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Licensing Decisions Impact All Collectors

By Chris Olds
11/10/2009 7:39:25 PM

If you thought 2009 has been a wild ride, just wait for 2010.

There have been countless changes in the hobby in the last 11 months just with licensing — the rights to create, market and sell official sports cards.

In January, the NBA chose an exclusive licensee in Panini, dropping Topps and Upper Deck. In August, MLB Properties opted for just Topps to create its fully licensed baseball cards, while a new licensee for Minor League Baseball has yet to be announced after TRISTAR’s deal expired. And Upper Deck’s exclusive with the Collegiate Licensing Company? It affects every sport and will dramatically curb companies’ options starting next spring. The latest news on Monday is no different –  Players Inc, the licensing group of the NFL Players Association, dropped Topps as one of its football card makers.

All of these things can impact our hobby — your collection — even if you don’t buy one of the sports that is affected. Why? It affects the industry’s players, the companies that bring the cards to you.

Just like the baseball announcement, there are a lot of disappointed collectors with the Topps football news. And yet at the same time,there also are a lot of questions about whether the longest-running manufacturer of trading cards in the United States will create any type of football products in 2010 and beyond. (It doesn’t appear likely — unless you count its Premier League soccer cards.)

Some collectors took that a step further asking whether Topps can make it on just baseball and MMA alone — but that’s where we need to take a step back. There’s no question that baseball, despite its issues in recent years, remains the top dog of collecting. And MMA is the new kid on the block with Topps’ UFC lines among the most popular releases ever considering original costs vs. current values.

However, Topps has never survived on cards alone.

In 2007, before the company went private, net sales of the company’s entertainment products totaled $38.3 million in the first quarter. In that same period, the company’s confectionary sales (that’s right, candy) totaled $42.7 million — and Ringpops are a lot cheaper to make than baseball cards. (Remember that licensing part? It’s costly — just like getting Alex Rodriguez to sign his name a few hundred times. Those things make candy much more powerful when it comes to the bottom line.)

Many a card-centric collector might be surprised by those numbers.

Yes, times have changed since then. But I’m not sure if the country’s sweet tooth has waned as much as interest might have for increasingly expensive sports cards.

Losing football, a definite No. 2 historically for Topps, will undoubtedly hurt. But, again, Topps isn’t just about baseball or Bazooka Joe — that’s why the company has other branches like eTopps, the ToppsVault, and so on.

Among Topps’ non-sport card offerings, for example, are Club Penguin, SpongeBob, WWE, Garbage Pail Kids, Jonas Brothers, Hannah Montana, iCarly, Star Wars and Terminator. And then there are recent lines like American Heritage and the popular Barack Obama set — both products that are undoubtedly cheaper to produce than your typical sports (and probably even some non-sports) sets.

Other recent offerings from Topps include Indiana Jones, Heroes, Transformers, High School Musical and so on. None of these non-sports properties are licenses to sneeze at — they’ve got appeal with those who have buying power. And ift here’s one thing I’ve learned in my time here at Beckett is that the money in the industry often follows where the kids are. (And, really,weren’t the kids highly involved in baseball cards during the boom days? Same for comic books in the early 1990s.)

It’s no secret that Topps has shown some interest in the NHL license that’s coming up soon. And, of course, resources that had been tabbed for football could come in handy for the MLB products in 2010.(That’s a thought I like.)

One thing all the Topps football fans should consider — or those bemoaning any other companies whose products got the ax — is that there is still plenty of past years’ cards available and a lot of that wax can sometimes be found at a fraction of the original price.

So, while there’s not going to be anything new, one should be able to get that Chrome or Bowman fix. And how does that influence the hobby? Buying old product doesn’t help Topps, but the glut of recent-year wax should start to dry up —making the hot stuff hotter — and perhaps increase interest in some of the previously marginal products as collectors prefer that to what they don’t see on the marketplace. In turn, that should help the hobby’s dealers — who can buy more new products. (And that’s a move that can allow companies to experiment with more new product lines.)

There have been countless other challenges for the card industry in 2009 — some of them being companies closing their doors, others being battles between its own players in courtrooms over rights, ownership, etc. — and one might expect that we’re not done there yet, either.

Either way, though, the changes of 2009 promise to help create an exciting 2010.

Chris Olds is the editor of Beckett Baseball and Beckett Graded Card Investor. Have a comment, question or idea? Send an e-mail to him at colds@beckett.com.

8 member comments.
Posted 11/10/2009 11:22:34 PM
GINGE01
Total Posts: 232
Member Since: 3/23/2000






Licensing Decisions Impact All Collectors
A fair right up, fair commentary. However I'm a long time Topps collector, I spend about 40% of my annual budget on Topps, Topps Chrome, Bowman, Bowman Chrome, Bowman Sterling, Topps Mayo, Topps Magic and Finest. In the past I also collected Topps Draft Picks and Prospects and Topps Total. I am not switching to other products so the industry has lost my revenue, how many other collectors are like me. Can Topps win back their football license for 2011, how much drop in revenue will it take the NFL Players Inc to see that they made a huge mistake. Time will tell
x
Posted 11/10/2009 11:56:11 PM
HeritageKing
Total Posts: 204
Member Since: 9/3/1999






Licensing Decisions Impact All Collectors
The real question should becan hobby shops survive without topps football? I mean come on, there are many shops out there where most of their business is football. Topps is a MAJOR player in that sport. Collectors are sick of Upper Deck, their poor ideas, poor quality, lack of customer service, and redemptions. Panini hasn't proved anything yet and if 2009 is any indicator, they are just riding playoff's coat tails, devoid of any real new ideas.This move deeply threatens the hobby as a whole, you or anyone at beckett might not want to say that, but the last thing this hobby needs is less competition. Collectors want better products and they want to know that the card companies are motivated to bring that to them. Taking out topps, who delivers quality football products year after year, is just a poor move not only for football collectors, but for the hobby in general. Card stores are hanging on by a thread, the rely on quality products to bring in customers, having to buy 20 boxes of spectrum or prestige football and only selling 1 or 2 boxes of it because it is poor, is going to kill them all.This is a poor move by the NFL, they obviously were steered by people who don't understand the current state of the hobby. If I was beckett, and my job was 100% tied to the success of this hobby, I would be making a much bigger deal about this move than what I have seen so far!Kevin

Posted 11/11/2009 6:31:55 AM
hometownhero
Total Posts: 45
Member Since: 6/27/2002






Licensing Decisions Impact All Collectors
ALL IS NOT WELL, YOU CAN LOOK TO HOPE AND PROMISES, BUT WITHOUT TRUE COMPEDITIVENESS CARD SHOPS WILL FALL, PEOPLE WILL EITHER BUY THIS NEW AVENUE OR NOT, I THINK THERE IS MORE TO THIS, MAYBE IT'S THE ECONOMY, MAYBE IT WAS BROUGHT ON BY GREED, OR MAYBE THEY JUST LOST OUR INTEREST, MAYBE THERE'S JUST NOTHING MORE, THAT CAN BE DONE. THE TURN AROUND, FROM BEING A HOBBY TO A BUSINESS HAS POSSIBLE KILLED THIS ONCE FUN PAST TIME. MAN I HOPE I'M WRONG, I LOVE GOING TO THE CARD SHOP. TALKING AND REMINISING ABOUT PAST AND PRESENT SPORT'S STORIES, BREAKING OPEN PACKS AND BOXES, "LOOKING AT YOUR WATCH AND SAYING I'VE BEEN HERE 4 HOURS ALREADY" WOW! TIME FLIES, BECAUSE IT FUN, I HAVE FUN. IF THIS GO'S AWAY I WILL LIVE, AND I WILL STILL HAVE MEMORIES, BUT I WILL MISS THOSE SAT AT THE CARD SHOP. THE NOISE, EXCITMENT. THE BANTIER BETWEEN RIVAL TEAMS. MAN I HOPE I AM WRONG.

Posted 11/11/2009 9:13:23 AM
cai expert
Total Posts: 7
Member Since: 5/20/2008






Licensing Decisions Impact All Collectors
This is the best news I've heard in a very long time. Every card company needs to be returned down to earth making collectors the MOST IMPORTANT business entities that they are!



Price Guides need to stop accepting card company advertising again because that severe CONFLICT OF INTEREST causes them to withold the truth and makes them lie as well.



I truly hope some collectors listened to me starting in 2000 and stuck to only ON CARD Certified Autographed Inserts of established minor stars or better. I also added to only buy autographs for the auto value, NEVER for serial numbering. We are the only ones that did not take a significant loss over the past couple of years.



EVERY COLLECTOR SHOULD ASK EVERYONE AT BECKETT THEY CAN FIND AN E-MAIL ADDY FOR, WHY THEY DIDN'T TELL COLLECTORS THAT! They knew it as well as I did and anyone at Beckett who denies it is a liar.



When the dust settles and the economy improves, this hobby can be one to be proud of again by everyone.



James
For long you live and high you fly
But only if you ride the tide
And balanced on the biggest wave
You race towards an early grave

Posted 11/11/2009 1:56:59 PM
niteraven666
Total Posts: 3
Member Since: 1/13/2004






Licensing Decisions Impact All Collectors
There are definitely some valid points that have been brought up in both the article and comments.



I'm also concerned about how local shops willbe affected if they can't get in product that people want.



As an example, here's how the licenses have affected me and my spending habits:



I buy boxes and build sets of Topps and Bowman across sports even though I only watch baseball. That's my loyalty to the brand. At my peak in 2003 I was averaging $1800/month on cards at a ratio of about 4:1 Topps to all other brands. Now in 2009 I think I'm down to $300/month with a ratio of 7:1. Though part of that decline was the loss of some Topps products (like Tribute).



Upper Deck sometimes makes me feel robbed (X cards in a pack and one is an anniversary card). To me Panini America still answers to a foreign parent company. So while I might buy a pack of UD once in a while, Panini has no chance at any of my money.



So where does that money go now? It gets used to pay additional principal on my mortgage. It's kind of scary how quickly that's going down now.

Pulls from my local card shop:
http://www.idyll.org/~raven/cards/
Favorite pull so far:

Posted 11/13/2009 4:35:21 PM
82060
Total Posts: 2
Member Since: 5/10/2003






Licensing Decisions Impact All Collectors
I am a long time football card collector. This news just ruinen my day! Looks like I will not be buying cards next year. Upper Deck and Panini cards stink!

Posted 11/13/2009 5:59:22 PM
Drwarf
Total Posts: 42
Member Since: 6/26/2000






Licensing Decisions Impact All Collectors
Cards have been around in some form for 140-150 years starting with those 1860s baseball post card things. The complaint today is there is too much product out there for the novice collector to comprehend. Now, finally due to economic issues, the sports leagues are cutting back and issuing exclusives in the 4 major sports leagues. Maybe over time this will lead to a better condensing of products and spread the value over an entire product line by one manufacturer. I collect all 4 sports and do not touch anything outside those 4 except for also collecting comic books. For those who collect just Topps football products, sorry, but that's your problem for not expanding your horizons in your hobby. If the sports cards market finally comes to a complete halt, which I doubt, because as long as there is sports fans, their is a passion for sports memorabilia which includes cards; I still have comics to fall back on. Taking into account how many sticker autographs I have seen from Topps lately in their sports products, I say moving on to some else is fine. I applaud Panini for taking over Donruss to keep the products for football and now basketball streamlined with what we're used to like Prestige, Elite, etc. I also agree with the demand that will increase for past products and the increase in appreciation for past sets, wax, and heck, maybe even those 90s chase insert cards. I am going to be optimistic for now until I see a full year or more of these exclusives run their courses. Competition is nice yes, but still changes of this kind can also be nice.


Posted 11/13/2009 6:24:07 PM
steveumd
Total Posts: 4
Member Since: 8/16/2004






Licensing Decisions Impact All Collectors
It is widely reported that healthy competition between card companies has pushed sports card production boundaries in technology, as well as, facilitated development of highly sought after cards having relics, autographs and scarcity. Once a sacrilege, who would have thought during the over production years of the 1990’s that chopping up an original Babe Ruth game-used jersey or Roberto Clemente game-used bat would garner a prestigious place in modern card collections? With the amount of wax ripped of all sports during the 1990’s, how quickly folks began thinking exclusive inserts numbered to a total set or edition size of 199 was not a big deal. Yet, we forget that once so-called exclusives in the not to distant past used to have print-runs into the 1000’s.

We have read such sentiments before. To our credit and disdain, our hobby has evolved. But the question I believe being debated in the board rooms of baseball, football, all major sports for that matter is, “evolved into what?”

Many well informed writers chronicling our hobby have long pressed theories and preached the ills of the hobby, particularly those issues relating to the secondary market that drives up or down sports card values. Too often, what has become sensationalized are current hot issues instantly jumping in price to incredible levels, making those lucky enough to have predicted right a windfall, everyone else, wishing they could score the cards. What has emerged from this business climate has become a corner stone of our hobby, and the belief of many folks inside and outside of sports card collecting, that this is the primary reason children continue to be driven from our hobby.

I have not made up my mind if this argument holds water. Certainly, over production that enables top rookie cards to exist in the hands of every kid is not the answer. We all cannot loose sight of the thousands of once hot issues fizzling out just as quickly as they had soared in price. This too is indisputable as unhealthy. In my mind, this is the essence of the debate. If the goal of Baseball, Football, and other sports properties is to dismantle the secondary sports card market and control distribution of the cards like press kits, then I fear that limiting issues through licensing is a recipe for a "dead cardboard era" to steal a phrase. I am not confident that card companies with a sport monopoly have the financial incentive to produce products the majority of collectors will want to buy, including kids and deep-pocket collectors, unless card companies are driven to production that includes a balance of quality, scarcity and value.

Baseball apparently likes Michael Eisner’s business model and embraces the goal of putting cards back into the hands of kids. But again I have to ask, in a sports cards business environment absent of competitive forces, will there be products that appeal to the very kids that Baseball corporate is trying to woo into this hobby?
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