Speculator: "I've got 10 cases of '90 Donruss."
Toner: "Fifty dollars."
Speculator (distraught): "Well, I'll be by with the cards."
"They cost the guy $200 a case," Toner said. "But, hey, some speculators bought wisely. A two-case combo of 1990 Leaf sells now for $3,500 to $4,000." But not, it goes without saying, to children.
Concern for the sports-card industry is not confined to shopkeepers in the Midwest. Two months ago, in a spacious boardroom in a New York City office building, Jay Langdon, president of Topps, tried to explain the speculative frenzy that led to the crash. "In the '80s I think everyone got caught up in the Wall Street mentality," Langdon, 48, said. "There was this notion that sports cards were scarce and that there was an active secondary market, so some people got carried away."
Langdon's remark about the Wall Street mentality was ironic, floating as it did across a cherry-wood conference table surrounded by 16 big, black-leather chairs. Two years ago Topps left its headquarters in a seedy Brooklyn warehouse and moved into three modern floors at One Whitehall Street in lower Manhattan, a slap shot away from the New York Stock Exchange. Topps's stock, traded on Nasdaq since 1987, has been equally mobile: It peaked at $20.25 a share in '92, fell last year to a low of $4.25, and at the end of trading last week was going for $5.13. Other card companies trading on Wall Street are Marvel Entertainment (the parent company of Fleer and Skybox) and Scoreboard.
"In the late '80s and early '90s, when everybody wanted to play these stocks, we were recommending them," said Terence McEvoy, a sports-card-industry research analyst at the investment firm of Janney Montgomery Scott, Inc. "Topps, Scoreboard and Marvel all were hot stories. Now I tell investors to sit on the sidelines and watch." McEvoy, like the hobby-store owners, blames the industry's problems on overproduction. "Greed by the leagues was a problem, too. They've issued too many licenses to companies to print cards featuring players [with their team's logo] from their league."
During the 1950s, '60s and 70s, the card business was low-key and ruled by Topps, which held a virtual monopoly on baseball cards. But in 1980, when a federal court ruled in an antitrust case that the Major League Baseball Players Association had to issue more licenses to produce cards, Donruss and Fleer jumped in. (An appeals court overturned the ruling in 1981, but the Players Association had already begun selling more licenses.) The quality of the cards quickly rose—Upper Deck set new standards for photography and finish with its '89 baseball line—and the secondary market exploded, boosted by baby boomers' nostalgia for the Elmer Valos and Art Ditmars of yore.
The children of the baby boomers, loving baseball less than their dads, went for basketball and football cards and, more recently, no cards at all. The card category, which one retailing analyst recently dismissed as "postpeak," suddenly can't find shelf space in grocery stores.
"The demand appeared insatiable, but it wasn't," said David Leibowitz, managing director of Burnham Securities. "With the channel of distribution backed up and with too much inventory, it was hard to sustain prices, let alone have them continue to rise." The value of baseball cards declined the most, thanks, in part, to the players' strike of 1994-95. Not only were baseball players suddenly invisible, but fans also perceived them to be spoiled and greedy. "With all that," says Leibowitz, "there wasn't a hell of a lot of incentive to buy cards."