Yesterday, I wrote a piece about the NBA's exclusive trading card deal with Italian company Panini.
Given the fact that the Panini name seemed to come out of nowhere, I thought it would be good to talk to Sal LaRocca, the league's executive vice president of global merchandising, To get a better understanding of what drove the league to forge this deal.
Darren: I mentioned yesterday that part of the problem in today's trading card industry is the glut of cards being produced. Let's start with how much is actually being produced.
LaRocca:Two years ago, when we had three licensees, we had 43 different product releases. We have 20 this year and our goal is to be down to about 12 next year.
Darren: Even by doing that, do you believe that this could help boost value, which seems to be the issue?
LaRocca:We're focused on the primary market, not the secondary one. All we know is that the feedback we were getting was that so many products were coming out, that each company was trying to beat each other to the marketplace, and it was impossible to sell through and there were more returns. Everyone knew the model was broken and that the current structure wasn't working so exclusivity provided us the opportunity to change that model.
Darren: What can this deal do for the industry?
LaRocca: What we know is that exclusivity is the right deal for us.
Darren: How much will lack of brand power in the U.S. hurt Panini?
LaRocca: Who made the Honus Wagner card? Most people don't know that, but it's the most valuable card out there. Who made the first Michael Jordan rookie? Fleer, a company that doesn't exist anymore. Panini is a great partner, a $1 billion company, but brand name, in the beginning, doesn't matter. Quality is important. And with Panini, there will be excitement like we haven't seen in a long time. it will be a new set of firsts for everything.
Darren: What's going to happen with Upper Deck's memorabilia deals with some of the league's biggest stars?
LaRocca:We're working this out as we speak.
Darren: How is Panini helping to make this deal valuable?
LaRocca: They are making investments at the hobby retail level, something that our previous partners couldn't do in the past because non-exclusive companies weren't necessarily convinced that this type of advertising was helping just them and therefore was worth it.
Darren: How do you think people are judging this deal?
LaRocca: I think we should be applauded. Instead of running around on the treadmill, and doing the same thing over and over again, we have a different point of view. But I want to make clear that we are doing this because this is best for our business.
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