LOS ANGELES — The shelves are crammed with boxes of baseball cards at Mike Mittrick’s store. It gives his customers lots of choices but also illustrates how the hobby’s landscape had become cluttered and confusing for collectors.
Faced with declining revenue over the past decade, the baseball card industry — once comprised of four major manufacturers — has been halved in a matter of months.
One company closed its doors. Another had its license to make products in 2006 dropped, and the oldest, most recognizable brand was rumored to be up for sale.
Insiders hope the shakeup will bring the struggling industry out of its slump and help reclaim its main demographic — boys who are spending their money on other diversions such as video games and the popular Yu-Gi-Oh game cards.
“We felt the best way to position it for growth was to have fewer manufacturers producing cards,” said Evan Kaplan, director of trading cards and collectibles for the Major League Baseball Players Association, which along with Major League Baseball charges manufacturers licensing fees to produce cards.
The downsizing is a mixed bag for retailers such as Mittrick, who runs 52 Mantle Card Co. in the Orange County city of Brea. He opened his store in the early 1990s when the sports card industry posted revenue of more than $1 billion as speculators scooped up cards hoping for a big return on their investment.
Baseball cards then comprised 80 percent of the industry’s revenue but now account for less than half — an estimated $120 million.
The rising cost of cards has played a major role in the decline. Collectors spent between 89 cents and $3 on a pack of cards in the mid-1990s. Today, the average price is about $5 as companies include goodies like autographs, small pieces of jerseys or even bat slivers in a small number of packs to drive sales.
Some packs — guaranteed to have the extras — can command up to $150.
The changes have driven away some collectors and, in turn, forced many card shop owners out of business. A decade ago, there were about 4,500 card stores across the country. Now that number has shrunk to 1,200.
Dwindling interest in the hobby coupled with exorbitant costs to put memorabilia into packs of cards helped sink New Jersey-based Fleer. Saddled with more than $30 million in debt, the company went out of business in May and rival Upper Deck of Carlsbad, Calif., bought its name and toy car business $6.1 million at auction.
Fleer plans to auction off some of its remaining memorabilia in September to pay a list of creditors that includes dozens of professional athletes.
In July, collectors were stunned when MLBPA opted not to renew its contract for 2006 with Donruss/Playoff of Arlington, Texas. The company laid off 30 of its 100 employees but will keep making football cards.
“We truly felt that because of the quality of our cards and their popularity, that we would not have our license revoked,” said Donruss spokesman Ted Barker. “It is safe to say that it’s a very sad place around here.”
Many collectors were upset about the fate of Donruss, a company they said scored points with strategies such as buying a Babe Ruth jersey for more than $260,000 in 2003 then slicing it up and putting the pieces into packs of cards.
Barker said Donruss has spent tens of millions of dollars on players’ jerseys and other paraphernalia to offer with cards. The company also signed exclusive contracts with legends such as Hank Aaron and Willie Mays to sign autographs.
MLBPA’s decision only leaves Upper Deck and the publicly traded Topps, which has been around since the 1950s but recently announced a 20 percent drop in first quarter sales for its cards, collectibles and other entertainment products.
In May, the company responded to rumors that it might be looking for a buyer by noting it hired Lehman Bros. to review its books and make recommendations about its future.
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