And Then There Were Two

The Major League Baseball Players Association last week announced new licensing arrangements with Topps and Upper Deck that will go into effect starting January 2006, with Donruss/Playoff being left out in the cold without an MLB license renewal.

The deals will mean that for the first time in more than a quarter century (since Fleer and Donruss issued baseball card sets to compete with Topps in 1981), there will be less than three major manufacturers of MLB cards next year.

In a press release issued by Donruss/Playoff, owner Ann Powell was quoted as saying, "We are, of course, disappointed and sad about the future loss of our partnership with baseball and understand it was a very tough decision to make. We will continue to produce and deliver the highest quality baseball products for the remainder of the year. All of us at Donruss love being a part of this industry and remain fully committed to the football and entertainment products in the coming years."

According to a press release from the MLBPA, "Under the new agreements, baseball cards will be designed, marketed and promoted to attract kids and new consumers while still providing excitement and value to the current collector base."

Also, the press release states, "The presence of fewer products in the marketplace will reduce consumer confusion and clutter on retail shelves. ... With only two baseball trading card manufacturers, the new licensing landscape will focus on strong brand presence, longer shelf life and fewer, stronger products in the marketplace to simplify the retail experience for consumers."

As hockey card collectors are aware, having only a handful of new releases offered during this past year�s canceled season helped keep demand high, not only for those few new releases, but also for 2003-04 cards as well. Rather than turning away from collecting cards during the NHL lockout, hockey collectors welcomed the chance to get caught up on their collecting pursuits from past seasons.

That�s what the MLBPA is talking about when it refers to "longer shelf life." In the past few years, most products have been popular only within the first few weeks of their release -- until the next "flavor of the month" brand was issued. The hope with the reduction to two companies is that collectors will continue purchasing each new product for a much longer time after its initial release.

According to the MLBPA press release, "Fans also will be pleased to learn that as of Opening Day 2006, a new 'Rookie Card' logo will appear on the cards of players who make their Major League debut. No longer will a player�s rookie card ('RC') be produced before he reaches the Majors."

The press release also indicates that the Topps and Upper Deck baseball sets will be launched at the start of spring training with a promotional and marketing campaign that will go throughout the year. Considering that the first series of both 2005 Topps and 2005 Upper Deck were available before Thanksgiving last year, the indicated spring training launch of those two brands, if true, seems to show the MLBPA is taking a much more hands-on approach to its baseball card licenses than it has in the past.

The new "Rookie Card" logo is further evidence of that. Topps is especially well known for including many minor league players in certain sets -- most notably the various Bowman brands -- so it�ll be interesting to see how the MLBPA�s pronouncement that "No longer will a player�s rookie card be produced before he reaches the Majors" will affect those brands. Since Topps signs players to individual contracts, the company may have a loophole to continue issuing "pre-rookie" cards.

The announcement about the reduction to two MLBPA-licensed companies comes on the heels of Fleer/Skybox going out of business.

Upper Deck announced earlier this month that it has entered into an agreement to purchase the intellectual property of Fleer/SkyBox (most importantly, its trade names) and the assets of Fleer Collectibles for a reported bid of $6.1 million. It is likely that Upper Deck will use the Fleer name for one or more baseball card products next year.

Court documents posted on a web site created and maintained by Warren J. Martin Jr., assignee of the estates of Fleer/Skybox International and Fleer Collectibles, provide an interesting insight into the state of the trading card industry in recent years.

The transcript of a July 8 court hearing regarding Fleer�s "Assignment for the Benefit of Creditors" proceedings includes some noteworthy comments from Christopher Tobia, who served as executive vice president and chief financial officer for Fleer/Skybox until its demise.

According to the transcript, he said: "The trading card marketplace has been declining from a revenue standpoint really since 1996 as an industry. There�s too much -- there�s been the opinion there�s too much supply out there and the market has been deteriorating, so there�s a lot of talk in the past 12 months about reducing licenses ..."

He continued, "I think the leagues and the players associations� respective unions, I believe that they realize that all of the trading card manufacturing partners are -- are suffering financially because there are too much product in the marketplace and therefore ... sales have been declining over the last couple years. I believe that they found they need to do something about it and maybe clean up the marketplace a little bit."

Also notable is the fact that Upper Deck�s $6.1 million bid to purchase the remnants of Fleer/Skybox is a mere fraction of the $25 million Upper Deck offered to buy the company lass than two years ago, according to testimony in the hearing transcript. Tobia also indicates that Fleer had operating losses in each of the past three years: $3.3 million in 2002, $11.5 million in 2003 and $3.5 million in 2004.

About the author
Paul Angilly is a sports reporter for The Bristol Press in Connecticut, and has been collecting sports cards and memorabilia for 30 years. He is not a dealer, nor does he make a profit from buying and selling cards. His weekly sports card and memorabilia collecting column appears each week in The Bristol Press and several other daily newspapers in Connecticut.

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