Thursday, February 18, 2010

Forbes: Panini Ready To Gamble

Since getting the exclusive license to make NBA basketball cards, Panini has produced sets that have some collectors wanting more. Their entire product line is filled with mid-priced boxes, that don't have any eye popping hits. No crazy cut autographs. Nothing that pushes the limit of what has been done before.

A recent article from Forbes might shed some light as to why Panini has been so conservative with their basketball line. Panini has set aside $10 Million for its basketball venture. So where does all that money go? For one, having Kobe Bryant as your pitch man doesn't come cheap. Love him or hate him, he is one of the most recognizable faces in the world. The details of the contract with Kobe are not known, but Forbes did slip in a little insight:

The company signed up superstar Kobe Bryant as its front man, agreeing to pay him seven figures annually for appearances, and autograph sessions.

Alright. So Kobe costs them a nice chunk, at least 10% of the NBA budget. I don't mind that so much. LeBron said something funny at the Olympics back in 2008. Something like, "I thought I was famous until I got here with Kobe."  Getting Kobe Bryant to pitch your basketball product is a good idea, even if it costs you 10-15% of your budget.

Here is where Panini is ready to gamble it up. They are "sinking $2.5 million of its $10 million NBA investment into the launch of an interactive card game it's calling Adrenalyn." Here we go again. Another card company thinking they can get kids to drop their PS3 controller, their IPOD, their cell phone, etc...... to go play a game with basketball cards online. Call me a skeptic, I see this as $2.5 million down the drain.

I would have spent the $2.5 million to wow the collectors Panini inherited. The hundreds of thousands of basketball collectors, that have been forced to sit through mid-range product, after mid-priced product since October. Panini drops at least $1M on Kobe, $2.5M on Adrenalyn, and suddenly a big part of the $10 Million budget is wiped away. Die hard basketball collectors, or even those who only buy a few packs or boxes a year, get left out in the cold because that money doesn't get them anything. The older collectors, and this is just a wild guess, aren't going to play Adrenalyn or want anything to do with the .99 cent packs.

Getting more kids involved in the hobby, in any sport, would be a great thing. Panini should make strides in that effort. What I have to question is going so bold in year one with the kids push. Panini is taking the risk of freezing out older collectors because the sets they've put out leave a lot to be desired. If it were me, I would have tried to "wow" the fan base I already had, and then work on bringing some new collectors along in year two.

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