Tipping Points in the Trading Card Industry

by Rich Klein

In the last few months our Ramblings have taken us from talking about Nationals past to people we have dealt with to other memories of the hobby. While the Ramblings have slowed down due to that nasty car wreck discussed in our previous essays, the Ramblings will continue when life enables us to write more about the past, present and even the future (quick update:  Swelling has gone down; there appeared to be an infection where a gash was in my knee; am treating that issue with anti-bacterial creak and antibiotic and am trying to get back to normal by the end of the year) .

This time in the “Ramblings” we will discuss what I believe were some of the most important “tipping” points in hobby history. I like to say about many of these points that some people will say “this is the worst thing that ever happened to the hobby” while others will say “this is the best thing that ever happened to the hobby”.

Our tour through the tipping points begins with the publication of the first Beckett/Sports Americana Annual of Baseball Cards in 1979. Dr, Jim Beckett had compiled a survey the previous two years and in 1979 took the plunge (with the help of long-time hobbyist Dennis Eckes) of taking the information gathered in the surveys, adding full checklists and pricing in several conditions for his first book. Other than making money for all concerned, the primary purpose of this book was to help the hobby bring order out of chaos. Even though that term was not used until the first publication of Beckett Monthly in 1984, there is little doubt this book did help everyone to a hobby “commonality”. That book was the first step towards what we have today with instant electronic communications and immediate price changes.

With the success of this first book, two other Beckett books made their debut in 1979. Those covered an Alphabetical Baseball Card checklist and another with pricing for Football, Basketball and Hockey cards. While a few hobbyists believe these books were terrible because their knowledge advantage was taken away from them, most hobbyists rolled with this adjustment.  The first monthly pricing publication (Card Price Update) and people seeing prices in print helped to fuel the hobby expansion of 1979-81. In addition, the economy was in a “malaise” very similar to today and collectibles such as cards exploded in prices to go with a jump in gold and silver prices.

By the next year, the Beckett books had become so successful that the publisher tried a hardback edition of the Sports Americana guide. That appeared to be a great idea, but turned out to be impracticalfor most collectors. Although the Beckett book appearance has now changed, the basic thrust of the annual has not changes more than three decades later. Another aspect which has changed since then is which  companies produce cards.

Late in 1980, a ruling was issued that enabled other card companies to join Topps in producing cards of active players. I remember responding to a Baseball Hobby News price poll with the following response to the question of how I felt with three card companies producing cards in 1981. My quote said something to the effect of “Collectors have to be careful, because the three sets may combine to cost collectors $50 for a year.”  I tell you, I would like to buy all the base sets for 2011 for a total of $50 or even the $125 the inflation calculator says that $50 is now worth.

Despite some ups and downs, there is little doubt the hobby growth was helped by having three companies produce cards. After some production and distribution issues in 1981, the other card companies gained ground on Topps and the 1980’s were in many ways a “golden” era for card collectors.

Our next big “tipping” point in hobby history comes in 1987, On a day which is now known as “Black Monday”, the stock market lost a great deal of its value. Many investors who had much success in the 1980’s now pulled their money out of the market and into a collectible they grew up with.  Baseball cards.

In addition, a recession was coming and the combination of people with lots of extra money and no full time job led many to open up their own stores. Within a few years there seemed to be a store on every corner. By the middle of 1991, Beckett had about 30,000 active card store accounts and to give an example, the city of Minot, N.D. had several card stores with some more places to purchase cards at the military base. One of my friends, who sadly lost his inventory in the 2011 flood, used to tell me that he was one of seven stores serving a city of approximately 35.000 residents.  These days, I do not think there is one store left in the much larger city of Dallas. There are several in this general area but no where near as many as 20 years ago.

By the summer of 1994, many of these stores were probably holding on by a thread. Many of them may not have been well capitalized and others may not have been run by good businessmen. For those people as well as many other collectors, the world changed permanently in August, 1994 when the Major League Baseball Players Association (MLBPA) authorized a strike which ended up helping to cancel the 1994 World Series. The effects of this strike were almost immediate as shows slowed down immediately (I actually did a NY-NJ) tour in-between visiting my dad (who had lost his wife of 48 years just a few months earlier) and the collectors had stopped buying baseball cards. To some extent, many baseball collectors never came back and many dealers/shows and stores would not survive the strike or begin a downward trajectory that would conclude with their demise.

I know a few people believe the baseball strike helped to rid the hobby of those dealers who ran their business on a shoe string or were not as business oriented, but I would think the great majority believe anything which eliminated dealers or collectors is a bad thing.

We have two more stops on our “tipping” points. The next one is not as easily defined but for our purposes we will use 1998. This involves the growth of Internet sites, primarily EBay, which really overcame the stores and shows. I remember at Beckett by the middle of 1998, EBay had become an great way of keeping track of actual transactions.  It’s one aspect of pricing at Beckett which was then, and is still today, a very important barometer for actual sales of cards). While no way of keeping track of pricing is one hundred percent accurate,. there became little doubt that most EBay transactions were above board and helped us at Beckett with pricing.

I do know many dealers would complain EBay is “wholesale” pricing but an easy counter-argument to that is EBay is open to anyone with a computer and thus is not a wholesale site but in reality perhaps the biggest “retail” site out there. In my opinion, what EBay proved, to the consternation of many dealers was something we had learned at Beckett because of all the “show-trips’ and dealer contacts we had, namely, very little was actually rare in the baseball card business.

And now, our final “tipping” point in our tour involves primarily 2005 but actually continues to this day. At the beginning of 2005, there were four companies producing baseball cards. With all four companies producing cards there were more than 90 products issued in 2004. I do not know about you, but the idea of one product being released on the average of every four days seems excessive. The law of natural selection took care of Fleer in 2005 and other politics eliminated Donruss/Leaf/Playoff from producing any sets after 2005. There are still several dealers/hobbyists who believe DLP was “screwed” in 2005-06. Without commenting on the reasons for the final decision of 2005-06 I do believe there is little doubt that the reduction of products was a positive for collectors as each product had more time to stay on the counter. Some dealers who depended on constant product turnover still miss those days of that many products issued yearly.

By 2010, Major League Baseball (MLB) thought their should be only one card company. Topps, with their nearly six decade history became the company of choice. Upper Deck did have an MLBPA licence for 2010 but their now known publicized financial experience derailed them from producing any baseball sets in 2010 and beyond. In a hobby update, the MLBPA gave Panini the rights to produce sets featuring active players. Considering the best insert for those sets will be autographs, the future will see if Panini can produce sets with enough autographs to please collectors who may or may not care if there are any “major league” logos on the cards.

Those are some of my hobby “tipping” points, if you have any others, please contact me.

Rich Klein can be reached at [email protected]