Conflicts of Interest in the Sports Card Ecosystem Post 1 - Card Companies and Collectors

A conflict of interest is a situation occurring when an individual or organization is involved in multiple economic interests with one of these interests possibly motivating them to act with impropriety in another interest. (footnote 1).  Conflicts of interest are why the President of the United States must put almost all of his or her wealth in a blind trust (e.g., The President does not know what investments he owns), so that economic decisions are not made to benefit their own wealth.  Without the blind trust, a President might be motivated to have defense contracts steered towards companies that they own.

Conflicts of interest occur in many industries or economic ecosystems because companies produce multiple products, but sometimes they can occur because of the fundamental economics of an industry create conflicts between buyers and sellers.

The conflict between card manufacturers and collectors.

As I have talked about in prior posts, it wasn’t really until the 1980s that Sports Card Collecting became a true collectors’ market, sometimes referred to by insiders as “The Hobby”.  Before the 1980s, the vast majority of sports cards were produced for the consumption of children who read their cards, played with them, tacked them on boards and eventually destroyed them.  Because nobody worried about the value of their cards, there was no conflict between card manufacturers and buyers.  Manufacturers tried to put out a product, usually with gum, tobacco or some confectionary product, and they would produce as many cards as customers would buy.  Long production runs were obviously good for the manufacturer because it meant that more gum, caramel, tobacco or eventually cards were being sold.  The business was obviously lucrative enough in the 1950s through 1970s for Topps, Bowman and Fleer to battle both legally and through signing players to contracts in an attempt to capture as much of the market as possible.  However, the customer was not poorly served, especially when these companies had competing sets at various times throughout the time period.  Competition just meant more and better cards for kids, as evidenced by the advances in both the physical size and quality of baseball cards in the 1950s.

As a side note, the only potential losers in the pre-collectible era were the players themselves, and they did not even know it.  As has been documented in a number of places, most players were dramatically underpaid for signing off on their photos for baseball cards.  While a few such as Ted Williams were able to profit more handsomely by selling their likeness to the highest bidders (e.g., the 1959 Fleer Ted Williams set), the average player in the 1960s was getting $125 From Topps for his annual license plus $75 every other year as a signing bonus until Marvin Miller became the head of the player’s union and realized how much Topps was profiting off the players (footnote 2).  Miller quickly fixed this problem.

However, once cards became part of “The Hobby” and had value as collectibles, a clear conflict emerged between card manufacturers and buyers who were now collectors and not kids who destroyed their cards.  The conflict comes from the value of any collectible being determined by the supply and demand for that collectible.  It’s basic economics, but the greater the relative demand for a particular card versus its supply will increase the amount collectors pay for the card.  It’s why we pay more money for Derek Jeter baseball cards than Bobby Meacham baseball cards.  Jeter will be in the Hall of Fame, and we want his cards, while Meacham had six undistinguished years with the Yankees.  We do not want his cards very much.

Where conflict emerged between card companies and collectors was in relative supply.  Long production runs where a card company sells as many cards as possible were still economically good for the manufacturer but not so good for the customer whose cards went down in value as production runs got longer.  Your 1989 Upper Deck Ken Griffey #1 Rookie Card was worth less as Upper Deck sold more of them.  This created the fundamental conflict between card companies and buyers.  The more cards that were printed reduced the average value of the card as a collectible if other factors were held constant such as the quality of the player on the card.  None of this mattered, of course, when cards were not collectibles, were destroyed by their owners and the value of your cards did not matter.

As I have talked about in previous posts, it was both faulty information and overly-euphoric assumptions about future supply and demand by collectors that created the Junk Wax or Junk Era from the mid-1980s to the mid-1990s (see this prior post: http://junkwaxandobservations.blogspot.com/2012/10/what-is-junk-wax-or-what-are-junk-era.html ) where there is so much supply of cards from that era still available today that the cards are almost worthless.  A major part of the information aspect of the building oversupply was that none of the companies during the junk wax era such as Upper Deck, Topps, Fleer, Donruss and Score ever published how many cards they were producing (footnote 3).  One has to believe that withholding production run numbers was purposeful.  At the start of the junk era, card companies usually had one mainstream brand of card at a single price point, as opposed to multiple brands and prices like in 2014, and they were going to sell as many of those cards as they could sell.  Collectors bought them by the case believing that they would sky-rocket in value just as vintage cards like 1950s Mickey Mantle cards had rocketed in value.  If they had known that Upper Deck printed over 4 Billion baseball cards in 1991 (footnote 3), they might have tempered their euphoric buying after thinking about how all these cards were being preserved by their owners.  Thus, publishing print run numbers only could have helped pop the sports card bubble earlier.

While the card companies had no legal obligation to publish print runs, it clearly shows the conflict of interest that existed between card companies and collectors.  Card companies made more money by selling more cards.  However, the more cards that exist hurts the value of their customers’ collections.

This conflict of interest was taken to the extreme by managers at Upper Deck in unethical fashion.  In his 1995 book Card Sharks, Pete Williams builds a very convincing case from interviews with former company executives and industry insiders that Upper Deck executives would have the plant managers reprint certain cards, even supposedly out-of-print cards, that were selling for large amounts on the secondary market.  The executives would then sell these extra cards for personal profit through dealers and other intermediaries.  Since these cards were the same as the originals and off the same presses, they went into the hobby and some probably into your collections.  They can never be known as counterfeits. (footnote 4)

What this scheme did was put big money into the pockets of Upper Deck insiders at the expense of their customers.  Their customers lost because the increased supply of high-value cards reduced the value of customers’ collections.  Such behavior is, of course, unethical because it is cheating your customers.

Today – The uneasy relationship between companies and customers.

Because cards are generally preserved by the collectors that purchase them today, it is hard to create scarcity.  Any form of scarcity is artificially created by the card companies by having certain high-end brands with limited production runs and various types of inserts that are often numbered.  I like the idea of numbered inserts (e.g., 004/125 on the back of the card) because it acts as sort of a warranty from the manufacturer of a card’s scarcity.  Any card manufacturer who printed many duplicate numbers on the backs of cards to increase supply would likely get caught due to the ability of eBay and the internet for card traders to share information.

Yet, because all scarcity is artificially created, the card companies are put in a tough position to try to deliver what collectors perceive as value (e.g., cards scarce enough to be worth their money) but still produce enough product to make a profit.  Because a card company’s input costs are high in terms of licensing fees (please see my earlier post: http://junkwaxandobservations.blogspot.com/2012/08/how-sports-card-royalties-work.html ), they are increasingly squeezed on their margins, which is why we have seen so many of them disappear in the past two decades.  Profit comes from either high volume with OK margins or very high margins with lesser volume.  The proliferation of brands at the major companies and the sky-rocketing costs of packs of higher-end brands indicates that the profits seem to come from the high-end of the market, which is consistent with a smaller, collectibles-based set of customers.  While Topps and Panini (with Score) have their high-volume, lower cost mainstream products, I suspect that the profit is more in the top-end of the market.

Whenever I read product reviews of new card sets that comes out each year on Cardboard Connection or other sites, the reviewers tend to focus quite a bit on the "value" they see in a new release.  Value obviously means bang-for-the-buck in terms of collectible value versus the price one pays for a pack or box of cards.  Sometimes, the reviewers make it seem like the card companies can produce value upon command, and the reviewers are disappointed when that value does not jump out of each pack.  The problem with this perspective is that creating value actually takes money.  Smaller print runs, great autographs and smaller-numbered inserts all increase production costs tremendously.  Therefore, creating value while making a profit is difficult.  This makes being a card company an difficult task because they must create enough value for collectors but the cost of generating that value must be less than its value to The Hobby.  This creates an uneasy relationship.

End Note

Like all other posts, please feel free to make comments.  I review all comments before they are posted in order to reduce spam and keep things on topic.  Also, it may take me a few days to review comments.

Footnotes:

1. Conflict of interest definition adapted from: http://en.wikipedia.org/wiki/Conflict_of_interest

2. Williams, P. 1995. Card Sharks: How Upper Deck Turned a Child's Hobby into a High-Stakes, Billion Dollar Business. Macmillan Publishing, New York. p. 24.

3. Williams, 1995, various pages.

4. Williams, 1995. Chapter 14 of the book is dedicated to the Upper Deck reprinting scandal.

Dead Men Don’t Wear Plaid, But Phil Esposito did Wear Plaid in his early 1970’s Hockey Cards

Occasionally, some sports cards are memorable because of their oddball nature or when something just seems out of place.  Ask any person who was an avid hockey card collector in the early 1970s like me if there was anything strange about Phil Esposito’s cards.  They will say: “the plaid pants”.  It’s funny, but a lot of my friends who collected remember the ridiculous plaid pants that were visible for three years of Esposito’s cards in 1970-71, 1971-72 and 1972-73.

Caption: Above is Phil Esposito's 1970-71 Topps card.  That must have been a sweet leisure suit he was wearing before the photo shoot.

It all started with the 1970 hockey set for which Topps, and their affiliated O-Pee-Chee Canadian partner, decided to get new photos of virtually all players for the 1970 card hockey issue.  The photos were likely done in a studio or conference room because the players’ silhouettes appear in front of the solid backgrounds that in the 1970-71 set also had what seem to be added ‘spotlights’ around the player’s body.   The studio nature of these shots can also be testified to by the fact that most players, other than goalies, are not wearing shoulder pads under their jerseys with a few exceptions.  Most goalies did seem to bring all their equipment with Ken Dryden notably wearing his mask unlike the other goalies in these cards (maybe his shot wasn’t a studio shot).

Caption: Above is Phil Esposito's 1972-73 Topps card.  This was the last year that his plaid pants were visible.

Apparently, when some of Boston Bruins showed up, it must have been a totally half-baked affair (or maybe the players were half-baked).  Either somebody forgot black hockey pants for part of the shoot or Esposito refused to wear them.  It was more likely the former case, because Ken Hodge was shot in his street pants also with that photo only appearing in the 1971-72 set with different, closer-up shots of Hodge used in the other years where his pants did not show.  Maybe Hodge refused to wear them too.  Who knows?

However, this biggest piece of evidence of systematic disarray at the photo shoot theory is that at least five different Bruins appear in the 1970-71 set in wearing Fred Stanfield’s hockey gloves.  The Bruins team put their player’s numbers on their gloves, and Fred Stanfield’s #17 gloves are worn in the photos of Stanfield, Ken Hodge, Phil Esposito, Wayne Cashman, Garnet Bailey and Ed Westfall.  All other Bruins players, like Bobby Orr, are photographed wearing their own gloves if the numbers are visible on the cards.

Caption: Above is Ken Hodge's 1971-72 Topps card.  Ken also joined the no-hockey-pants brigade for one year.  Note that he is also wearing Fred Stanfield's #17 gloves like Phil Esposito.

The fact that Esposito was a great player and future Hall of Famer made the plaid pants all the more noticeable.  When you were a kid in the 1970s, Espo’s card was one of the ones you read, looked over and maybe taped on your wall.  Those plaid pants were just weird.

By the way, if you do not remember, Dead Men Don’t Wear Plaid was a swing-and-a-miss old detective movie spoof comedy that was a collaboration between Carl Reiner and Steve Martin in 1982.

 End Note

Like all other posts, please feel free to make comments.  I review all comments before they are posted in order to reduce spam and keep things on topic.  Also, it may take me a few days to review comments.

1970s Topps Football Cards – Sweaty Guys and Airbrushed Pictures

Topps baseball sets in the early 1970s showed many design innovations like (1) the beautiful black bordered 1971 set, (2) the groovy, hip 1972 card designs, and (3) the 1975 bold color and mini-test-market designs.  These sets were eye-pleasing with mostly good, clean staged photos of players with occasional in-action shots.  As a result, many 1970s Topps baseball sets are still sought after by set builders today.  Thus, despite Topps being a monopoly in baseball cards, product designs were generally fresh in the early 1970s.

In football, Topps went in the opposite direction.  The football card sets basically were pretty awful with the exception of the 1972 design, which built on the bold block lettering and bright colors similar to many late 1960s and early 1970s consumer products.  However, in my opinion, Topps football cards of this era were really just below par because the pictures were not very good.  There was a reason that the pictures on football cards were bad throughout most of the 1970s.  As a cost savings measure, Topps only licensed from the National Football League Players’ Association (NFLPA) and dropped licensing from the NFL from 1970 through 1981 (footnote 1).  As a result, football cards could not show any team logos or other NFL copyrighted images (see my earlier posting here on how licensing works: http://junkwaxandobservations.blogspot.com/2012/08/how-sports-card-royalties-work.html ).  Football cards would have to be produced without using any NFL licensed material.

Why would the Topps Company go without an NFL license?  Obviously, it saved them money, but the main reason Topps could undertake such a money-saving move was their monopoly position in sports cards in the USA in the 1970s.  While Topps had only the MLB players locked up by contracts and thus entry was possible in other sports, very few other companies seemed to want to enter the sports card business, possibly because they could not enter the baseball market, which was the major market by size at the time.  There are likely economies of scale to producing cards for a number of sports rather than just one sport.  You can allocate the capital cost of printing presses, salaries of card designers and general overhead across print runs for multiple sports year round.  For a market as small as sports cards, not being able to market baseball cards to anchor your cost structure was a fairly significant problem (footnote 2).

Anyway, the lack of an NFL license in the 1970s meant that pictures of many players would have to be close up still photos, posed shots or airbrushed action photos.  The photos would need to be airbrushed to clean off all the NFL trademarked team logos to avoid infringing upon NFL-owned properties.  While airbrushing and working around logos is common in the sports card trade, Topps position as a monopolist seemed to make them lazy in the production qualities of the 1970s cards with the pictures on the front especially suffering.  The quality of the airbrushing work was not very strong with colors often not quite matching team colors.  Also, by the late 1970s, a large number of football card pictures seemed to be close up shots of players on the sidelines staring off into space.  These were easy photos to take and did not require much airbrushing to clean up if taken at an angle where no copyrighted logos could be seen.  However, as a result, we have lots of pictures of sweaty players doing nothing.

Caption: Nick Mike-Mayer gets the almost neon green airbrush job of his Eagles helmet in his 1978 Topps card attempting to join Marvin the Martian.  “That makes me very angry.” says Marvin.

When firms are monopolists, they can provide a fairly lousy product or service and charge a high price for it without worrying about competition.  In terms of quality, the monopolist has to produce a product at a quality level that is just high enough to keep customers buying the product since sports cards are not a necessity.  Topps also expanded the size of their football sets in the 1970s, thus making any set builders buy more of their poorly designed cards.

Caption: 1978 Topps Football Cards. Stu Voigt in a posed photo still has a monstrous cowlick.  Give the guy a comb.  On the right, Joe Lavender apparently was reading a good novel on the sidelines.

The 1978 Topps football set represents the low point in picture quality in my opinion.  Now, it did not help the situation that the hair styles of the time were long hair or big afros.  This made football players all the more sweaty or unkempt.  However, we often see in Topps baseball cards from the same era, very nice posed shots of players who have big clean afros or washed hair.  Also, the baseball cards had much better use of lighting without players’ faces being in shadows.

Caption: 1978 Topps Football Cards. Ron Saul and Oliver Davis stare aimlessly off into space.  For some reason, the top of Davis' head has been cropped off.  Apparently, he has too much hair.  Love those sideburns!

Why Topps 1970s baseball cards were so much better than football cards in production values is possibly puzzling since Topps was a monopolist in both products.  One explanation might be that because Topps had a license that paid MLB with royalties that the baseball league gave Topps greater access to players or possibly even demanded better quality.  The NFL had no direct financial stake in Topps' 1970s products, so football teams may have been less accommodating.  Another possible explanation might be that Topps didn’t spend much on the photos because of the size of the market for football cards did not make it cost effective.  A third possible explanation would be that in the late 1970s that Topps card designs deteriorated in general across all sports and that football deteriorated more quickly because of lesser attention by Topps.

In the early 1980s, Topps’ design and photo quality in football cards became much better.  In 1981, Topps introduced a subset of cards in their football set called Super Action cards that had very nice photos of game action.  In 1982, they signed a license with NFL properties and could shows players in their uniforms without airbrushing out team logos.  This made both action and sideline photos easier because the photographer did not have to worry about capturing “too much logo” in any shot that would have to be subsequently airbrushed out.

 End Note

Like all other posts, please feel free to make comments.  I review all comments before they are posted in order to reduce spam and keep things on topic.  Also, it may take me a few days to review comments.

Footnotes

1. http://www.cardboardconnection.com/1970-topps-football-cards

2. Additional evidence of the economies of scale theory would be the short-lived tenures of both Fleer and the Philadelphia Gum Company in the football card market in the 1960s.  Fleer produced cards from 1960 to 1963 for the upstart American Football League (AFL) with Topps having the NFL contract.  When Fleer was sued by Topps in 1963 for beginning MLB baseball card production (and had to stop producing cards after printing their first 66 card series), they did not seem to pursue aggressive renewal of their AFL rights.  I suspect that being denied entry into baseball card market limited the attractiveness of making football cards.  Surprisingly, Philadelphia Gum Company backroom-dealed Topps to get sole NFLPA rights in 1964, which sent Topps scrambling for the AFL players’ rights, which had previously belonged to Fleer.  Philadelphia Gum Company exited with sort of a whimper after the AFL and NFL merged and the NFLPA awarded Topps sole rights to NFL players’ images in starting in 1968.  There is no evidence that Philadelphia aggressively tried to outbid Topps, so I suspect that producing football cards alone was marginal economically (see: http://www.psacard.com/Articles/ArticleView/5019/collecting-the-1966-philadelphia-football-card-set for more on Philadelphia cards from the 1960s and discussion of these contract issues.)

That Insane Autograph Set: Collecting 1997-98 Be A Player Autographed Hockey Cards

Introduction (This is a revision of an earlier posting from 3 years ago.  I would like to thank an anonymous reader named Mike for alerting me to the foil-color-based identification of the manufacturer autographs)

As noted in previous posts, autographs are by far the scarcest commodity in sports card collecting.  Obviously, card companies can make limited runs of game-used jerseys or other types of unique, low-print run inserts, but the willingness of a player to sign his or her name and is by far the most limiting aspect of card production.

Indeed, it is the scarcity of autographs that makes the 1997-98 Be A Player hockey set so amazing to many die-hard collectors.  Because most of the cards in the set had a very large number of autographed parallel cards, it is possible to put together almost the entire set with autographs.  I currently own all of the possible 249 cards with autographs that could be pulled from packs.  In this posting, I will give a history of this set and discuss some of its quirks and great characteristics.

The early history of the “Be A Player” brand

The “Be A Player” brand is a property of the National Hockey League Players’ Association (NHLPA).  Back in 1993-94, the NHLPA contracted with Upper Deck to produce the Be A Player brand without NHL licensed trademark logos as a way to produce another revenue stream for the NHLPA. (footnote 1)  Because the NHLPA and NHL have gone through a series of strikes and lockouts over the past 25 years, the brand was started largely a way to hedge some extra money for the association and players in case of a work stoppage.  In 1994-95 and 1995-96 Upper Deck produced sets with the innovation of having one autograph card per pack.  This was an insanely great bargain for collectors at the time because the packs were actually not that expensive as a mid-priced product.  With the 1994-95 season starting with a long-planned lock out by the NHL owners, NHL players probably had a lot of both time and incentive to sign cards for the first year of Be A Player cards.

The 1994-95 Be A Player set was 180 cards with one autographed parallel card per pack.  From what I know from talking or emailing with people over the years, only 178 cards were available in autographed form with common players signing around 2400 cards each and star players signing less.  Wayne Gretzky was the key autographed card in the set, and Gretzky’s card was super-short printed (SSP).  Upper Deck applied stickers to the back of the autographed cards thus indicating their authenticity.  Upper Deck expanded the set to 225 cards in 1995-96, but I do not know if any players’ autographs were missing from the set (any help I can get here would be appreciated).  Similar to the prior year, there was one autographed card per pack, which was an insane bargain.

In 1996-97, the NHLPA shifted the Be A Player name brand to Pinnacle Brands.  Pinnacle expanded the set to include insert cards that could also be found in autographed format.  These insert series were titled “Biscuit In The Basket”, “Link To History”, and “Stacking The Pads”.  In what would become an ominous sign for the future, Pinnacle did not put stickers or other authenticating marks on the backs of the cards to indicate that the autographs were authentic.  I do not know much about the numbers of cards signed in this year and have not seem many cards from the set.  I assume Pinnacle made it so that one could identify manufacturer autographs with the color of foil on the card.

The 1997-98 Be A Player set

By 1997, Pinnacle Brands was in a lot of financial trouble.  They had entered the sports card industry when it was booming in 1988, but the Junk Card Era of too many card manufacturers was about to take Pinnacle as a victim.  This showed in their execution of the 1997-98 Be A Player set.

While the set was expanded to two series of 125 cards (Series A and Series B = 250 total cards) plus inserts, the execution of the set left a lot to be desired.  Again, autographed cards were inserted one-per-pack but did not have stickers or different back marking authenticity as a manufacturer autograph.  The way that one tells manufacturer-autographed cards from other cards is by the color of foil used in the player's name and the Pinnacle logo.  Gold foil indicates an autographed card that was certified by Pinnacle and pulled from a pack.  Silver foil indicates a base card that should be without an autograph.  If one finds an autograph card with a silver foil name and logo, the card is either a forgery or was signed in person after being pulled from a pack as a base card.  This situation can make identification confusing as one comes across these cards.  Because Pinnacle vanished into bankruptcy, there is no web site or published guidelines to tell collectors 20 years later about the foil color differences.

Caption: Eric Lindros #1 base card is on the left.  Note the silver foil ink used to print his name and the Pinnacle logo.  On the right is an authenticated Brett Hull autographed card.  Note the gold foil ink used to print his name and the Pinnacle logo.

When Pinnacle ran into financial trouble in 1998, much of the production from Series B was left in limbo in boxes in the Pinnacle warehouse (footnote 1).  This problem with Series B has actually been a blessing to collectors interested in completing the set today.  Because these boxes were sold off to distressed merchandise liquidators and other parties, it took them longer to work their way into the system to be available to collectors.  Indeed, unopened boxes of both series still sell for around between $55 and $100 on eBay (checked 12-9-2016) and are a bargain at 16 autographs-per-box, which is insane by today’s standards for a middle-market product.

Attributes of the Set

The hit rate per pack for auto and inserts was:

Autographs 1:1 (These are autographs on any version of the card, regular or die cut)

Die Cut Autographs 1:7

Prismatic Die Cut Autographs - 100 sets made

One Timers 1:7

Stacking the Pads 1:15

Take A Number 1:15

However, this is where things get a little weird and you have to know something about the set.  First, none of the “One Timers”, “Stacking the Pads”, or “Take A Number” insert cards were autographed.  This was a change from previous years.  Second, certain cards were extremely short-printed.  Basically, Eric Lindros only autographed the Prismatic Die Cut cards, so there are only 100 Lindros autographs in existence in this set. (This observation on Lindros comes from an old card dealer with whom I have emailed.  I have never seen it written anywhere.)  Die cut cards have the word PLAYER cut in them along the right border.  Prismatic die cuts are harder to find than foil die cuts with a print run of 100.  When Lindros #1 autographed 1997-98 Be A Player prismatic die cut cards occasionally change hands on eBay, they go for hundreds of dollars despite Lindros never making it to the Hall of Fame due to injuries.  Again, set makers know the Lindros Die Cut Autograph is the scarce card in the 1997-98 Be A Player set.  Indeed, you can buy an Eric Lindros certified autographed card from other sets for under $5.00.

Caption: Eric Lindros #1 Prismatic Die Cut is the hardest autographed card to get in the series.  Only 100 were produced. I had the Lindros autograph authenticated by SGC along with all the Hall of Fame caliber players' cards because they do not have stickers or holograms guaranteeing their authenticity. 

Another anomaly in the set is that no known factory-autographed version of #18 Bryan Berard has ever surfaced in regular or die cut format.  There is no known reason for this omission.  1997-98 was several years before Berrard received a horrible eye injury that cut short his playing career, and he was not between teams that year.  One just has to believe that Berard never signed his cards or that Pinnacle never sent them to him.  They may have thought they would insert them in Series B, but financial trouble kept them from following through.  Who knows?

What makes the 1997-98 Be A Player autograph set fun to try to piece together is (1) it can be done (with the exception of Berard’s and to some extent Lindros’ cards) on a relatively tight budget and (2) that it was such an insane undertaking in 1997-98 by today’s standards.  Getting so many autographs from so many players would likely cost a fortune today and the prices of packs would have to be astronomical.

Overall, one can build a series of most of the common autographed cards in this series on eBay quite quickly, even in 2016.  The series is stacked with lots of minor players who signed a ton of cards.  I have seen 100 autogrpahed card lots go for $30 plus shipping.  The tougher autographs, outside of the Lindros Die Cut, in the series are Martin Brodeur, Brett Hull, Joe Sakic, Al MacInnis, Ray Bourque, and Ed Belfour.  I believe that all of these cards, except maybe for Al MacInnis, were short printed.  There are lots of semi-stars in the set like a young Joe Thornton and Tomas Holmstrom but their cards are pretty plentiful.  Since Pinnacle is not in business, only people that have the original print run specifications for the set, who might have been dealers, would know.

Caption: Ray Bourque #248 and Martin Brodeur #2 are short-printed autographs in the set.  They are still surprisingly affordable on eBay at around $30.

In buying 1997-98 Be A Player autographed cards on eBay, bidders should take care.  Because the cards do not have stickers, holograms or printing on the back saying they are an authentic autograph, there is the chance of forgery.  Make sure that the autographed card has a gold foil ink name and logo and not silver foil ink.  An autographed silver foil card is very likely a forgery.  However, any die cut cards' autographs must be genuine because die cut cards (either foil or prismatic) were not issued without autographs.

The good news for most players' regular-issue cards in the set is there is not much economic incentive to forge signatures because the players were not major players and they signed a ton of cards.  There are plenty of the cards around for little money of these players.  For the bigger names, look for the gold foil or try to pull them directly from packs yourselves.  Since you can still find boxes of 1997-98 Be A Player cards around, this is possible.  Also note that all 1997-98 Be A Player autograph hockey cards were signed with black permanent sharpie-type ink with a relatively thin pen line.  Several cards have slightly wider pen signings, but still in black color.

Also, never purchase an Eric Lindros #1 autographed card that is not a prismatic, die cut card. If anybody owns a gold foil regular issue Lindros card, please send me a scan, and I will update this posting.  While that situation is possible, any buyer should be wary.  All other cards in the set are available in autographed format in their regular version (e.g.,  not a foil die cut or prismatic die cut).

Postscript

After Pinnacle’s Bankruptcy, the Be A Player brand was shifted by the NHLPA to a company started by Dr. Brian Price and was produced in 1998-99 before the NHLPA decided to change the name of their authorized brand to “In the Game”, which eventually became the name of Price’s company.  In 2005, the Be A Player brand was resurrected when the NHLPA broke away from the In The Game company and re-signed with Upper Deck.  However, Upper Deck has not produced Be A Player branded cards since the 2009-10 series.

End Note

Like all other posts, please feel free to make comments.  I review all comments before they are posted in order to reduce spam and keep things on topic.  Also, it may take me a few days to review comments.

Footnotes

1: http://prezsez.wordpress.com/2011/06/10/could-this-be-the-end-of-be-a-player-trading-cards/

Buying Hot Rookie Cards on eBay: A Bad Investment

Preface

As with other postings, I again want to emphasize that sports cards are a lousy investment.  Buy sports cards for any other reason than to make money.  Buy them because you love sports, admire a certain player, love to make sets or any other reason than to make money.

The Hot Rookie or Young Player

Rookie cards are the currency of sports card collecting in the modern era.  After the market for sports cards shifted from being a market for children to a collectables market at the beginning of the junk wax era in the mid-1980s, the only cards that have high value are rookie cards of famous players.  The best evidence of this fact is to open an issue of the Sports Market Report or go to PSA’s web site at look at the value of cards from recent years (go to: http://www.psacard.com/SMRPriceGuide/ ).  Only Rookie Cards in High Grade (PSA 9 or 10) are very valuable.

Why are rookie cards worth more?  To somebody not in the sports card hobby, this is actually a legitimate question.  The answer is that having a rookie card means that you have a card of a player before they became famous at professional sports.  It’s usually a player’s first chronological card, so there is no ‘sports card history’ of that player.  In other words, you have a card of that player from when he or she was just some ‘Joe Schmo’ and not on the cover of GQ.  Also, a player’s rookie year is likely to be the year where the least number of cards are printed of the player.  Any player that is a star in their rookie year has increased number of cards printed of him or her in subsequent years because of increased popularity.  For example, Panini Prestige printed a complete seven card special insert series of Tim Tebow cards in their 2012 Prestige series just largely because he’s Tim Tebow.  Supply expands to meet demand.

Caption: The Hot Rookie card: 2011 Topps Chrome Colin Kaepernick Black Refractor auto /25.  This card sold on 1-20-2013 on eBay for $1500.00 in an auction that garnered 31 bids.  Kaepernick has started 1/2 the season and has led his 49ers team to the Super Bowl in his 2nd year in the NFL.

As a matter of fact, not even all rookie cards of great players are valuable.  Because Panini, Topps and Upper Deck have so many brands (Prestige, Chrome, Finest, Score, UD, Rookies & Stars, etc., etc.), there are literally dozens to hundreds of different rookie cards of various players.  Again, this is an example of how supply has expanded to meet demand and thus the average price of a rookie card for any player goes down.  Indeed, players that emerge during their rookie season can even have more cards printed of them in late-season card series, which is again an example of supply expanding to meet demand.

The one exception to this supply expands to meet demand rule is autographed rookie cards.  There is a reason that all the valuable hot rookie cards are now only autographed cards.  Autographed cards are limited to the number of cards that a player can or is willing to autograph for the various card companies.  While a player can obviously sign thousands of cards (or the little autograph stickers that are put on cards), the player cannot sign nearly as fast as printing presses churn out new non-autographed cards.  Also, players get tired of signing cards; machines do not get tired of printing them.  As a result, autographed cards become the scarce rookie card commodity.  Again, look at SMR or PSA’s web site at the value of great young players' cards from recent years across all sports.  The only rookie cards that have very high value are the autographed cards.

Buying Rookie Cards of Hot Players

This brings to the front the question of how does the collector acquire valuable rookie cards?  There are two basic ways.  First, the collector can buy new packs and boxes of a card company’s new issues in hopes of snagging one of the randomly inserted autographed rookie cards.  Premium card brands tend to have more rookie autographed cards inserted, which is why the collector pays more-dollars-per-pack for the premium cards.   The card companies also aggressively advertise the “hit-rate” per box of autographs with brands like Bowman Chrome and Bowman Draft Prospects topping the baseball rookie card brands because of aggressive signing of young prospects to autograph contracts.

The problem with buying packs and boxes, however, is that the collector has to roll the dice with Lady Luck on getting hot rookie autographs.  Your chances of getting a hot rookie autograph are much less than getting a card autographed by some “good player” who is not a rookie and thus has 15,000 autographs floating around on existing cards.

Second, and more commonly, the collector can go on eBay (or some other site like Beckett’s Marketplace) and buy a hot rookie autograph card from somebody who was lucky enough to get one in their packs or boxes.  This seems easy enough.  You pay the market rate for the hot rookie’s card, it gets shipped to you, you get to own it, and you capture its future appreciation in value as the player in question wins Super Bowls, scores hat tricks, hit home runs or whatever he or she does.  If it was so easy……

It’s not.  When you buy a hot rookie on eBay, you enter a market where the value of the hot rookie card is tremendously over-inflated as an investment due to non-rational thinking.  Markets and emotions do not mix very well, and the sports card market is one that is jet-fueled by emotion and speculation.  For example, most sports card collectors love sports and have emotional attachments to particular teams and particular players.  I personally think this is a good attribute of collectors and sports cards, but it is a bad recipe for investing.  For example, what makes us search for the highest yield in Certificates of Deposit (for those of us with savings) is that we have no emotional attachment to the financial institution that takes our money as long as they are FDIC insured.  This attribute is what makes the market for Certificates of Deposit so competitive and efficient with relatively low-profits for banks.  We rationally search and take the highest interest rate.  No emotion, no mistakes, pretty rational.

Here’s why the market for hot rookies is irrational:

1. It suffers from hype.  ESPN and the culture of 24 hour media attention raise the profile of young rookie players who are doing well.  They get a disproportional amount of media time.  Also, marketers, looking for the next young star to lock into their advertising plans, tend to make younger stars the focus on their advertising.  For example, how many times have you seen Robert Griffin III on television advertisements this year?

2. It suffers from distorted supply.  For example, let’s say that Robert Griffin III (RG3) does go on to become a Pro Football Hall of Fame Player and is enshrined in Canton, Ohio.  In this case, RG3 would end up signing about 100,000+ more football cards over the rest of his career as supply would rise to meet demand.  This would have a severe effect on the price for autographed RG3 cards.  While there would still be the same number of autographed RG3 rookie cards in existence as today, some of the demand for those cards would be siphoned off by people that just want an autographed RG3 card, just not necessarily a rookie card.  Those people in 2012 have to chase the smaller number of RG3 rookie cards on the market.  In the future, they can chase the any of the 100,000+ cards signed in the future.

3. It suffers from biased expectations of the future.  Psychology shows that there is a human tendency to extrapolate today’s norms into being the future’s norms and to underestimate the chances of bad events happening.  So, for example, because football players like Colin Kaepernick, Andrew Luck and Robert Griffen III had great years this year as rookies (or a 2^nd year player in the case of Kaepernick), the estimates of their future accomplishments by many of the buyers on the market assume continued high performance into the long term future.  This is not likely the case.  Without examining the merits of any of the three players, history suggests that injuries, loss of skills, regression to mean performance, off-the-field events or poor coaching will keep them out of the Hall of Fame.  While I am not a betting person, the odds are probably 1-3 that not one of them ever makes it to the Hall of Fame.  While they have shown they are great players for a short period of time (i.e., one season), Hall of Fame credentials are built over a decade of strong performance.  In the short-term 24 hour media world that we live in, nobody is thinking ahead a decade.

Because of these three market anomalies and collectors' emotional attachments to players and teams, the market for hot rookies itself is way too hot or super-inflated.  Prices rocket upward to the point that even if the player go on to make the Hall of Fame, the card probably does not gain too much in value in the future or even drops.  Given the odds of not making the Hall of Fame in any sport, buying hot rookies is an investment huge negative expected value.

Some Evidence

If you do not believe the thesis of this post, let’s look at some data.  I went over to the shelf and pulled out SMR magazine from February 2007 (5 years ago).  On page 92, the valuable PSA graded rookies from 2006 football card issues are listed (similar to how 2012 football card issues would be listed in February 2013 SMR today).

The players whose cards were valuable were:

Jay Cutler

Matt Leinert

Reggie Bush

Vince Young

DeAngelo Williams

AJ Hawk

Their autograph cards in PSA 9 condition were listed as being worth anywhere from $140 to $345. (footnote 1)

Here are some comparisons from eBay today:

2006 Donruss Elite Reggie Bush #204 Auto /100

Last sold on eBay in BGS 9 grade for $25 including shipping on 11-12-2012

SMR in February 2007 was $275.00 in PSA 9.

2006 Donruss Elite Matt Leinart #192 Auto /100

Last sold on eBay ungraded for $13 including shipping on 11-21-2012

SMR in February 2007 was $140 in PSA 9.

2006 Donruss Elite Vince Young #221 Auto /100

Last sold on eBay ungraded for $11 including shipping on 1-22-2013

SMR in February 2007 was $150 in PSA 9. (footnote 2)

While one could argue that 2006 was a particularly bad year for rookie cards of football players, it is an example of how hot rookie cards depreciate in value over time on average.  Players who are hot and the next Joe Namath usually are not. (footnote 3)

Occasionally there is the breakthrough player like Tom Brady, who was drafted in the fifth round and whose cards continue to have high value over time.  However, if you are a veteran collector, by the time you realized that Tom Brady was a great player his rookie cards had already taken off in price.  And for every Tom Brady, there are 25 Matt Leinarts.

What to do?

As I said before, collect great rookie cards for any reason other than trying to make money.  Buy a Colin Kaepernick rookie card because you love the 49ers and you want a piece of history related to their run to the Super Bowl in 2012-13.  Buy a Tim Tebow rookie card because you are a Florida Gator fan or like what Tebow stands for in his religious beliefs.  Buy an RG3 card because you like his pencil mustache and he won the Heisman Trophy.  Just don’t buy their cards to make money.

Also, if you build sets like me, you might want to focus on building sets where there are autographed inserts of rookies.  If you hit a hot rookie auto in a pack or box by chance, it can often finance building the entire base set plus some inserts if you sell it.

If you are not going to hold a hot rookie card for a long time, one can always try arbitraging the market.  That would entail buying a rookie when the price is low and quickly reselling if and when the price goes high.  Again, I do not think this is a good way to make money.  You either need to have insight into NFL talent that other people do not have or you are just playing roulette with your money.  It's better to buy a good low-risk mutual fund.

End Note

Like all other posts, please feel free to make comments.  I review all comments before they are posted in order to reduce spam and keep things on topic.  Also, it may take me a few days to review comments.

Footnotes

1. PSA 10 cards of these 2006 rookies were worth much more, but these should not be considered due to the almost impossible-to-understand nature in which PSA 10s are handed out by PSA.

2. Data was taken by looking at all the completed auctions for 2006 Donruss Elite cards on 1-31-2013.  Donruss Elite was chosen because it was a medium-to-high end brand with autographs only being numbered to 100 on the cards.  It was one of three brands listed in the February 2007 SMR where cards had reported values.

3. It should be noted that Cutler’s autographed rookie cards still hold some value as reported in SMR.

1991 Pro Line Football Portraits: The Worst Junk Wax Set Ever

Prologue

Sorry about the long delay between postings.  Work has been busy.

A Really Bad Set of over 300 Cards

In previous posts, I have talked about the Junk Wax or Junk Era for sports cards that ran from the mid-1980s to the mid-1990s.  During this era, the sports card companies went crazy producing virtually any kind of set that was eaten up by the customer, which had changed from kids to collectors.  A lot of really bad sets were produced in this era, because mostly anything that was printed basically ended up selling OK with hoarding collectors.

The 1991 Pro Line football set is the worst-of-the-worst in my opinion because it took sports cards farthest away from anything that a kid or even a sports fan would want to own.  In the 1991 Pro Line football set of 300 cards plus some inserts, there are:

1. No action pictures.  Most of the poses were sort of ridiculous vanity shots that kids sometimes now get for their high school yearbooks.  The pictures seem to have little connection to the players, their personalities or their positions.

2. Almost no player information on the backs of cards.  Instead, there are inane paragraph-long observations by the player profiled about what it’s like to be a rookie or star or whatever.  The cards had no stats, no schools, no player measurements, and no player trivia.   They were worthless for player information.

3. Most of the cards shamelessly display players wearing official NFL-licensed merchandise.  This set was more of a catalog for officially licensed NFL merchandise than a football card set.

4. A special subset had player’s wives showing off the officially licensed NFL women’s wear.  Player’s wives?!?!?

Caption: On the left, Erik Howard of the Giants displays his officially licensed NFL T-shirt and shorts while seemingly trying to hold in a massive dump.  On the right, Eric Allen shows off his flat-top haircut, officially licensed NFL Eagles warm up jacket, and officially licensed NFL Zuba Pants while sitting in front of what looks like the entrance to a Men's Room at Veteran's Stadium.  I own and keep these several cards only for their schlock value.

Why?

This set was the brainchild of a person at NFL Properties, which was the producer of the Pro Line set and not a sports card company.  Printing and distribution had to have been outsourced to other parties.

I can just see the conversation at NFL properties that got this set going:

Executive #1:  We should go directly into the sports card business.  Those things are selling like hotcakes.

Executive #2:  Yeah.  People will buy anything.  Donruss put out this crappy baseball set called ‘Studio’ this summer with pictures of players that looked vanity shots from a high school year book.  People bought’em. (footnote 1)

Executive #1: Really? No way.

Executive #2:  Yep.  And the best part is you don’t have to spend money on game photographers or even going to games.  You just take artsy looking still shots of players.

Executive #1: What if we put the players in NFL merchandise?  The commissioner says we need to sell more of that stuff.

Executive 2: What about the women’s merchandise?

Executive 1: The players have wives don’t they?

Executive 2: Awesome.  You’re a genius.

And so this atrocious set was born.

Caption: On the right, Jennifer Montana’s rear end is used on this insert card to hawk the NFL’s ‘Spirit Collectible’ line of women’s clothing.  On the left, Babette Kosar models a ‘Spirit Collectible’ team jacket while contemplating how she will have to divorce her husband Bernie when he burns through all his money.   I own and keep these cards only for their schlock value.

In Reality...

In terms of history, the 1991 Pro Line set did create some friction between the NFL and the Player’s Association (i.e., the NFLPA or player’s union).  The sports card companies had been getting legal permission to use the players’ images through the NFLPA and were paying royalties to the union.  NFL Properties went directly to the individual players in the 1991 Pro Line set and each was paid $5000 for participating and signing off on their image rights for this set (footnote 2).  The relationship between the NFL and the NFLPA was already icy in 1991, so NFL Properties probably saw no need give the union more money, because such money was often used to file lawsuits against the NFL.  No independent card company would have likely risked the wrath of the NFLPA in signing so many players directly and not going through the union.  Such a company would have risked not getting a license from the union in future years if the direct-to-players move did not work out.

In defense of the 1991 Pro Line set, it did have one innovation, which was putting autographed versions of the cards (about one-per-wax box) in the product.  Also, the autograph cards contained stickers or stamps to verify that they were genuine, which was ahead of its time in 1991.  That being said, NFL properties sort of blew the autograph inserts by having players sign the cards on the back. (footnote 3)  This makes the cards less presentable for the collector.

There still is a very active secondary market for these 1991 Pro Line autographs on eBay, and several collectors are passionate about trying to put together autographed sets (footnote 4).

Caption: Nick Lowery, in a very flattering pose, shows off his officially licensed NFL shorts and shirt.  For some reason, three pairs of shoes and a Chiefs helmet are placed randomly around Nick for ambiance.  I am throwing this card out after this post.

Market reception of the set seemed to be poor by 1991 standards (footnote 2).  My guess is that the autographs became a part of the set after focus groups “threw up” on the cards for being so bad.  Despite the modest reception, the NFL continued to produce two more Pro Line sets in 1992 and 1993.  NFL Properties seemed to have learned a little bit of a lesson by 1992, as the 1992 set had more action shots of players in real games interspersed with vanity photos.  Also, the hawking of NFL clothes was more subtle.  By 1995, NFL Properties had sold the ‘Pro Line' name to Classic Games and was out of the card business.

There are still plenty of factory sealed Pro Line 1991 football boxes around and they sell on eBay for around $12-15 when shipping is included (footnote 5).  This is less than they cost collectors when they originally came out.  Without the possibility of an autograph in each box, I suspect they would sell for much less.

In closing, what made the 1991 Pro Line set so truly awful is how far it strayed from what many sports card enthusiasts, myself included, feel is great about sports cards, kids and collecting.  Putting aside the obvious and ridiculous amount of product placement for NFL licensed clothing, the set seemed to have everything a kid would not want from a set.  Imagine that your parents gave you a box of this set by accident back in 1991.  You and friends could trade a Phylicia Rashad for a Stacey O'Brien while developing a craving for Zuba Pants.

In conclusion, there is no market for non-autographed cards from this set and such cards are truly junk.  Please throw all cards from this set in the recycle bin, so as to save some trees from being cut down and to save the the world from the embarrassment of this set.

End Note

Like all other posts, please feel free to make comments.  I review all comments before they are posted in order to reduce spam and keep things on topic.  Also, it may take me a few days to review comments.

Footnotes

1. The whole vanity shot of players idea was first fully implemented in Donruss' Studio brand of cards starting in summer of 1991.  While cards with vanity pictures (and players performing their hobbies and such) had appeared in cards sets before, the Studio brand centered an entire set around "studio" portraits of players.  Donruss Studio sets rank high on my list of worthless junk sets.

2. http://community.seattletimes.nwsource.com/archive/?date=19911020&slug=1312041

3. Another interesting post on this set can be found here: http://sanjosefuji.blogspot.com/2011/03/good-bad-ugly-3-1991-pro-line-portraits.html .  That blog is where I became aware of the autograph location issue, which I have found mentioned in other descriptions of the set.

4. An interesting site that shows one person's passion for these autographs can be found here: http://bcn33rs.wordpress.com/about/ .  My perception of the market for Pro Line autograph cards is from examining all finished auctions on eBay on 11-11-2012.

5. The prices for wax boxes of Pro Line cards is from examining all finished auctions on eBay on 11-11-2012.