The crash of the American baseball card industry became official yesterday in a lawyer's office in New Jersey.
Twenty-five years after breaking the Topps Co. Inc.'s monopoly on the industry, Fleer Corp. - bankrupt and $33 million in debt to a list of creditors, including $12,800 to Cal Ripken Jr. - was expected to be sold at auction last night, the most visible casualty of a pastime that has suffered sharp declines and a significant demographic shift over the past decade.
What was once a hobby for boys, who stuck cards in the spokes of their bikes or flipped them on neighborhood playgrounds, has become an exclusive marketplace for adults. Grownups are swapping high-priced cards that contain everything from holograms to pieces of autographed bats, jerseys and balls - a far cry from the cardboard bubble-gum packs of the past.
This year, sales of new cards, of which baseball remains the principal sport, will reach $260 million, according to Scott Kelnhofer, editor of Card Trade, an industry trade journal. That's down 35 percent since 1999, and nearly 80 percent off its $1.2 billion peak in 1991.
Despite a potential record-setting year in attendance, Major League Baseball and the Players Association see the pricing out of a generation of young fans who have nothing but their weekly allowances to spend, and there are plans to announce in the next few months - possibly the next few days - a scaling back of product lines in an effort to stabilize the market.
Jordan Stern of Havre de Grace remembers walking to the corner store 40 years ago as a child to buy a 50-cent pack of cards. But most packs now cost about $4, and some are as much as $20, $50, $100 and even $500. "Kids just can't participate in this hobby anymore," said Stern, 46, who owned a Bel Air card store for 16 years. "They're priced right out of the market now."
The collapse of the market has made those corner stores harder to find for young fans such as Jordan Brody, a 10-year-old receiving hitting instruction at the Rich Jenkins Baseball Camp in Ellicott City.
"I would collect them, but I don't know where to get them," he said. "The places near us, they don't sell them anymore."
Area card stores have been closing or sharply cutting back hours, and Internet auction sites such as eBay have provided less costly channels to peddle merchandise.
Sports trading cards became hot in the late 1980s, as older generations of fans dusted off their childhood collections and revisited hobby shops, suddenly making thousands of dollars. Meanwhile, a new generation started their own collections, figuring they, too, could someday make mini-fortunes if they took better care of the cards than their fathers did.
The card industry took notice and began mass producing. More than a dozen new companies entered the marketplace, and card shops sprouted up around the country. Mike Tanner said four new stores opened within a quarter-mile of his Eastern Avenue store, the Baseball Card Outlet. And at discount stores such as Kmart, fans snapped up cheap boxes of baseball cards that were stacked 6-feet-high in aisles.
The backlash of that prosperity has seen the demise of most of the startup companies. But yesterday's liquidation of Fleer gives the decline a sense of finality, according to those in the card industry. There are just three companies left: Donruss Playoff LP of Texas, the Upper Deck Co. of California and New York-based Topps.
Meanwhile, cards from the 1980s and '90s, preserved in plastic cases and binders under collectors' beds, are worth next to nothing, according to some card vendors.
"You can bring someone a binder of those cards and they wouldn't touch them," Stern said. "There were so many of those cards produced, and there's millions around."
The market is largely driven by older collectors' thirst for memorabilia, Kelnhofer said. The high-priced packs guarantee players' autographs or dime-sized slices of bats, jerseys and stadium seats, built into the cards. The companies pay fees to current and retired athletes for signatures and jerseys, which can be sliced up and packaged into 1,000 cards.
Meanwhile, younger children have gravitated towards fantasy card games such as Pokemon and Yu-Gi-Oh, while teens spend their time playing video games - a $7.3 billion industry, according to researcher NPD Group Inc.
Annapolis resident Chris Smith, 34, remembers collecting baseball cards as a child for two reasons: the Orioles and the gum.
Like many young collectors, Smith set a goal of getting all the cards of his favorite player and building team sets, something that's virtually impossible today. According to the Beckett Price Guide, five different kinds of Ripken cards were produced in 1986, which could be purchased today for $20.
These days, collectors such as 12-year-old Jake Weyer would have to do more than mow his family's lawn to raise enough money to buy all of the 50 different cards that the retired shortstop appears on in 2005; Beckett lists the Ironman's 2005 cards as being worth a total of $3,840, ranging from $6 to $300 each.
In court papers, Fleer Executive Vice President and Chief Financial Officer Chris Tobia said the major leagues and the players association have recently discussed limiting the number of licenses and products, and card makers say upcoming measures will attempt to rein in the industry.
"Collectors are understanding [that] too much of anything is not a good deal," said Rich Klein, an analyst for Beckett.
To achieve those limits, the majors and the players association would first have to scale back licensing fees, said Jim Barrett, an analyst for C.L. King & Associates who follows Topps, the only publicly traded sports card manufacturer. Card companies have been paying retired and current athletes for memorabilia, and they have been selling high-priced products to meet quotas still on the level of the 1990s boom.
"If you have a big royalty payment to make to Major League Baseball and the Players Association, you're not going to sacrifice yourself and make less cards, sell less cards because you want to altruistically build the category," said Barrett.
Topps recently reported a 78 percent decline in profits for its first fiscal quarter, blamed primarily on the sales of sports cards. Rumors are swirling that the company could be sold to a larger confectionary business.
Spokesman Clay Luraschi said Topps is aware of the need to keep children engaged in collecting, and companies have taken strides to keep the hobby accessible. Topps offers four different kinds of cards between $0.99 and $1.99 a pack. An Upper Deck official said his company sponsors weekly card wrapper redemptions for Little League baseball equipment and trips to meet sports stars.
"We look to build lifelong collectors," Topps' Luraschi said. "It goes hand in hand with the game and is one of the many facets that makes the game so special."