Hobby Paper: First Draft.

Here it is folks. I'm turning this in this evening. It's only a rough draft, and it's far from finished, but I'd still like your feedback. Please!

Chris Harris
11/2/10
ABSTRACT

On August 6, 2009, MLB Properties (MLBP), the licensing arm of Major League Baseball, granted Topps Chewing Gum a five-year exclusive-license for the production of baseball cards beginning with the 2010 baseball season; effectively giving Topps the monopoly-power it previously had from 1956-80. In 1981, Topps lost their monopoly after a competing firm sued and won an anti-trust case and was granted a license. After a decade-and-a-half of increased competition, which saw as one point as many as six different firms producing over 100 different MLB-licensed baseball card sets a year, “The Hobby,” as it became known, boomed. But after the boom came the inevitable “bursting of the bubble.” In the three decades since, through a series of mergers & acquisitions and liquidations, the number of firms producing officially-licensed baseball cards went from one, to three, to six; then four, two, and now back to one.

This paper will analyze “The Hobby” in the increasingly competitive boom years of the 80s and early-90s; the crash years of the mid-to-late-90s; the relative stability, despite the exit of some firms, of the mid-to-late-2000s; and the rationale behind MLBP’s decision to grant Topps monopoly power again.
In the Beginning…

The baseball trading card industry as we currently know it can be traced to the years immediately after World War II. In 1948 two competing bubble gum companies, Leaf and Bowman, issued the first modern baseball card sets. In the years prior to WWII, trading cards (not just of baseball players, but of athletes of all sports) were often tied to another product as a special “insert” or premium – usually cigarettes, candy, or chewing gum; so it was natural that the first post-War entrants were chewing gum firms. Both 1948 Leaf and 1948 Bowman Baseball were packaged with a stick of chewing gum in each pack, and in both cases, the main selling point was the gum and not the cards. After releasing a second series of cards in 1949, which was an extension of the ’48 set, Leaf quickly exited the industry leaving Bowman the sole firm. That is until 1951 when Topps Chewing Gum entered and issued their first set. 1951 Topps Baseball resembled playing cards and was not successful as Topps hoped. A year later Topps dropped the playing card element for a traditional trading card set, resulting in their landmark 1952 Topps Baseball, featuring the famed Mickey Mantle card. For the next four years, Topps and Bowman competed, not only with each other for the loose change of America’s pre-teen boys, but with the Major League players themselves, signing them to lucrative, company-exclusive contracts. For example, the aforementioned Mickey Mantle was in both the 1952 and ’53 Topps and 1952 and ’53 Bowman Baseball sets, but was only available in Bowman in 1951, ’54, and ’55. From 1952-55, Jackie Robinson was exclusive to Topps. Willie Mays was in 1951 Bowman but not ’51 Topps; and was in 1953 Topps but not ’53 Bowman. Stan Musial’s asking price was so high, that neither company could afford to sign him for their 1954 or 1955 sets. By 1956 Bowman was hemorrhaging money and sold out to Topps, ending the competition, and for the next 25 years (with some exceptions) Topps would have a monopoly on baseball trading cards.
Although both the Federal Trade Commission and other potential entrants would sue, all efforts to break Topps’ monopoly would prove unsuccessful until 1980. Five years earlier, Fleer, a competing chewing gum manufacturer, filed suit charging that Topps’ use of exclusive player contracts had constituted an illegal restraint of trade. One tactic Topps employed as a pre-emptive strike against potential new entrants like Fleer was to identify the top minor-league prospects and sign them to “Steak Dinner” contracts. In exchange for selling their trading card rights, on cards packaged with or without gum, exclusively to Topps for the first five years of their Major League career (that is, if they ever made it to the big leagues), the player would receive a check for $5 – “steak money” as it was known. The contract also provided for an annual payment of $125 per year, once they reached the Majors. In 1963, Fleer attempted to enter the baseball card market by aggressively signing those Major League players Topps had passed on in the minors (notably 1962 National League Most Valuable Player Maury Wills) and some established stars to a contract intentionally worded to by-pass Topps’ “with or without gum” contract by packaging it with a “cookie” so low in sugar content that it did not legally fit the definition of a “confectionary product.” Low sales (kids complained that the “cookie” tasted like a dog biscuit) and threats of legal action against Topps, forced Fleer to exit the market after only a single 66-card release. In the mid-70s, Fleer approached the nascent Major League Baseball Players Association (MLBPA) with an idea to market over-sized satin “patches” with the faces of baseball players. (The patch was seen as an “end-around” Topps’ baseball card contract.) Fleer was turned down, and sued both Topps and the MLBPA.
After five years in the courts, Fleer would win and was granted a license to produce baseball trading cards beginning in 1981. A third firm, Donruss, at the time a division of General Foods, was also granted a license; and in 1981 three competing firms (Topps, Fleer and Donruss) all produced baseball trading cards packaged with chewing gum. Later that year, a Federal Appeals Court ruled that Topps still had the exclusive right to produce baseball cards either with confectionery products or as a stand-alone product, and for their 1982 releases Fleer inserted an MLB team logo sticker and Donruss a piece of a jigsaw puzzle into their packs.
Competition at the beginning of Oligopoly.

The 1980s marked a beginning of a change in card collecting, not just because there were now three times as many sets to collect. The 80s also coincided with the concept of the baseball card as an investment. The values of the 1950s Topps cards of old began to grow, and this led speculators to stockpile the “rookie” cards of current stars. After all, if a thirty-year old 1952 Topps Mickey Mantle can sell for $4000 in 1982, who knows how much Ron Kittle’s 1983 Fleer rookie card would fetch in thirty years’ time?
During this period, the “Big Three” (as they came to be known) competed little on price, but more on player selection and inclusion of valuable “rookie” cards. Both 1981 Fleer and 1981 Donruss Baseball did offer more cards per pack in 1981 (17 and 18, respectively) and Fleer included two additional packs (38) per display box; but by 1982 all three firms priced their cards roughly the same: 30 cents for a 15-card pack. Price would remain about the same for all three brands for the remainder of the decade, usually increasing by about a nickel-per-pack every other year.
One way Topps attempted to compete against their new rivals was the re-introduction of the “Traded” set. Twice in the 70s (1974 and 1976), towards the end of the baseball season, Topps re-released their baseball card set, but replaced the cards of selected players who had changed teams during the season with new cards of the player in their new (usually airbrushed) uniform. In 1981, Topps took this concept one step further with their first Topps Traded set. Released at the end of the 1981 baseball season as a 132-card extension of the 726-card 1981 Topps Baseball set, and intended to feature those players who had changed teams, what made 1981 Topps Traded so unique was its distribution. Topps Traded was sold exclusively as a full 132-card set and only available through Hobby dealers – the first example of a “factory set” and a “Hobby Only” product.
Donruss and Fleer initial sets, meanwhile, could best be described as lackluster and amateurish. Both 1981 Donruss and 1981 Fleer Baseball were rushed and riddled with quickly-corrected errors. However, it was precisely those errors, and their perceived scarcity, that got collectors to notice the new firms. For example, New York Yankees third baseman Graig Nettles’s name was accidentally misspelled as “Craig Nettles” on the back of some copies of his 1981 Fleer card. Fleer was able to correct this error early in the print run, but some of the “Craig” cards did find their way into packs and were selling for as much as $10 on the secondary market – an unheard of sum for a new card in 1981. A year later, Fleer tried to catch lightning in a bottle again with a scarce error card of Atlanta Braves relief pitcher Al “The Mad Hungarian” Hrabosky that some hobbyists believe was intentionally made and intended to drive sales. But collectors weren’t fooled though, and Fleer quickly abandoned this strategy.
By 1984, both of the new firms struck back by increasing the quality of their products, and reducing the quantity. After back-to-back mediocre sets in ’82 and ’83, Donruss drastically cut production of 1984 Donruss Baseball. And in a nod to the growing fad of rookie card speculation, included a 20-card subset of “Rated Rookies.” The addition of more rookie cards and the cut in production made 1984 Donruss Baseball one of the landmark baseball card sets of the era, and the ’84 Donruss Don Mattingly card one of the more valuable rookie cards of the decade. Fleer, which like Donruss, improved the quality of their cards, and cut down on the number of errors, took Topps’ idea of a post-season supplementary set one step further with Fleer Update. Like Topps Traded, 1984 Fleer Update was a 132-card set sold only as a factory set and only through Hobby dealers. Unlike Topps Traded, Fleer Update would be focused not just on players who changed teams, but on rookies who had made their Major League debut during the season. Unlike Topps Traded, ’84 Fleer Update featured the only rookie cards of Roger Clemens and Kirby Puckett and one of the few cards of Pete Rose as a Montreal Expo. 1984 Fleer Update was also short-printed, compared to other card sets, and remains one of the benchmark sets of the 80s.
New Entrants

Topps, Fleer, and Donruss were not the only baseball cards to collect. Throughout the 70s and into the 80s, Kellogg’s issued an annual set of officially licensed “3-D” baseball cards, randomly inserted into boxes of their cereal. Topps never thought of the Kellogg cards, or any of the other “food” sets, as a competing product since Kellogg’s annual set wasn’t nearly as comprehensive as Topps (33 cards compared to the 660-card set Topps made), and never brought legal action. Unlike Topps’ cards, the Kellogg cards were not made by the issuing firm; rather, production was outsourced Optigraphics, a Texas-based printing company known for their use of lenticular printing – allowing multiple images to be seen by tilting the picture by the use of a ribbed plastic lens. Kellogg’s issued their last set in 1984, and in 1986 Optigraphics received the licenses to produce their own trading card sets. Optigraphics’ first set, 1986 Sportflics, was seen less as a competitor to “The Big Three” (Topps, Fleer, and Donruss) and more as a novelty product. Two years later, Optigraphics would unveil Score, a traditional card set designed to compete with The Big Three. Optigraphics would later spin-off their trading card brands into a new company, known as Major League Marketing (later known as Pinnacle Brands) and would continue to produce both Score and Sportflics until 1990 when Sportflics was discontinued.
During this period, new start-up trading card companies were being created and receiving licenses from the other major sports. From 1988-1991 the number of firms producing officially licensed National Football League trading card sets mushroomed from one (Topps) to eleven. Up until 1990, Topps had a pre-1981 baseball-esque monopoly on hockey cards. By 1990, there were four firms in the hockey card market. The market for basketball cards was so non-existent, that for three whole years in the mid-80s (1983-85) no NBA cards were made. By 1991, there were also four firms -- one of which, Skybox, was partially owned by the NBA itself.
Other firms bypassed the licensing altogether, and released “Draft Pick” and “Prospect” sets of young stars and hot rookies depicted in their high school or college uniforms. Some of these companies would go on to get some sort of license; others issued a sole product and were never heard from again. Major League Baseball and the MLB Players Association’s licensing arms were more cautious, and when a new start-up firm called The Upper Deck Company approached in 1988, they were told that MLB had no intentions of issuing a fifth license until 1992 at the earliest. However Upper Deck was able to acquire both MLB and MLBPA licenses by creating a new kind of baseball card: A better baseball card.
Upper Deck

Whereas the trading card business was changing all around them, the cards themselves had changed little. Topps was still using the same “cereal box” gray cardstock it had used since the 50s. While the designs on the front were different, the backs of Fleer and Donruss’ cards changed little. Topps, Fleer and Donruss still packaged their cards in wax paper, which, when carefully opened, can be easily resealed allowing unscrupulous collectors to tamper with the contents of a pack (i.e. open a pack, pick out the stars and rookie cards, replace them with a less desirable cards, and reseal the pack with a hot roller or curling iron.) Score pushed the bar forward a little bit in ’88 by printing the first full-color card backs and fin-sealed, tamper evident packaging – but not tamper proof as the cheap plastic used in the wrapper allowed the contents of the pack to be seen without even opening it. 1989 Upper Deck Baseball changed the trading card business with the use of higher-quality cardboard and modern printing techniques. The problem of pack searching was dealt with tamper-resistant, fin-sealed, foil-lined wrappers. Finally, with counterfeiting becoming an issue, each Upper Deck card would be stamped with an impossible to duplicate hologram. Although Upper Deck’s cards cost almost twice as much as the competition, ($0.99 for a pack of 15 cards; where Topps, Fleer, Donruss and Score were priced at around $0.50/pack) collectors embraced the “premium” card concept espoused by Upper Deck.
There is no doubt that 1989 Upper Deck Baseball changed The Hobby forever, and the reaction from the four legacy firms was different. In 1989, Topps revived the long-dormant Bowman brand-name by issuing a second full set of cards. Although Topps, Fleer, Donruss, and Score had all issued some sort of late-season “Update” or “Traded” set to supplement their main card sets (all of which were issued around the time of Spring Training), never before had a trading card company released a second full-card set in the same year. 1989 Bowman Baseball was not well received by collectors however, and cannot be considered a true competitor to Upper Deck’s “premium” card set as it looked, and felt, like a Topps card. The first strike was launched by Donruss with the release of 1990 Leaf Baseball. Like Upper Deck, Leaf was printed on a higher-quality cardstock with metallic inks and full-color backs, and packaged in tamper-proof packs. It was also produced in lower quantities than Donruss Baseball, or any other competing set issued that year for that matter, and sold for $1 a pack. 1991 brought Fleer’s Ultra Baseball which, like Leaf, was also printed on better cardstock, with full-color backs, and fin-sealed, tamper-proof packs.
Topps struck back by repositioning their Bowman brand towards rookies and prospects. Unlike their competitors, who were bound to the MLBPA’s Group Licensing Agreement (GLA), Topps still was allowed to sign players to individual contracts. The MLBPA’s GLA only allowed Fleer, Donruss, Score, and Upper Deck to include those players who were on a Major League 40-man roster, and therefore, members of the PA. Since Topps pre-dated the establishment of the PA, they were allowed to continue to sign minor-league prospects to “Steak Dinner” checks, and include these players in “Major League” baseball card sets; thereby, putting them at a competitive advantage when it came to issuing valuable rookie cards. Although, from time-to-time, Topps would fail to sign some players (Alex Rodriguez did not appear on a Topps card until 1998, four years after his Major League debut), throughout the 1990s and 2000s hundreds of players had had their Major League rookie cards issued by Topps, often in their Bowman brand, years before they actually made their Major League debut – that is, if they ever even made to the big leagues.
But the full effect of Topps’ repositioning of Bowman as “The Home of the Rookie Card” would not be felt for a few years. Their immediate response to Upper Deck in the premium baseball card “wars” was Stadium Club. In much the same way 1989 Upper Deck Baseball “changed The Hobby forever,” 1991 Stadium Club Baseball upped the ante further. Stadium Club created a stir in the hobby upon release with its dazzling, photo-quality, full-color, borderless pictures; slick, glossy card stock; and gold-foil stamped design elements. The first series of ’91 Stadium Club was sold at a suggested retail price of $1.25 for a pack of 12 cards; but caused such a sensation in The Hobby that market prices reached an almost unheard level of $8/pack. Other firms followed by adjusting their existing product lines to copy Stadium Club (i.e. By 1993, Fleer’s Ultra and Donruss’ Leaf would all adopt the Stadium Club “look”) and introduced their own “premium” card sets.
In addition to creating new “premium” quality product, another way the trading card manufacturers competed with one another was through so-called “insert” cards. An insert is a card that is separate and distinct from the main (or “base”) set that is pulled from the same packs as those base cards. While card makers had included many different extras in their wax packs almost from the start, from stamps to tattoos to mini-posters to small sets of cards, it wasn't until 1990 that the term "insert" came into its own. That year, Upper Deck created a special 10-card “Baseball Heroes” set of Reggie Jackson – whom at the time was a member of Upper Deck’s board of directors. The Baseball Heroes cards were numbered as a distinct set and randomly inserted into packs of 1990 Upper Deck High Series Baseball at the rate of one in every ninth pack (roughly four “Reggies” per 36-pack box). While that wasn’t special – Fleer had included inserts as early as 1986 – something else Upper Deck did, was. Inspired by a viewing of Willy Wonka and the Chocolate Factory, an Upper Deck employee had the idea to have Jackson personally autograph 2500 of his Baseball Heroes cards. The autographed cards would then by randomly inserted into packs, along with the regular, un-autographed, Baseball Heroes.
The chase for the “Golden Reggie Tickets” was on, and Upper Deck struck gold. Soon, the other firms quickly followed suit with varying degrees of success. 1991 Donruss Baseball had the “Elite” inserts, with each card serial-numbered to 10,000 copies – at the time, a scarce number. In 1992, Fleer combined the insert with the rookie cards with their hyper-popular “Rookie Sensations.” Available only in 35-card “jumbo” packs, the stated odds of finding any one of the 20 Rookie Sensations were 1:4/packs. The Rookie Sensations caused such a sensation that at one point, 1992 Fleer Baseball jumbo packs (which had a $1.99 price tag printed on the wrapper) were selling for as much as $5, and the Frank Thomas Rookie Sensation was selling for $150 straight out of the pack. With the ’92 Rookie Sensations, for the first time, a collector could buy a brand new pack of baseball cards and have a reasonable expectation of pulling a very valuable card.
Another innovation was the advent of the “parallel” insert. Parallels are inserts that are almost identical to the base set except for some small variation. The first parallel as we know them today were the Gold cards in 1992 Topps Baseball. The Topps Gold cards were identical to the regular Topps cards, except that it had a Topps Gold logo on the back and the front had the player's name and team name embossed in gold foil. At first, demand for these cards was very high because they were pretty scarce (792 cards in the set, with just one Gold card per 36-pack box). Donruss followed with Leaf Black Gold, a very attractive black-bordered parallel to the 1992 Leaf base set that was inserted at the rate of one Black Gold per pack. Parallels still abound in the form of different foil or ink colors, design elements, die-cutting, or photo selection. They are a cheap way for trading card manufacturers to “add value” to a product, all the while saving on the design cost of producing a whole new set of cards.
With the growth of premium card sets, it was only natural that manufacturers would push the bar higher with “super-premium” brands. In 1993, Topps, Fleer, and Upper Deck would release the first “super-premium” card sets: Finest, Flair, and SP. 1993 Upper Deck SP Baseball, which had a suggested retail price of $3 for a pack of 12 cards, is noted for its very limited production, die-cut Platinum Power inserts, and the most valuable rookie card of Derek Jeter. Fleer’s 1993 Flair Baseball was distributed exclusively in specially encased "hardpacks,” that resembled a pack of cigarettes. Flair cards were made from a heavy board-like cardstock twice as thick as a standard trading card, and slathered with copious amounts of high-gloss laminate on each side. But by far, Topps’ 1993 Finest Baseball set the bar for what a trading card set could be. First, Topps publicly announced that only 4,000, 12-box, cases would be produced, the first time in the history of The Hobby that a major manufacturer publicly released production figures. Cards would be issued in seven-card, fin-sealed, foil packs that carried a suggested retail price of $3.99. But what made ’93 Finest so ground-breaking were the cards themselves. Printed on a chromium-based stock, the super-shiny Finest cards were a smashing success upon release with pack prices immediately soaring well above the $20 barrier on the secondary market. What’s more, approximately one card in each 18-pack display box contained a Refractor parallel. Refractors have a Fresnel lens embedded into the card that, when held under direct light, especially sunlight, "refracts" a bright rainbow sheen onto the card – a spectacular visual effect when combined with the chromium stock card. The legend of 1993 Finest Baseball has continued to grow throughout the years. The ‘93 Finest Refractors are still sought-after, and their never-confirmed-nor-officially-denied print run of 241 copies remains a benchmark for scarcity.
The Decline
From 1989-96 the baseball industry would remain stable at five licensees: Topps, Fleer, Donruss, Pinnacle Brands (the former Score) and Upper Deck. In 1993, Pacific Trading Cards, one of the many aforementioned start-ups that had acquired a license to produce football cards, was given an MLB/MLBPA license to produce bi-lingual baseball cards in English and Spanish. Pacific released only one or two bi-lingual card sets a year, are were not well received by most non-Spanish speaking collectors. As an industry, “The Hobby” as it came to be known, was at its peak. A 1991 study commissioned by Action Packed, a manufacturer of NFL, NASCAR, and minor-league baseball cards, had estimated that the annual combined revenues of all trading card manufacturers had reached $1.2 billion. This figure included all trading card firms from all sports – although baseball cards still counted for the lion’s share of business (about 85%). At this point, two forces conspired to send The Hobby on a long, drawn-out, decline.
The first was the bursting of the bubble of trading cards as a speculative investment. With the ever-increasing value of “vintage” cards (such as the 1952 Topps Mickey Mantle, and the 1909 T-206 Honus Wagner), a popular adage was, “I’d be a rich man, if only my mom didn’t throw away my baseball cards.” By the late 1980s, not only did mom not throw away their kids’ cards, it was moms and dads who were the ones collecting them. Baseball cards ceased being a childish diversion and cards became traded almost like penny stocks. Hobby magazines like Sports Collectors Digest, Tuff Stuff, and Baseball Hobby News regularly had advertisements from Hobby dealers offering 10, 25, 50, even 100-count lots of the same player’s card. (This collector recently came into possession of a lot of 1354 1987 Topps Andres Galarraga cards. Don’t ask why, it’s a long story.) As more and more collector/speculators were entering The Hobby, manufacturers began printing more and more cards to keep up with the perceived demand. With the exception of 1989 Upper Deck, 1990 Leaf, and 1992 Bowman most baseball card products from the era stretching from 1988-1992 were grossly over-produced and currently have little monetary value. Even the rookie cards of future Hall of Famer players like Jeff Bagwell, Tom Glavine, Ivan “Pudge” Rodriguez, and Jim Thome will probably never be worth more than $5 or $10 because the sets they were included in were massively over-produced. Realizing that their 500-count lot of Casey Candaele rookie cards, and that unopened case of 1990 Topps probably wouldn’t be enough to put Junior through college, many of the collector/speculators that entered in the mid-to-late-80s, began to exit The Hobby in the early-90s.
The second was the devastating strike that cancelled the 1994 World Series. Ironically, it was largely baseball cards, and the royalties paid by the baseball card firms to the MLB Players Association, that allowed the PA to accumulate a large “strike fund,” which in turn, provided a financial incentive for the players to strike. Needless to say, the 1994-95 strike hurt baseball on all levels, but especially The Hobby, as many long-time baseball fans who collected for fun and not for profit also exited.
By the time of the strike, many of the five baseball card firms had diversified and were able, in the short-run, were able to absorb the hit. In 1994, Topps, Fleer, and Upper Deck all had licenses with the other three major sports leagues (NFL, NBA, and NHL) and their respective player’s unions. Pinnacle Brands had its hands in the baseball, football, and hockey card business, and had just entered NASCAR trading card market. Topps was also still in the candy and gum business. (Marvel Entertainment, which purchased Fleer in 1993, spun-off the gum business shortly after acquiring it.) The big loser was Donruss which only had MLB/MLBPA and NHL/NHLPA licenses. The baseball strike, combined with the concurrent NHL work stoppage, crippled Donruss and in May 1996, their Finnish parent sold the company to Pinnacle Brands.
The post-strike years: Competition and Innovation.

After the strike, The Hobby went through a transition period. Those collectors who entered The Hobby in the 80s, hoping to strike it rich, exited as quickly as they entered. Others, who came-of-age in the early-80s collecting Topps, Fleer, and Donruss Baseball, got confused by the dizzying array of new, more expensive, super-premium products, felt like they couldn’t keep up, and moved on. Others felt betrayed by the strike, and quit baseball all together. By the mid-90s, all that was left were the die-hards, the cardboard junkies, and other hardcore card collectors. This is reflected by the sales figures for new cards. At its peak, in 1991, the five MLB/MLBPA licensees sold an estimated $1 billion worth of baseball cards. By ’94 that figure had fallen to about half that ($480 million), and half again a year later ($280 million in ’95). In an effort to stem the tide of declining revenues, the card companies began to increase the number of card sets, but cut back on their production.
As previously discussed, the early 90s saw the introduction of first “premium” (i.e. Stadium Club, Leaf, Ultra) brands, then “super-premium” brands (i.e. Finest, Flair, SP). Although Pinnacle Brands was late to the game, the strategy was for each company to produce one “base level” brand, usually in two series, followed by a post-season “Update” or “Traded” set; one premium brand, also issued in two series; and a super-premium brand at the end of the baseball season. By the early 90s, it was becoming commonplace for card companies to split up their “base” and “premium” level products into different series. For example, rather than releasing the whole 825-card 1993 Topps Baseball set at once, Topps released the first 396 cards as 1993 Topps Baseball Series One, in December 1992, and the remaining 429 cards in Series Two that June. This was the first time in 20 years, Topps issued their “flagship” Topps Baseball set in multiple series. 1993 Stadium Club Baseball was a 750-card set issued across three separate series, with a series released before, during, and after the MLB season. Topps’ entry into the new super-premium price point, 1993 Finest Baseball, came in August. And finally, 1993 Topps Traded would be issued in November.
Topps was not the only firm employing the multiple-series strategy. In 1993, the five licensed card companies issued 16 different card sets, but spread them out among 30 product releases. After the strike, things changed dramatically. In 1997 those same figures mushroomed into X card sets among Y product releases. While those products were produced in smaller quantities than the “junk cards” of the late-80s and early-90s, collectively, the manufacturers were still printing just as many cards as before – just across more and more different brands.
By 1994, just about every firm’s “base-level” brand (i.e. Topps, Fleer, Donruss, and Score) had improved quality-wise to the standard of Upper Deck. Ultra-glossy coatings, gold-foil stamping, and tamper-proof packaging had become industry standard, and a $1/pack price level was the minimum. By 1994, both Upper Deck and Donruss had re-positioned their “flagship” products (i.e. Donruss Baseball and Upper Deck Baseball) to the “premium” level to compete with Stadium Club, Ultra, and Pinnacle. Both firms would not abandon the “base-level” market, as Upper Deck and Donruss introduced Collector’s Choice and Triple Play, respectively. (Triple Play was introduced in 1992 as a $0.50/pack “sub-base” niche product designed to appeal to children. The “kiddie card” concept was not successful, and by ’94, Triple Play was reconfigured to a conventional baseball card set. Triple Play would be discontinued after the strike.) The Hobby would continue to introduce new “super-premium” brands, with 1994 seeing the debut of Topps’ Bowman’s Best, a hybrid of their rookie-laden Bowman set with their popular Finest brand, and Donruss’s Leaf Limited. Pinnacle Brands, which was the last to fully embrace premium cards, also took a while to issue their first super-premium brands, waiting until 1995 to unveil Select Certified and Zenith Baseball. Both products were well received. Perhaps the ultimate “super-premium” product was introduced by Donruss in 1996 with the release of 1996 Leaf Signature Series Baseball. With a suggested retail price of $9.99 for a pack of four cards, Leaf Signature was the most expensive pack of baseball cards ever produced to date. However, each pack contained one card personally autographed by a Major League Baseball player. And while the types of autographs being pulled from Signature Series were of the “middle-inning reliever” and “backup catcher” variety, it was a hit with collectors.
Whereas in the 1980s, rookie cards drove the secondary market, by the 90s, although rookie cards would continue to be important, inserts would take center stage. In order to exploit the demand for inserts, one strategy employed would be to create different inserts for different pack types, and different outlets. For example 1993 Upper Deck Series One Baseball contained a 15-card “Triple Crown Contenders” insert exclusive to 15-card packs sold directly to Hobby dealers. 15-card packs sold at mass-market retail outlets (Wal-Mart, K-Mart, Target, and the like) had their own exclusive insert: a 27-card set featuring the photography of Sports Illustrated’s Walter Iooss. While 27-card Jumbo packs had the exclusive “Home Run Heroes” insert. Other firms would soon copy the “Hobby/retail” insert scheme. Other firms would make inserts scarcer, tougher to find in packs, and exclusive to specific pack types. By the mid-90s, just about every baseball card set issued would have at one insert set.
Companies also competed on innovation and new technologies, none more so than Upper Deck and Pinnacle Brands. In December 1992, Pinnacle introduced the trading card world to a printing technology called Dufex in their 1993 Select Baseball. Dufex is a unique printing technique developed by a British company that involves taking an aluminum lined paper sprayed with special ultraviolet transparent inks. After the ink dries, the cards are then hand engraved giving them their trademark "etched foil" design. Different materials were also being used, most notably by Donruss. Throughout the mid-90s, Donruss would print inserts on wood, canvas, nylon, leather, and other materials. Other companies would follow suit with their own “materials” cards.
In 1996, Press Pass, a manufacturer of NASCAR cards took race-used lugnuts taken from a car’s tire, cut them up, and mounted them onto a card. The licensed baseball cards firms were slow to pick up on “game-used” cards, mainly due to the costs of acquiring such items, and the additional capital costs of cutting up and mounting the items on cards. Upper Deck cut up a bunch of game jerseys, and randomly inserted them into 1996 Upper Deck Football and 1997 Upper Deck Baseball. But for the rest of the 90s, game-used cards would be what autographed cards were in the beginning of the decade: a novelty “Golden Ticket” item that initially were tough to find, but became gradually commonplace.
Not all innovations were accepted by collectors. And then there were the gimmicks. Pinnacle Brands was notorious for coming up with one outrageous gimmick after another and many blame them for contributing to their demise. Part of this was due to necessity: The purchases of Action Packed and Donruss left the company in over $300 million in debt. But part was to maintain their share in a competitive, but shrinking, market. One such product was Pinnacle Mint. Released first in football in 1996 and in baseball a year later, Pinnacle Mint was designed to “cross-over” two different hobbies, but in the end satisfied neither. Packaged inside each pack Pinnacle Mint were three trading cards and two (non-legal tender) coins depicting the same players on the cards. The cards did not appeal to coin collectors and the coins did not appeal to card collectors, and the product is largely seen as a failure. Another product largely seen as a failure was the re-configured 1998 Zenith Baseball. Dubbed “dare-to-tear,” each pack came with three over-sized cards, with a standard-sized card embedded inside. In order to see what standard-sized cards were in the pack, collectors had to (literally) rip open, thereby permanently destroying, the larger card. Perhaps the most egregious gimmick Pinnacle came up with at this time was Pinnacle Inside. Introduced in 1997, the main selling point wasn’t the cards; but the 24 different novelty soup cans they came packaged in. In order to get to the cards, collector’s had to open the “pack” with a can opener.
Pinnacle Inside cards themselves were nothing special; in fact, most of the products Pinnacle made during this time weren’t either. In an effort to retain market share and pay down their debts, Pinnacle quickly rushed new product after new product, most of which followed the same formula. While some new products (like 1996 Select Certified Baseball, and its multiple levels of scarce parallels) did sell well, and their “flagship” brands (Score, Donruss, and Pinnacle) still had their devoted collectors, most of the new brands introduced were largely ignored and by the beginning of 1998, the firm was on shaky financial ground. They would file for bankruptcy and be liquidated by the end of the summer.
The Hobby, after Pinnacle

In retrospect, Pinnacle Brands’ spectacular demise was inevitable. By 1998, The Hobby as a whole (all sports) was about a third the size as it was at its 1991 peak. Foolishly, Pinnacle continued to operate Donruss as a separate entity (complete with paying for additional licenses). This, combined with the acquisition of football card manufacturer Action Packed, and the production of numerous gimmicks and sub-standard card sets, would lead to Pinnacle’s bankruptcy in the summer of ’98.
Pinnacle’s MLB/MLBPA licenses would be transferred to Pacific Trading Cards (who had held a partial license to make baseball cards, but only if they were in Spanish) and their trading card assets (including the valuable “Donruss,” “Leaf,” and “Score” brand names) would be acquired, at a bargain-basement price, by football card manufacturer Playoff Inc. Playoff, which had rechristened itself “Donruss-Playoff,” was allowed to issue two baseball card sets that were “in the pipeline” at the time of Pinnacle’s bankruptcy in December 1998, but were turned down for a full MLB/MLBPA licenses. For 1999 and 2000, the number of firms licensed to produce and distribute Major League Baseball trading cards had been reduced from six to four: Topps, Fleer, Upper Deck and Pacific. On December 31, 2000, Pacific Trading Cards’ MLB/MLBPA licenses expired. Citing the ever increasing cost of producing baseball cards, and a desire to concentrate on their football and hockey lines, Pacific chose to exit the baseball card industry. (Pacific would eventually close its doors in 2005). Two months later, Donruss-Playoff was granted licenses by both MLB and the MLBPA.
Despite the exit of Pinnacle (and Donruss), more and more card sets were still be cranked out, to a smaller and smaller base of collectors. The “Home Run Chase” of 1998 between Mark McGwire and Sammy Sosa did create for a brief time a small spike in interest, which caused the card companies to produce more sets in the late-90s/early-00s. But those collectors who were left were still avid and loyal collectors and most of the “flagship” base and established premium and super-premium level managed to sell. During this period the surviving firms continued to push the proverbial envelope in innovation and
After a decade where inserts were all the rage, rookie card collecting entered a bit of a renaissance in the late-90s/early-00s. One strategy to lure what remaining collectors there were was to purposely print fewer copies of said rookie cards and include more of them. Topps was still cutting “Steak Dinner” checks to Minor Leaguers, and putting some (but not all) of them on “Major League” rookie cards in their Bowman brands. The other card companies were still bound to the MLBPA’s GLA and could only include those players on a Major League 40-man roster. (The 40-man roster differs from the 25-man roster. The 25-man roster is a subset of the 40-man roster and includes the 25 players on the active Major League team. The 40-man roster also includes those players who are signed to Major League contracts, but have been “optioned” to the Minors. On September 1st, the Major League rosters expand to 40 active players, and those players on the 40-man roster are eligible to play. During the off-season, teams will place their best young players on the 40-man roster in order to protect them in the annual Rule V Draft. Therefore, it is possible for a player to be placed on the 40-man roster, and not ever play in a game.) Topps’ competitors, by now reduced to Fleer, Upper Deck and Pacific, exploited this loophole by issuing cards of players often within weeks of their being placed on the 40-man roster. In most cases, the player’s “true” rookie card was issued by Topps years earlier, but it didn’t stop them from flooding the market with rookie cards that weren’t really “rookie” cards.
Another strategy would be to intentionally print fewer rookie cards, as compared to the rest of the set – in effect, “short-printing” the rookies and making them almost like inserts. While this did increase the secondary-market value of star rookies; the practice of purposely short-printing, coupled with the aforementioned 40-man loophole, usually meant that the chances of pulling a truly valuable rookie card out of a pack were remote and the rookies they did pull were often marginal prospects who (as it turns out) would never amount to much in the Major Leagues. It also made collecting a complete set nearly impossible for the average collector.
For example, take Upper Deck’s 1999 SP Authentic Baseball. (Upper Deck renamed their SP brand SP Authentic a year earlier, as each 24-pack box was guaranteed to yield an “authentic” autographed card.) Like most “premium”- level brands, the set itself was small (135 cards) and concentrated on the big stars and hot prospects. The first 90 cards were all veterans, the next 30 were the “Future Watch” prospects, and the last 15 a season highlights subset. The Future Watch and season highlights cards were all short-printed to only 2700 serial-numbered copies. A collector who bought a box of 24-packs, while easily able to complete a 90-card “short-set,” would only find two Future Watch cards and one season highlight. And although the Future Watch subset does include such future stars as Troy Glaus, J.D. Drew, Carlos Beltran and Roy Halladay, none of the cards are “true” rookies (Roy Halladay’s rookies were all in 1997-issued Bowman-branded products.), and most of the other 26 players would never amount to much. Soon, other manufacturers followed suit, and began to short-print their “prospects.”
In much the same way autographed cards drove The Hobby in the 90s, card firms turned to game used cards as the big chase item. As more and more card companies began to include autographed cards, the players, perhaps exploiting the situation, began charging more and more for their signatures. Although the up-front capital costs of acquiring, then cutting up, a jersey, then mounting them on cards was immense, it was actually lower than producing autographs. A game-used jersey of a Major League player can, if cut up correctly and depending on the jersey’s size, yield about 1500 to 2000 usable swatches. For example, a typical game-used jersey of a current star player, the caliber of Manny Ramirez, can sell for about $1200. Buying a Ramirez jersey for $1200 and cutting it up into 2000 swatches is a lot cheaper than having Ramirez sign 2000 cards at his normal fee of $50 each. Card companies did not abandon autographs all together, but they focused more on rookies and prospects (whose signing fees run typically around $5 per signature) and more affordable players; leaving the costly superstars for their super-premium brands.
But the demand for autographs and game-used cards of the superstar and Hall of Fame players among some collectors was there and the card firms would satisfy this demand with more-and-more “high-end” products. In 1996, Donruss cracked the $10/pack barrier with 1996 Leaf Signature Series – the first baseball card product to guarantee an autograph in every pack. It took only five years for Upper Deck to break the $100/pack level with the debut of 2001 Ultimate Collection Baseball. Each four-pack box of 2001 Ultimate guaranteed the collector one autographed card serial-numbered to 150 copies, two game-used jersey cards serial-numbered to 150 copies, four short-printed rookie cards serial-numbered to 1000 copies or less, and a game-used card of rookie sensation Ichiro Suzuki serial-numbered to 250 copies or less.
For the rest of the decade, the remaining card firms played this game of one-upmanship when it came to premium content. In 1999, Upper Deck made news when it purchased one of Babe Ruth’s bats for $23,000 then cut it up. While this did get Upper Deck, and The Hobby, lots of publicity in the news media (much of it negative), Ruth’s bats are not especially all that rare and the one Upper Deck purchased was damaged. It was a little different a few years later when Donruss-Playoff paid $264,210 for one of only three known Babe Ruth game-worn home Yankee jerseys; then, cut it up into 2100 one-inch by one-inch pieces for use in their ever-growing roster of $20, $40, $50, and $100/pack card sets.
2001: The tipping point.

2001 would be the year that set the stage for the decisions that would happen later in the decade. It was a perfect storm of events that, for a while it seemed, appeared to lift The Hobby out of its slump. For the first time in ten years sales of sports cards (across all sports) had increased, and most of this had to do with baseball.
By 2001, the number of different card sets being produced had grown, with many of the new products of the $10/pack and up variety. While Topps continued to sign Minor Leaguers to Steak Dinner checks to load-up their Bowman brands with rookie cards, their competition continued to exploit the 40-man rule and issue dozens of “rookie” cards of marginal Major Leaguers. According to Beckett Baseball Card Monthly’s annual “Rookie Card Rolodex,” 552 players had their Major League rookie card issued in 2001. But what drove The Hobby throughout the year were two rookies: Ichiro Suzuki and Albert Pujols.
The entrance of two Hall of Famer-caliber players into baseball wasn’t that unusual; however, the fact that neither had a rookie card previous to 2001 was. Ichiro had spent his entire career in Japan, and was not eligible for inclusion in an American card set. Pujols spent only one season in the low-level Minors, and although considered a top prospect (ranked the 42nd best prospect in Minor League Baseball according to Baseball America magazine) was thought to be years at least two years away from the big leagues. When both players made their respective teams opening day rosters, and both players putting up MVP-caliber statistics, it created a historical accident. Never before in the post-Upper Deck era of The Hobby had there been two rookie players whose Rookie of the Year seasons coincided with the issuance of the rookie cards.
Pujols and Ichiro would only be two players of what many consider to be the best rookie card “Class” in baseball card history. Topps was still dealing out Steak Dinner checks left-and-right, was were able to issue rookie cards of perennial All-Star Chase Utley, future MVP Justin Morneau, and future Cy Young winner Jake Peavy. Fueled by the post-season additions to each team’s 40-man roster, Fleer, Upper Deck, and Donruss were able to sneak into their late-season sets rookies of Mark Teixeira, Victor Martinez, and Mark Prior. Unfortunately, the quest to jam as many short-printed rookie cards into one set as possible meant that for the average collector was more than likely to get David Brous, Esix Snead, or Corky Miller.
And therein lied the problem of issuing too many rookie cards. By jamming as many rookies as possible into their 2001 releases, they cannibalized their 2002 products – especially their early-season 2002 sets.
2001 marked Topps’ 50th anniversary in the baseball card business, and went all-out throughout all of their products. Perhaps most significant has the debut of Topps Heritage. 2001 Topps Heritage Baseball was designed to evoke the famed 1952 Topps Baseball set in terms of both design and composition. At 407 cards, it matched the size of ’52 Topps, and was printed on the same “cereal box” gray cardstock. Although 2001 Topps Heritage was released in only a single series, the last 97 cards were short-printed and seeded into packs at the rate of 1:2, perfectly complementing the “high-number” series of ’52 Topps. Unlike other contemporary products that had short-printed base set cards, the SPs in Topps Heritage were not all rookie cards. (In fact, it is the sole 2001 baseball card set without a rookie card of either Albert Pujols or Ichiro Suzuki.) And by seeding the 97 SPs at the rate of 1:2/packs, instead of 1:4, 1:12, or 1:24 packs as was common practice, Topps made it feasible, albeit still challenging, for collectors to build a complete set.
2005: MLB Pulls Donruss’ License

But most of the gains from 2001 were lost shortly thereafter. By 2004, total revenues had shrunk to $260 million. The card firms, fighting for survival, began issuing more and more products, if only to maintain market share. In 2004, the four MLB/MLBPA licensees had released 84 products. The secondary market had become crowded and great deals of products were collecting dust due to lack of interest.
2005 would make a year of transition and the first shoe to drop was in May when Fleer Trading Cards filed for bankruptcy. Upper Deck would purchase the rights to the Fleer brand name at a bargain basement price and continue to release baseball cards under the Fleer brand names for the next few years.
To limit the number of brands and sets, MLB and MLBPA would only issue two licenses for 2006 and beyond. Topps and Upper Deck would be chosen, and Donruss-Playoff was out. Topps and Upper Deck would also be limited to 17 baseball card releases per year. By limited the number of releases, it was hoped that the “shelf-life” of each individual product would be extended. The most radical change would be in the issuance of rookie cards. For the first time, only those players who actually appeared in a Major League game either in the present or previous Major League Baseball season would be permitted into a set. Those rookies appearing on a trading card for the first time would have a cross-brand, cross-company, “ROOKIE CARD” icon printed on all their cards. The new rookie card rules closed the “40-man loophole” that allowed Upper Deck to issued late-season “rookie” cards of players who had yet to appear in a Major League game, and prohibited Topps from including “Steak Dinner” contract signees from having rookie cards years before their Major League debut. (Topps was still permitted to sign Minor Leaguers to Steak Dinner contracts and to include them in their Bowman-branded products as inserts; and many collectors continue to treat these as rookie cards.)

2009: Topps’ Monopoly Restored