An industry reshuffles to recapture its youth
Summertime is when baseball's pennant races heat up. Too bad the same can't be said for interest in baseball cards. Fleer, the New Jersey company responsible for breaking the long-running Topps baseball-card monopoly in 1981, went out of business in May, citing sluggish sales and debts approaching $40 million. It was sold at auction last month to rival Upper Deck for $6.1 million. In addition, the Major League Baseball Players Association decided not to renew next season's card license for cardmaker Donruss - a major blow.
"This is huge news because in the last six weeks we've reached a real turning point in the card industry," says Rocky Landsverk, editor of Tuff Stuff, a monthly collectibles magazine. "For the past 10 years, we had too many cards out there. This should help clean some of that up."
The baseball-card industry, once an innocent childhood realm and then a speculative hotbed for collectors in the 1990s, is now scrambling to regain relevance. Executives and veteran observers say the recent shakeup may help stanch the bleeding after years of saturation and soaring prices. At the same time, all agree that the demographic responsible for making baseball cards a flourishing enterprise - kids - must be courted in earnest.
"Everything got too complicated," says Alan Narz, owner of Big League Cards in Orlando, Fla. "There was just too much of everything. No one could keep up with it and there was no commonality for collectors. It needs to be simple again so people will want to build [complete] sets and stay excited about it."
Baseball-card sales have plunged 15 percent annually during the past five years, analysts say. Sports card revenues as a whole peaked at $1.2 billion in 1991; this year, says Scott Kelnhofer of industry publication Card Trade, sales will drop to $260 million. Baseball accounts for 45 percent of all sports-card sales, well ahead of football, basketball, and hockey.
The modern incarnation of card collecting began in 1989 with the arrival of Upper Deck. Defying conventional wisdom, the Carlsbad, Calif., company started selling card packs for the unprecedented rate of $1. Just as important, its cards featured glossy stock and improved photography and graphics - without the gum.
Topps, Fleer, Donruss, and a host of newcomers followed suit, targeting slick cards to nostalgic, well-heeled baby boomers instead of children. But the bubble burst in the 1990s. A proliferation of card purveyors, combined with the 1994 baseball strike and surging popularity of video games, depressed sales.
"There were a number of issues that plagued us during the past 10 years and now the intent is to market and promote the cards better and attract kids," says Evan Kaplan, category director of trading cards and collectibles at the Major League Baseball Players Association. "We are going to work very closely with Topps and Upper Deck to improve in those areas."
Mr. Kaplan envisions lower-priced cards - the most popular baseball series now carry per-pack prices of $4 and higher - and better distribution. He wants more drugstores, convenience stores, and delis selling cards. At the bigger retailers, such as Wal-Mart and Target, Kaplan hopes to improve display areas.
"Go in any of those stores and look at the card shelves," he says. "It's a jumble. You can't tell what is what. There is no clear direction. We have to help make that better."
The players' association also favors a grass-roots approach. A recent test program provides card shops with starter sets provided by the players' association for use with Boy Scout troop gatherings. The program emphasizes getting cards in front of children and explaining the various aspects of collecting and trading cards. So-called "pack wars" create impromptu competitions to see who has the card featuring the tallest player or the one with the best batting average.
"Players still drive the game and what they do sets the tone [for collectors]," says Clay Luraschi, a Topps spokesman. "The players get kids excited to see who is in a pack of cards. And we believe there are things we can do to enhance that experience."
Topps, as well as Upper Deck, must make good on that promise. Last month, Topps reported a 21 percent drop in sales for its cards and collectibles, a decline blamed on continued struggles in the sports sector. For all the company's recent struggles, Topps remains a vibrant brand 54 years after it issued its first set, notes Mr. Landsverk, the Tuff Stuff magazine editor.
"It is still a very young business," he says. "There is a lot of potential to get things back on track."
Even without the industry's admitted troubles during the past 15 years, its attempt to appeal more to children faces steep competition from the deep and ever-expanding entertainment sources. "I'm 43 and when I was a kid, sports was all you did," says Mr. Narz, the Florida card-shop owner. "Now you're competing with Game Boys and MP3s [music downloads]."
Despite such electronic offerings, Kaplan, the players' association executive, is heartened by how children react to his annual Halloween proffering of baseball cards.
"Kids take the cards over candy," he says. "That tells me they still love it. Baseball cards are as fun as they ever were - we just have to get them in the kids' hands."