It sure looks like it.

The mainstream media is terrible at covering lawsuits, and this one is no exception. Attention should be paid, however. The allegations are serious, and particularly ominous for professional sports, which are all in a perilous state right now thanks to their greedy negligence allowing gambling to taint their credibility. The law suit, which has mountains of evidence to support it, alleges a conspiracy among Fanatics Inc., the National Football League and TikTok “to monopolize the sports memorabilia market, suppress competition, and destroy small business sellers.” The specific allegations are:

1. Violation of Sherman Act §1 (Conspiracy in Restraint of Trade) 
2. Violation of Sherman Act §2 (Monopolization / Attempted Monopolization) 
3. Violation of Clayton Act §3 (Exclusive Dealing) 
4. Violation of California Cartwright Act 
5. Violation of California Unfair Competition Law (Bus. & Prof. Code §17200) 
6. Tortious Interference with Contractual Relations 
7. Tortious Interference with Prospective Economic Advantage 
8. False Advertising and Unfair Competition (Lanham Act §43(a)) 
9. Common Law Unfair Competition 
10. Breach of Covenant of Good Faith & Fair Dealing 

The victims of the conspiracy are passionate NFL fans, collectors, and families who began lucrative businesss selling NFL souvenir items only to be threatened and blocked, costing them dearly.

If you aren’t a sports memorabilia collector, you may be unaware of the extent to which a company called Fanatics dominates the business. One reason for this is that the part of the memorabilia business at issue exploded in activity and profits fairly recently. During the stupid pandemic lockdown, small business entrepreneurs calling themselves “breakers” devised a new approach to sports memorabilia and collectables marketing by livestreaming so-called “box breaks” on TikTok, eBay and other platforms. The result was billions in secondary-market sales and thousands of everyday Americans profiting while retired professional athletes had income from participating in autograph signings and memorabilia events. 

All was well, and everyone profited, until 2021, when Fanatics, backed by equity funding from Silver Lake Technology Management and with the cooperation of the NFL and other sports leagues, decided to monopolize the collectibles and memorabilia industry. Fanatics acquired exclusive licensing rights from the major sports leagues and players’ associations, purchased the iconic trading card manufacturer Topps, and launched new brands such as Under Wraps. The scheme was to take the autograph and memorabilia markets away from independent dealers and breakers, fixing the profits while freezing the small business memorabilia traders out.

Fanatics began consolidating control of digital sales channels by leveraging its relationships with league owners, Silver Lake, and key technology partners to perfect its own live-commerce platform, Fanatics Live. New rules restricted distribution and sales of NFL collectibles by hobby shops and breakers, cutting off supply to independent dealers while imposing unfair contractual conditions on anyone seeking to continue operations. 

TikTok then acted in concert with Fanatics and the NFL to suppress and ban the breakers from selling any memorabilia on the TikTok platform that competed with the Fanatics product. This enabled TikTok to become the major online player in the $40-billion-plus global sports collectibles market just as it was seeking to increase its value in anticipation of the looming future sale of the platform to an American owner.

Even though the breakers were legally selling merchandise that they had purchased, Tik-Tok removed  thousands of legitimate small businesses from its platform using the bogus claim that sales of their items, like autographed NFL helmets, constituted a trademark breach. This is legal nonsense, but lawyers, sounding official and scary, sent threatening letters to the small business owners.

[Aside: I regard this conduct by lawyers as unethical, though it is common and effective. The lawsuit is the result on one breaker with sufficient knowledge of the law saying, “Hey, wait a minute! If I buy something I can sell it! This is extortion and a scam!”]

TikTok’s purge of the small memorabilia dealers wiped out years of earned good will, algorithmic priority, and consumer trust, as well as crushing key income sources for former NFL players and other professional athletes who once benefited from independent autograph signings and memorabilia appearances. Fanatics’ scheme was to assert “exclusive” licensing and house-brand programs, taking the ex-athletes out of the business along with the small dealers, who were suddenly stuck with inventory they could not sell.

Michael Rubin, Fanatics’ CEO, appears to be the evil genius behind the NFL’s assault on its own fans. Joseph Smith, a Los Angeles-based breaker who lost millions of dollars as a result of the conspiracy, in the official plaintiff, but he is just the first of many harmed breakers who will be joining the lawsuit eventually.

The NFL is also just the first of the major sports leagues in the crosshairs. The National Basketball Association, Major League Baseball and others are also involved. For Major League Baseball, currently reeling from a gambling scandal and the likelihood of a player strike after the coming season, and the NFL, in the process of sticking a thumb in the eyes of its fans with the Bad Bunny Super Bowl show, their unmasking as predatory businesses willing to sell out their loyal fans comes at a particularly inopportune time. Our professional sports leagues have always been guided by money interests less concerned with sports than profits, but the Fanatics power grab is a particularly ugly and ruthless example of what they are willing to do to regular, trusting, sports-loving Americans if the price is right.

Ethics Alarms will follow this story: I am advising some of the victims. But you should follow it too.