S&P pulls positive watch on Topps

S&P said it affirmed and removed Tornante-MDP Joe Holding LLC (Topps)’s B- issuer rating from CreditWatch with positive implications, where it was placed on May 25.

The agency removed the rating from CreditWatch after its subsidiary reported the cancellation of its merger into special-acquisition company Mudrick Capital Acquisition Corp. II.

“We also understand Topps has been notified that its trading card and collectibles contract with Major League Baseball (MLB), which expires in 2025, will not be renewed, and there are credible press reports that the MLB Players Association (MLBPA) struck exclusive new baseball-card deals with Fanatics Inc.,” S&P said in a press release.

The agency said it assigned a negative outlook to reflect the loss of Topps' contract with MLB and the MLBPA and the longer-term risk of weakened cash flow.

“Topps stated that its contracts with MLB and the MLBPA allow it to produce substantially all of its current licensed baseball products through 2025. We assume in our base case that most of the company's sports and entertainment revenue is derived from its sale of baseball trading cards and merchandise. Without the ability to sell baseball cards, we believe cash flow generation in Topps' sports and entertainment business could be substantially impaired over the long term,” S&P said.

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