THE BIG-MONEY CARD GAME Licensing contracts are worth millions to players unions

THE BALTIMORE SUN

It's tempting to view the $1 billion-a-year sports trading card industry as "Big Business."

But "Big Labor" might be more like it.

Beginning with baseball in 1967, most of the major sports unions have obtained the rights to market the names and faces of their members in lucrative group deals for trading cards, board and computer games and other sports-oriented products.

The licensing revenues, boosted by trading card mania, have outrun dues as the main source of cash for the unions. Last year, the players associations of baseball, football and hockey grossed more than $90 million from the arrangements, according to federal reports and the associations.

The unions distribute most of the proceeds to the players, but can and do keep money when needed for contract negotiations or to fund the expensive legal fights common in pro sports. Last year, the NFL Players Association spent $7.5 million in courtroom scrimmages with the league -- money raised largely through trading cards.

Not surprisingly, there have been fights over that money. Just this month, players struck the National Hockey League, in part over proceeds from trading cards. A few days later, the National Football League Players Association began filing suits against members in an attempt to protect its licensing revenues.

"It essentially means a couple of things: They can't bankrupt you with litigation, and if you get into trouble, you have a savings plan," said Donald Fehr, executive director of the Major League Baseball Players Association.

Fehr's predecessor, Marvin Miller, pioneered the system after taking office in 1966. The union's treasury, which depended upon voluntary player contributions of $50 a year, had dwindled to about $6,300, said Miller, now retired.

At the time, cards were not as popular and one company, Topps Co. Inc., routinely signed up players for three-year, exclusive card contracts that paid $125 a year along with an occasional "gift" such as a refrigerator or oven, he said.

Miller organized a player boycott against this "monopoly" and convinced the players to sign over to the association the group rights to license their likenesses. His first deal, to put players' faces under Coke bottle caps, paid $60,000 a year and replenished the union's coffers.

The union now generates more than $50 million a year in licensing revenues.

"It gave us the kind of security that was essential," Miller said.

It also established a comfortable pattern that existed unchallenged until recently: Trading card companies pay royalties to the players associations for the use of player names and faces and pay the leagues for the use of trademarked team names and emblems.

For the heads of the sports unions, the licensing revenue also provides another advantage -- pay higher than that of most union bosses, although not as high as that of their millionaire members.

According to federal records, Fehr received $497,266 in salary -- and expenses in 1990. The NFL Players Association paid Gene Upshaw salary and expenses totaling $210,049 in 1989, its last year as a union required to disclose officer pay.

The NBA Players Association, which does not get much licensing revenue but hopes to in the next contract, paid Charles Grantham $343,032 in the year ending July 1, 1991. The NHL Players Association is based in Canada and does not file disclosures with the U.S. Labor Department.

The success of the licensing technique is due in large part to the success of trading cards themselves. While baseball cards have been around since the late 1800s, the business really took off in the last decade. Now there are cards for almost every sport, from auto racing to ladies bowling, complete with career data on one side and photos on the other. Baseball -- with its statistics-crazed fans -- remains the top seller.

Industry revenues are estimated at $1.2 billion annually, not including the secondary market in which individual rare collectible cards have fetched as much as $450,000.

Not surprisingly, the success has attracted attention from team owners.

A demand by NHL teams for a larger piece of the action was a chief cause of the recent strike, the first in the league's 75 years. The 11-day walkout ended April 11 with the players association retaining its licensing rights. The league estimates the union will bring in about $12 million this season from licensing deals, compared with about $8 million for the league.

"When they come after that, they are basically coming after the union," Bryan Trottier, a star forward on the Pittsburgh Penguins and acting president of the NHL Players Association, told reporters during the strike.

NFL owners, in a long-running battle with their players association, have paid selected players to cancel their deals with the association and sign separate agreements with the league.

Among the most lucrative deals: the Quarterback Club, which guarantees each of 11 quarterbacks $500,000 over five years for the use of their faces on a card set. Club members include Randall Cunningham of the Philadelphia Eagles, Dan Marino of the Miami Dolphins and Warren Moon of the Houston Oilers.

About 250 players have signed exclusive deals with the league, including 201 whom the players association says were locked into agreements with the association. Suits were filed last year against the league, accusing it of illegally meddling with the association's contracts.

The first of what could be scores of suits against members were filed this month by the association, accusing players of violating their deals with the association. Among the first to be sued were Eagles defensive tackle Mike Golic, New York Giants center Bart Oates and Pittsburgh Steelers and former University of Maryland quarterback Neil O'Donnell.

In a complicated legal maneuver, the NFL Players Association officially decertified itself as a union in 1989. The league stopped deducting member dues from paychecks, making it more difficult for the union to raise funds.

This made licensing revenues all the more important. Last year the association took in about $21 million from licensed goods, all but 10 percent of that from trading cards, according to Doug Allen, assistant executive director of the 1,500-member association. That's up from less than $1 million six years ago.

This allowed the association not only to eliminate its $2,400-a-year dues but to distribute $3.1 million, or about $2,000 per player, last year. This year it hopes to distribute $7.5 million, or more than $4,000 per member, Allen said.

Baseball licensing arrangements brought in more than $50 million last year, according to Fehr. He won't say how much more, but documents the union filed with the Labor Department show licensing revenues of $59 million in 1990, the most recent figures available.

That dwarfs the $2.7 million raised by dues of $15 per player per game, or $2,430 for a 162-game season. Along with a variety of other revenue sources, including investments, the roughly 1,000-member union reported receipts of $103 million for the year.

The union's executive board votes every year on how much revenue to retain and how much to refund to members. In 1990, the union distributed $78 million in licensing revenues, about half of which had been collected in previous years but temporarily retained for union business.

The union has traditionally split this revenue equally among its members, including coaches and trainers who aren't featured on trading cards.

Fehr won't say how much each member receives, except to say it varies widely from year to year. A rough estimate based on the labor documents puts the total at about $78,000 per member in 1990, presumably an unusually big year because of the distribution of prior-year revenues. Players have said they received about $60,000 last year.

In the NBA, revenues from licensing agreements were granted to the league in the 1985 contract, said Grantham. Other than a small royalty, the association doesn't get anything from card revenue but hopes to when the contract is up for renegotiation in 1994, Grantham said.

For now, the NBA Players Association depends upon $3,000 a year in annual dues from its members. The dues generated $1.03 million in the year ending June 30, 1991, according to Labor Department records.

"Frankly I inherited that and it's something we want to change in 1994," Grantham said. "The whole issue of trading cards and licensing revenues is something we're going to be making a priority."

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