Grand Cards: The Bombshell and The Aftermath

Thursday, August 6, 2009

The Bombshell and The Aftermath

I caught this news early this morning, but have been in meetings up to this point and haven't had a chance to comment. Normally I pass on the whole "hobby news" stuff, but the significance of Topps being granted an exclusive baseball card license is worth talking about. I'll try to avoid becoming "Dan the Economist" again, mostly because I can't scan in hand-drawn graphs of a market with a monopoly. Don't think I won't though, if it needs to come to that.

So here's the deal: Topps has an exclusive MLB license, meaning that they can produce baseball cards the way we think of them. Upper Deck does not have said license, but does have a MLBPA agreement, meaning that they can produce cards of players. As Gellman at SCU mentioned UD has said that it is more about the players than the logos on the jerseys anyway. Personally, I don't think that is the case in baseball. If I wanted a card of a star with some lame plain helmet or generic jersey, I'd go out and buy some Mootown Snackers, thank you very much. To draw on my inner Bo, for me and many, many others it is all about the team, the team, the team. Sure, I'm a Curtis Granderson collector, but more importantly I am a Detroit Tigers collector--and that is where things get murky.

I'm somebody who tends to obsess over two things (and I think that many of you can relate): completeness and continuity. I started off collecting Topps cards because that's what my Dad collected, and when I really got back into things, my goal was to go after the Topps team sets. That way, I could create a continuum of all Tigers teams and the evolution of the game, the players and the cards. As a kid, I always loved Upper Deck's cards as well, even if the were a little pricey for me. With 20 years under their belt, their significance in the card world, and their much larger checklist of Tigers, I've been going after Tigers team sets from Upper Deck too. So Topps was my bedrock and Upper Deck a welcome addition. Beyond that, I'll collect team sets for releases that look nice--A&G, Heritage, Goudey, Masterpieces (I collected that whole set), knowing that if they discontinue or I stop liking them, I still have my two flagship sets to fall back on.

In this way, the loss of Upper Deck hurts. I really enjoyed Upper Deck's base set. The photography, the full-bleed, the large checklist--it was a direct contrast to a standard Topps set, and added a new dimension to my collection. With that option now gone, I don't feel comfortable being at the mercy of Topps alone. Sure, they've made many good sets and provide us with Chrome and Heritage and A&G and more, but they also brought us Co-Signers and Moments & Milestones and a bunch of other lackluster sets that weren't worth my money or my time. Upper Deck did the same thing mind you--releasing set after set of half-baked, poorly designed junk, but when there are two companies that produce a ton of crap and a handful of gems, you can skim the cream off the top. With only one company, there is less cream to skim.

Such is the danger of a monopoly. The traditional economic model tells us that quantity produced will decrease and prices will rise. We know for a fact that quantity produced is going to decrease--as Topps alone can't possibly release enough products to make up for the loss of an entire company. Don't be surprised then when prices rise a little bit as the demand for cards is consolidated among the fewer releases. Oh, heck--for the wonks among us:

Here's what happens. With fewer products and the same demand (note how the downward sloping curve doesn't shift), Topps is going to be able to charge a higher price for its products. This will drive some collectors out of the market (the difference between X1 and X2 in the bottom graph). Now, in the competitive market, the card companies shared the total industry sales. With only one company, Topps can afford to lose some customers while still charging a higher price to yield greater profit--this is how monopoly works. They may not go out of control, especially because their license will need to be renewed by MLB, but don't be surprised if you see this sort of thing happening to some degree.

Even if prices don't change, the consolidation of the industry is bad if for no other reason than it restricts choice. I chose to buy packs of Goudey and Masterpieces. I chose to buy individual autographed or game used cards that I liked. I have a finite amount of money and will choose what to do with it.

That said, Topps' control of the baseball card market doesn't mean the death of the hobby. Rather, it may lead to a much-needed refocusing of the industry, that streamlines and simplifies product lines. There is such thing as too much choice, after all. That's why places like Costco and Trader Joe's are successful. It seems to me that Topps and Upper Deck both pushed mediocre products to fill a slot in the release calendar, fit a certain price point and hit a perceived market. If these products go by the wayside as a way to simplify collecting for the next generation, then I certainly won't complain. That said, a watchful eye needs to be kept on Topps, who can't be allowed to let their quality slip from it's current 2009 high point. I think that team and set collectors will still have plenty to chose from and happy collecting ahead of them with a product line centered around Topps, Heritage, Chrome, Bowman, A&G and Finest with a smattering of other releases mixed in.

Where Topps stands to gain tremendously in volume and low- to mid-level releases, it stands lose in the high-end market. The high-end is the player collector's domain, and Upper Deck has proven that they can consistently design and produce excellent products at this level. Topps has a choice. It can either choose to compete or it can concede the market to the non-licensed companies. As a Granderson collector, I am up in the air with this. I think that if the cards are well designed then they will sell and I will buy them. With the overhead of an MLB license out of the way, Upper Deck can spend more on design, production and acquisition of autographs, leading to a better selection of these items. Either way, these will continue to be cards that I, and many others, buy exclusively off eBay after some risk-taking entrepreneurial types bust cases. This may also reduce the pressure on Topps to compete in an area where they have had only limited success, allowing them to focus more on set design and less on an autograph checklist.

So that's where we are. As a team collector, I am saddened, because I truly liked a handful of Upper Deck's offerings and there is a 0% chance that I will buy them without my beloved Old English D on the cards. At the same time, I still have my Topps set and the continuity that I crave. As a player collector, I am apprehensive about how the unlicensed cards of my player of choice will turn out, but at the same time relieved that I won't be compelled to pick up cards from the various crappy releases that both companies came out with. In all, time will tell if this ends up being a good thing or a bad thing. I do feel like some simplification was necessary--a trimming of the fat if you will. If this brings kids back into the collecting game for example, then it is a good thing.

I also think that a monopoly necessitates rigid oversight--something that the blogging community needs to step up and provide. Don't forget, collectors are the market, and as much as Topps may have control over things, we still decide what is successful and what isn't. Topps' customer service has proved responsive and considerate in the last year. Their card releases have been excellent. They also (likely) will need to earn their license again, and if there is one thing that I know about monopolies, is that they will do whatever they can to keep them. Topps wants you to buy more cards and wants you to like them because they want to keep that license. Give 'em hell, folks because all the credit or blame will fall squarely on their shoulders.

A fond farewell then to Upper Deck, a company that defined the last twenty years of collecting, for better or for worse. If nothing else, my obsessive side is satiated by the fact that Upper Deck neatly runs from 1989-2009. That sounds like one big, beautiful team binder to me.

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