Friday, January 9, 2009

The Business of Sports Cards

Will here, I know it's been far too long since I posted something on SCU, but I'm still here, and still happy to be a part of Gellman's fantastic blog.

Something that I've been fascinated with for a long, long time is the actual business of trading cards. Now I'm not so interested in the retail end of the hobby, since it's patently obvious to me that a good majority of card shop owners have absolutely no business acumen and are doomed to failure from the start (don't feel bad, I feel the same way about comic book store owners). No, what I'm more interested in would be the behind the scenes activity at the companies that provide fodder for our hobby, which these days is Topps, Upper Deck and Donruss. Sure there ARE other companies producing trading cards: Razor is a new fish in the pond, Press Pass has been around for a LONG time it seems, and In The Game still has it's niche in the marketplace. But since those three companies are nowhere near as large as the "big two/three" their impact on the hobby is minimal at best (though it can be argued that Razor is impacting a lot more than the other two).

There's a new card blogger out there that I was alerted to this morning by the wonderful Chris Harris which will hopefully fulfill my need for inside information straight from the hobby producers, it's called The Sports Card File and it's written by Steve Judd, a former Beckett employee, and most recently a brand manager at Upper Deck. Judd has left the business, but decided to produce a blog explaining all the arcane and maddening decisions made by our favorite card manufacturers.

You should give it a read, because it explains a TON about the state of our hobby today. The simple fact that our rapidly crumbling economy is destroying our hobby isn't what's salient, because the hobby has been crumbling for far longer than the economy has been failing. No, what's more interesting is WHY the hobby has been crumbling, and how it got to where it is today.

Also he fills in the blanks as to why things are the way they are in the hobby. For example, I had NO IDEA that Albert Pujols charges card companies $200 PER SIGNATURE. That makes cards like this one, which sold recently on eBay for $175 a STEAL when you consider that it cost Upper Deck just a bit more than $200 to even MAKE the card in the first place.

When you have one player who charges that much for signatures, if you want to include him in a set you HAVE to fill the rest of the set up with players who don't charge quite that much, in retail that's called a "loss-leader". This explains why even in a super-high end product with one autograph per pack you will get crappy hits.

Further Steve fills us in one some of the pecularities of the contracts between MLB, the MLBPA and the card companies themselves. For example, the 20% rule makes sense from the standpoint of the MLBPA, but not the MLB or the card companies. What is this rule? Well, in any set licensed by the MLBPA the set checklist cannot consist of more than 20% retired players (except in parallels, which I don't quite understand to be honest). So if you have a 100 player set, only 20 of those players represented can be retired. Effectively this kills the market for a retro ONLY set from Topps and Upper Deck, but opens the door for Donruss to kill the marketplace with their non-licensed products. Interesting isn't it?

The axiom that less is more certainly fits well in the card industry today. Instead of a handful of products that are truly stellar, both Topps and Upper Deck have, in recent years, flooded the market with mediocre product, hoping that some gimmick will come along and rejuvenate the industry. Of course, this is the paradigm that's worked for them for quite a long time when you think about it. In my lifetime I've seen so many new paradigms in sports card collecting that I'm not sure I can recount them all. First the sole monopoly on Baseball cards was broken by Fleer and Donruss in the 80's, and Score and Upper Deck later. Then we had holograms, foil cards, high end brands, parallels, autographs, relics, serial numbers and relics. Each one of those innovations captured the market for a time as collectors scrambled to get the latest and greatest gimmick cards. Instead of focusing on the core values of the industry, namely great photos, representative player selections, ease of collectibility, and a "fun factor" card companies pander to the lowest common denominator, so much so that opening up a pack of cards is now legitimately gambling (real money in Topps Rip Cards? WTF?).

What we're left with is a bloated hobby that is rapidly losing collectors and fans alike. Even though 21st Century Technology is producing cards, the basic concept is still 19th Century. Sometimes I think that the card companies need to be reminded of that, and also that their product is by no means a MUST HAVE for anyone, regardless of the hype. The only autographs that should be truly collectible are the ones from people who are DEAD, i.e. you can't get them anymore. Or from guys who charge $200 per autograph.

I hate to bring up the dreaded "C" word, but contraction is necessary at this point, and I'm not the first person to bring this up. Fortunately Upper Deck seems to be obliging by killing more than a couple brands for 2009. Unfortunately, so far the two brands that have been announced as not coming back are two of the more POPULAR brands with collectors, the all-painted Masterpieces and the very cool idea Sweet Spot. So while they are moving in the right direction, why not axe Spectrum, X, First Edition, Timelines, Documentary or any of the other myriad of choices they had at hand. I'm sure that Masterpieces' demise has something to do with the 20% rule, since at this point, how many current MLBers even DESERVE to be on a Masterpiece card?

The card market in 2009 is going to be an interesting one to watch, because as the economy undoubtedly will improve (hey it has to right, if we're at just about rock bottom now, can it get much worse?) will the hobby industry roll along with the economy, or will the same boneheaded ideas continue to fester and piss off collectors? Either way, I know I'll be following Scott Judd over at The Sports Card File, and maybe you should too.

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