The Topps-MLB Deal: A Shop Owner's Take

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Monday, 10 August 2009

Sports card shops have a huge stake in MLB's decision to turn its official license over to a single company. One long-time owner shares his thoughts on the move.

The best sports card shops cultivate interest among their customers and spend hours getting kids excited about the hobby. It can work, but success and failure is a fine line in small businesses of any kind.

Last week, Major League Baseball awarded Topps partnership status, leaving only one company to provide officially licensed cards. It's making some store owners nervous. Customers young and old seem to like to have fresh products to open. Will they have that luxury next year?

Mike Fruitman, who has twenty years under his belt as owner of Stadium Sports Cards in Aurora, Colorado, is trying to sort through the move. He shares his thoughts:

Well, it’s been close to two days since the information came out regarding MLB’s decision to make producing baseball cards exclusive to Topps and my world is still spinning.

In that time I’ve enjoyed reading the input from other shop owners about how this will affect their stores. I’ve also been receiving loads of thoughts from my customers, who either read about this happening in an email I sent out to them yesterday or who are dialed into hobby happenings.

Wow, where to begin?

We already went through this in 2005 when DLPS had their license yanked from them. I remember reading that decision was made to reduce the amount of products being made, while not kneecapping each of the three companies and having them produce an amount of products that didn’t make keeping the license viable.

While we carried the remaining DLPS products for the rest of the year and have been bringing in certain releases like 2005 Diamond Kings and 2005 Donruss Signature with regularity, I can think of at least a dozen loyal DLPS customers who no longer grace my store. Now that can be in part because of economic factors, moving, buying houses or any number of reasons, but I still believe that it is firmly because they could no longer purchase the products they liked.

We also saw this move recently with the NBA and a few years back with the NHL. It’s been too soon to see the impact of the NBA’s decision and while Panini has some of the best minds out there, unless they get Kobe, LeBron and MJ away from UD we are going to flat out see a drop off.

What gives me hope is that the NHL move has not resulted in lessened sales for me and if anything, my NHL sales are significantly higher than they were in 03/04 when there were more than one licensed company producing trading cards. Then again (no disrespect intended to the NHL's Dave McCarthy who is incredibly passionate about his sport and who does a top notch job) there is a world of difference between MLB and NHL sales for most card stores. While I am technically a NFL card store based on sales, I still call myself a baseball card store and don’t see that changing anytime soon.

Each company has loyal customers and if Topps were to lose its license I would feel the same way. I count on Topps 1 & 2, their factory sets, Heritage, Triple Threads and their other releases to draw in customers, pay my bills and remain open.

Plain and simple, I like Dairy Queen (perhaps too much and no, it is not as good as Carvel which I left behind in Miami) and will put up with Baskin Robbins. If DQ was to go the way of the dodo bird, I would not take all my ice cream funds and instantly convert into a Baskin believer. I would simply eat less ice cream and deal with it.

While this would be a good thing for my general state of health, my greatest fear is that this will happen with my customers and they too will be spending their hard earned funds in other ways. In this current economic climate, this might be enough to put too many of the remaining card shops that are teetering over the edge and result in their demise.

In recent years MLB has made moves to reduce the quantity of products made by first eliminating DLPS, then bringing the numbers down to 40 and then 34 products made each year. While I shared above the problem with killing the DLPS contract, the moves to reduce to 34 meant (for the most part) that some of the unnecessary products were no longer being made. I mean if you miss Topps Bazooka or Upper Deck Special F/X, so be it, but my shop is no worse off for them no longer existing.

What does represent a problem is not having Upper Deck 1 & 2 being made (we have sold at least three cases of each in 2009), SP Legendary Cuts (4+ cases this year alone), Sweet Spot (3+ of the 2008 version), Ultimate Collection (3+ of the 2008 version), Ballpark Collection (10+ of the 2008 version) and countless others Upper Deck has churned out in recent years.

People have come to love those products --many at closeout--over the years and I cannot say with great certainty that every single dollar from those products will instantly turn into Topps dollars.

Clearly there is much more to come of this. We still have not heard from Topps other than Mr. Eisner’s first statement that accompanied the breaking news. Is Topps going to be able to produce more MLB trading card sets each season? Is part of this deal an agreement by Topps to increase the visibility of trading cards through advertising? Can we say for sure that Topps will be able to fill the higher-end niche market beyond Bowman Sterling, Topps Sterling and Topps Triple Threads? Are allocations from Topps going to be increased to match the demand from hobby stores? Does this mean that Derek Jeter will be able to be featured in 2010 Topps products since Upper Deck will not be making MLB licensed released?

It would have been nice to have had some if not all of these and other questions answered at the time of this announcement instead of keeping hobby shops and their customers waiting in the wind.

Plain and simple, I carry what my customers want. I learned within weeks of opening close to two decades ago that what I thought would sell means nothing unless my customers step up to the counter and agree with their wallets. If my customers wanted Bazooka and Special F/X I would have piled boxes of those products higher than Randy Johnson.

We have countless sales of products like UD Premier, Ultimate Collection, SPX, SP Authentic and other MLB products from customers who simply like what they pull when they buy those products in other sports. Are those sales going to go away or will shop owners be able to convert those dollars into higher-end releases from Topps? If you own a hobby store and can say with certainty that not a single dollar will be lost from them no longer being made, you are a far more secure person than I am.

Customers have gotten past trying to get 28 Kevin Maas Topps rookie cards in order to have the most complete collection possible. Perhaps we will see a return to bulking up on one player’s cards like I remember when my store opened so long ago. Things were a lot more innocent back then and in some regard, it would be nice to see a return to such days.

Recently we have seen moves by MLB to protect the integrity of rookie cards by adding the rookie logo to cards that fall within their rules of what is and what is not a rookie card. I am left to wonder what Upper Deck will do in 2010. Should they go the way of DLPS recent offerings like Elite Extra Edition, Donruss Threads and Playoff Prime Cuts, I wonder what the response from customers would be. Plain and simple, if my customers want it, they will find it on my shelves.

As a shop owner, I feel left out of this decision by MLB. This move will onservatively impact tens of thousands of dollars in sales by my store alone and wish that my shop and others had been contacted before such a massive move.

I was never contacted and asked my opinion about whether there were too many products being made. I was never contacted to see my opinion as to whether there were too many manufacturers left in the market. I was never contacted to see whether Topps OR Upper Deck should be eliminated.

I do not pretend to be the biggest store out there, but would have liked to be heard with regard to this move by MLB. Clearly MLB, like any other business is making a move that they believe is in their best interests, I’m not yet ready to say that this move was made in the best interests of mine and other hobby stores. I would LOVE to read these thoughts in a year and feel nothing but love for those who engineered this massive change and hope that every hobby shop that is open now, will still be open and reaping the rewards of a single card manufacturer that is licensed by MLB.

Here I am close to 48 hours after this announcement hit and part of me is thinking that I am glad that I only signed a two year lease renewal this past spring. That having been said, card stores have survived work stoppages, steroid problems, players who didn’t live up to the hype, quarterbacks with only three years of experience who never won a playoff game but whined their way out of their city and stomped on the hearts of collectors who had hundreds of their cards (ok, perhaps that is just me and my Colorado brothers), the constant advances of the internet with all the non-competitive issues that have resulted and everything short of plagues, locusts and boils.

In any case, the landscape of baseball cards has been radically changed by this move and while my first thoughts are not incredibly optimistic, I will hold off until some of the questions I brought up and others are answered before I start going “Chicken Little” on MLB’s decision. I hope that all of my hobby shop brothers are here next year and in future years in a stronger position because of this change.