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Original Issue

Back on Topps

A media mogul acquires a leader of the resurgent card biz

THE 21ST CENTURY hasn't been kind to the sports-card industry. In the early 1990s, when business was booming, dozens of start-up companies rushed to cash in on the collecting craze. But the market quickly became overcrowded, and by 2005 such premier brands as Fleer, Pacific and SkyBox had folded. A study that year by the Topps Co., the venerable firm that printed its first baseball card in 1951, found that the trading card market, then valued at $300 million, was shrinking by 15% per year.

But things may be looking up, at least for Topps, which last week was bought out by a group led by former Disney CEO Michael Eisner. (Topps stock rose 10%, to $9.81, on the news; the deal is pending approval from Topps shareholders and government regulators.) Eisner's interest in the company was likely piqued by its improving bottom line—Topps's net income quadrupled last year, to $8.7 million—and by its standing in a baseball card market that is suddenly wide open.

Last year Major League Baseball cut the number of companies it licenses to produce cards to two: Topps and Upper Deck, which started in 1989. The move instantly simplified a marketplace suffering from eroding sales and a confusing array of card brands. (Many companies released cards under several imprints, sometimes charging hundreds of dollars per pack.) "There was too much money going into competition and not enough into marketing, especially to younger kids," says Scott Kelnhofer, editor of Card Trade magazine. "They were failing in their business model."

MLB's licensing decision made the business less cutthroat. Baseball also made a greater commitment to card marketing with efforts like National Baseball Card Day, which was held last June 17. The moves have jump-started the industry: In a recent Card Trade survey 43.2% of dealers reported increases in gross sales last year, the biggest jump in six years.

Collectors and industry observers hope Eisner, a marketing whiz and sports fan, can make sure Topps's rise last year was more than a blip. They also see upside to Eisner's plan to run Topps as a privately owned company, without meddling from shareholders. "[Topps] doesn't need someone to reinvent the wheel," says Kelnhofer. "[They] just need someone who has some new ideas. Michael Eisner has some potential to do big things ... to Topps and to [trading cards] in general."

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