loyal customers who take advantage of its services.
The PWCC vault provides a secure location for your high-end cards. But they have paired this advantage with admirable asset liquidity. Once you put your cards in the PWCC vault, they are available for sale on their auction platform.
The Oregon-based company has long been known for the high-quality and accurate photographs of all the cards public through PWCC auctions.
They offer a wide array of auctions, including:
- Weekly Sunday Auctions
- Monthly Premier Auctions
- Wax Wednesday Auctions
- Fixed Price Marketplace.
They even offer lending based on the collateral of your card collection through their PWCC Capital service.
Since PWCC has been around for over twenty years, they have amassed much experience. They provide a sophisticated customer-friendly interface and fair pricing. They both look great and are easy to navigate. The prices are also reasonable, and for insured peace of mind with card storage, most collectors are willing to pay what it takes – especially for their high-end cards.
The shill bidding scandal
While PWCC brings a lot of advantages to the table, they also have a history of alleged misdeeds. Perhaps the most high profile of these were accusations that PWCC regularly engaged in shill bidding as a way to drive up the overall value of the auctions taking place on their platform.
On August 17th, 2021, eBay announced that it banned sales from the Oregon-based company on its platform. The news shook up the hobby since, back then, PWCC usually had the top listing for any card you looked for. As a result, they had a more prominent position than either COMC or Probstein enjoy on eBay today.
At the time, eBay released the following statement:
“Recently, it was determined that individuals associated with a trading card seller, PWCC, have engaged in “shill bidding,” which eBay prohibits. As a result, eBay has restricted PWCC’s selling privileges and listings, effective today. eBay’s policies and standards were designed to ensure a trusted marketplace where our community can confidently transact. If we determine that a buyer or seller is not acting in good faith, eBay takes this seriously and takes action. Our customer service team will work directly with anyone who has a question about a recent PWCC transaction.”
This writer (yeah, me) summarized this scandal by saying, “PWCC has been involved in too many shady dealings. They are not a well-meaning actor in the hobby.”
I stand behind that statement. Unfortunately, PWCC never took responsibility for those actions. Sure, Fanatics is now under new management. But as they told Cardlines, Fanatics intends to keep all 125 PWCC employees on staff.
Altered cards in PSA holders
The shill bidding scam was terrible enough, but it is by no means the only mark against PWCC. Starting in April 2019, customers began to notice a large amount of clearly altered cards in PSA holders.
This aroused a good deal of curiosity since, according to the PSA website, authentication means “A series of PSA graders review your cards for authenticity. If genuine, PSA looks for evidence of doctoring, such as re-coloring or trimming.”
Many of these cards were sold on the PWCC auction platform for inflated prices. PWCC CEO Brent Huigens seemed to admit that he had allowed trimmed cards on his platform. In addition, he claimed that these cards had not been trimmed but instead had been “conserved.” You can see for yourself in the interview linked below.
Will Fanatics be a good ethical influence On PWCC?
Fanatics representatives preferred not to comment directly when asked to comment on the ethical questions surrounding PWCC. However, they did have some general statements, generally alluding to the situation. According to a statement provided to Cardlines by Fanatics:
“Our vision for Fanatics Collectibles is to elevate the collector offering and experience and ensure that everything we do is with the highest integrity. That’s also why we do long-term deals – it affords us the luxury of thinking long-term and making decisions based on what’s best for collectors.
As part of this acquisition, we will be bringing on all of PWCC’s 125 employees to Fanatics Collectibles. Therefore, we must take the time to properly evaluate the business, best practices, and compliance.
Long-term health is vital for our business and the ecosystem at large, which is why we’re going to thoughtfully integrate the PWCC platform into Fanatics Collectibles. Our top priority is to ensure that we are making the right decisions on behalf of collectors with the highest integrity to continue providing them with the best experience and value.”
Reading between the lines, this statement hints that Fanatics is aware of PWCC’s previous misdeeds and will not allow them to recur. That is my interpretation in any event. It would seem that a company of Fanatics’ size would not want to be tarred with the misdeeds of PWCC.
But we are not entirely reassured. We were disheartened that Fanatics are cooperating with Backyard Breaks despite their long history of misdeeds. It would be better for the hobby if Fanatics did not work with bad actors like Backyard Breaks and PWCC. But if they do, we hope they hold these companies accountable.
What is next for Fanatics?
No one is surprised that Fanatics has moved into the auction space. But, when you look at their portfolio, that element was a glaring gap in their bid to become a self-described “one-stop shop” for sports fans. Now another large, final piece is missing to dominate the hobby. Grading.
PWCC and Beckett are already partners, allowing you to quickly grade your vaulted cards in the veteran grading company. And Beckett is a prime suspect for a future takeover for other reasons. First, they have been unable to recapture their place as the number two grader behind PSA.
Instead, they have seceded that spot to upstart SGC. In addition, a recent poorly planned relaunch of their grading scale has damaged their cause quite a bit. But BGS still offers a familiar and beloved name in collecting. One that could give credibility to a Fanatics moves into the grading space.
And what is more, they would come cheap now, just as PWCC did. So, while a Fanatics move into the grading world would be dramatic, it would not be surprising.
The final word on the Fanatics takeover of PWCC
Fanatics have gone on a purchasing binge in the hobby, continuing with the Fanatics takeover of PWCC. And like any binge, you wake up in the morning, look at who you got into bed with, and figure out what you do with them.
So the question is, can Fanatics take all these disparate parts and create a streamlined and cohesive system? If anyone can, it is Rubin. But it is a very tall order for any company to do, especially when new assets are added at such a rapid pace.
Fanatics’ Takeover Of PWCC really strikes a blow at eBay and their massive presence at the hobby. It is not yet evident how well Fanatics can leverage this, but they will seek to cut eBay’s market share significantly by providing cards directly for auction.
However, the auction space is so competitive that even Fanatics and their megabucks cannot dominate it, at least not in the short term. PSA parent company Collectors Universe now backs Goldin.
Meanwhile, eBay is a giant that transcends the sports card world and has made many moves to establish itself as a hobby colossus. They are somewhat smaller than Fanatics, valued at 23 billion, versus 31 for the sports apparel giant. But far more focused on auctioning cards.
Therefore, it is hard to see how Fanatics dominates the auction space through PWCC. Instead, they will likely become a significant player, competing with the other two giants.