A New Ballgame : It’s Emotional, It’s Nostaglic, It’s Big Money: It’s the World of Sports Memorabilia Marketing

Eight years ago, Michael Klar began amassing Brooklyn Dodger collectibles, vintage 1947 to 1957.

First came autographed baseballs, then bats, uniforms, jerseys, rings, yearbooks, programs, ads and statues. A former minor leaguer sold the Long Island lawyer Jackie Robinson’s 1950 home jersey. Andy Pafko sold him his uniform. Klar bought Duke Snider’s 1953 league championship ring so Snider could buy his wife diamond earrings.

The collection was a passion, a way to recreate his Brooklyn boyhood, and he displayed it lovingly in a spare bedroom of his home.

Last month he sold it for a substantial sum.

“It brings tears to my eyes,” he said. “But I was frustrated. The cost of everything was prohibitive. Things I paid pennies for at the beginning were now worth a lot of money. It was difficult to compete with people with a lot of money. They raised the price of everything. I didn’t want to spend another $100,000 updating it to make it better.”

And what will he do now?

“Probably start collecting Brooklyn Dodgers’ memorabilia,” he said with a rueful laugh.

Klar’s story is retold time and again in the sports memorabilia field: Collectors buy low, sell high and, if they aren’t wildly rich, cannot dream of recreating a similar collection. The wealthiest investors will spend what it takes to buy what they want, pricing these trinkets of nostalgia beyond the reach of most buyers.

Like the paintings of Picasso and Rembrandt, the artifacts of our sports history are being bid up to astronomical heights.

“On the whole, everything is going up,” said Joshua Evans, the dealer-auctioneer who bought Klar’s collection and values it at $250,000. “Some are going higher than others. The only way to construe anything going down is that some things haven’t gone up.

“A 1958 White Sox autographed team ball was $125 last year and is probably the same now. But a 1932 mint condition Yankees’ autographed ball with Ruth and Gehrig on it has gone up as much as six times (in the last year) to $3,000.”

To some, the current high-priced state of sports memorabilia reminds them of the mania in the coin market in the early 1960s or the current frenzy in the art market, where a Japanese buyer is willing to pay $82.5 million for a Van Gogh painting.

David Finkelstein, whose father Hub, a Houston oilman, is bankrolling his expensive hobby, predicts that the “hobby has gone crazy and will keep going crazy as more doctors, lawyers and upper-class people get into it.”

At the recent Guernsey’s sports auction in New York, Hub paid $110,000 for a complete series of 1914 and 1915 Cracker Jack card sets, renowned for their delicate texture and bold red background.

David, a high school student who aspires to the law, said: “We have to spend what we spend to get the quality we want.”

Thomas Hoving, the former director of the Metropolitan Museum of Art and now editor of Connoisseur magazine said: “People think collecting anything that is unique and in good condition will go up, and the top stuff will never go anywhere but up. It’s invigorating that they’re doing this for baseball and not politics. The public has taste.”

Taste or not, the market in sports collectibles is a strange one, a Peter Pan hobby turned scorching-hot collectible investment business.

It has done so without organization, regulation or centralization.

Egalitarianism rules: Anyone can become a memorabilia dealer.

Prices keep rising, spitting in the faces of supply-and-demand forces.

It may be the last bastion of total legal capitalism, where kids and codgers can buy and sell with T-shirted casualness. Maybe this is what Adam Smith meant when he talked about the laissez-faire economy.

“It is certainly an inefficient market, where prices go out of line from where they should be, but like other real asset markets, could keep going up as long as inflation goes up,” said Burton Malkiel, an economics professor at Princeton University. “But everything comes down, even Japanese real estate.”

Still, who knows when and why sports memorabilia will decline? After nearly a decade of seemingly unrestrained growth, it is growing more strongly than ever.

Auctions, such as those held in April by Guernsey’s, and in May at Richard Wolffers in San Francisco, attract new attention to the market, and legitimize it with a patina of slick sophistication missing at card shows and smaller-scale phone auctions.

“Big auctions put collectibles into the established, renowned fields of collectibles,” said card show promoter-dealer Bob Schmierer of the Eastern Pennsylvania Sports Collectors Club. “It gives people another outlet to dispose of their material--and there’s an awful lot of material out there.”

Although no asset can climb upward forever without a correction here or a collapse there, memorabilia has so far defiantly avoided the pull of gravity.

Why? It’s a relatively new field for serious collecting and investment. And the overall American economy has been healthy since the boom in collectibles began.

But it’s more than that. It is emotion. It is nostalgia. It is hundreds of thousands of people who want to own a piece of cardboard or flannel that helps them touch history. Or it’s simply people willing to climb every new rung in the price ladder.

“I don’t even hear the gloom-and-doomers say there is going to be a crash,” said Steve Ellingboe, executive editor of Sports Collectors Digest. “We haven’t seen indications of wholesale selling. It amazes me. Prices have run up to tremendous levels. Markets usually don’t act this way.”

Limited-quantity press pins are one of the hottest favorites in the business, as indicated by the recent sales of 200-pin sets by collectors Bill Mastro and former baseball executive Joe Brown for $275,000 and $200,000 (followed by a quick re-sale for $250,000), respectively.

“These pins have gone up an awful lot,” said New York dealer Richard Simon. “It’s legitimate to me because it’s limited. They didn’t make many. I’m not saying they won’t go down, but new stuff, produced in huge quantities, you won’t be able to get toilet paper for them one day.”

The hyperbolic vitality of sports collectibles can be found in a perusal of Sports Collectors Digest, a 55,000-circulation industry weekly. Besides its baseball card price guide, a typical issue lists more than 1,000 card-and-autograph shows a month--attended by up to a million people--and 40 auctions spread out over 250 pages of advertising.

The SCD is busier than the Wall Street Journal’s stock-and-bond exchange pages, evoking in small-print and exclamation points a portrait of a manic market still in its brassy toddlerhood. Rookie and error cards! Full sets and cases of Topps, Fleer and Bowman cards! A Nolan Ryan statue for $195! A Ken Griffey Jr. card collection! A Don Mattingly plate for $150! A basketball signed by Kareem Abdul-Jabbar for $95!

And hey, who’s at the shows?

The ’61 Yankees are in Atlantic City! Lou Brock, Bob Feller, Juan Marichal in New York! Gaylord Perry and Tony Dorsett on Cape Cod! Billy Herman in Iowa City! Yogi Berra in Memphis! Whitey Ford in Toledo! Get your ticket, line up, get the Mick’s autograph for $35, Eddie Mathews’ for $9.

Maybe they’ll look up at you, give you a smile, share a story, shake your hand. But then, maybe not. They’ve got their hourly quota of signatures.

In anticipation of the appearance of 33 players from the 1961 Yankees, dealer-promoter Alan Rosen, the high-octane “Mr. Mint,” vowed that his show at the Trump Castle, where devotees could spend $180 for a superticket guaranteeing all the signatures, would generate $2 million in autographs.

“A record!” Rosen crowed.

Because the market is so private and disorganized and the mass of collectors relatively small players, public details about the industry’s size are hard to come by. But there are a couple of financial glimpses available:

--Topps bubble gum’s earnings for the latest fiscal year are up 34% to $37.5 million and its revenues up 24% to $246.4 million. Although mostof its business is baseball cards, Topps also produces football, hockey, senior baseball and non-sports cards.

--The Score Board, a public company whose primary business is buying huge quantities of cards and reselling sets and cases, as well as repackaging them into sales of hot players, rookies and superstars, earned $2 million in the last year, on revenues of $20 million.

Dealers range from mom-and-pop stores and flea marketeers to larger dealers who generate up to $10 million in business. Auctioneers gavel home anywhere from a few thousand to a few million.

“If I were teaching at Harvard Business School, I’d categorize this business as the one true cottage industry,” said Paul Goldin, a former statistics professor at Drexel University and now Score Board’s president.

The cottage industry--which may be approaching the size of an estate--has two basic elements:

--The first is composed of the relics of the sport: artifacts of the near and distant past, from Babe Ruth’s 52-ounce bat and the bat Pete Rose used to break Ty Cobb’s hit record--and which Rose sold for $129,000--to letters from Walter Johnson and tobacco company trading cards. Once those were produced, no more were made. These are the sports equivalents of Lincoln’s handwritten notes and George Washington’s ax--real, unreproducible history.

Consider the case of Lou Grasso. For two years, he played first base in a semipro league in Brooklyn, wearing the Yankee jersey of Lou Gehrig, sold to his team after the 1937 season. For more than 40 years, the jersey, with the stitched “NY” replaced by “Bay Ridge” across the pinstripes, was in an iron chest in Anna Grasso’s home.

In 1979, Mrs. Grasso, Lou’s widow, gave it to her daughter, Mary Beth Baglivi. She sold it in April for five figures to pay for her son’s college education. It would have fetched more if the “NY” had been intact. But with the Gehrig name stitched in its collar, its value remained high.

“My daughter and grandson were very upset at selling it and she was afraid to tell me about it,” Anna Grasso said. But I said, ‘Michael, this is your grandfather’s gift. Don’t feel bad. He’d be delighted.”

--The second side of the market is more contrived: mass-produced trading cards, player autographs signed en masse at card shows, stickers, collectors’ plates and figurines, and packaged, signed bats and balls and plaques sold on home shopping networks by Mantle, Aaron and Rose.

Remember watching Rose hawk his wares on the CVN home shopping channel the night he was banished from baseball? Well, his sell-a-thon was set up by Score Board’s Goldin, who had arranged for Rose to sign trinkets Score Board had produced especially for the appearance.

Hank Aaron showed up in the company’s New Jersey offices a month before his CVN appearance to sign the bats, balls and plaques he hawked in his three-hour appearance.

Goldin said that his orders of bats, balls and jerseys make Score Board the largest customer of Rawlings.

“I’d prefer to say we’re creating memorabilia to contriving it,” he said. “There’s an expanding marketplace and a true love for these items.”

Now consider trading card production. The five major baseball card makers--Topps, Donruss, Fleer, Upper Deck and Score--churned out about 7.5 billion cards last year, according to Kit Kiefer, editor of Baseball Cards magazine.

For Yorba Linda-based Upper Deck, the newest player among the five, playing catch-up to its more established rivals means keeping its production plant going seven days a week, 24 hours a day.

“Our factory is going year-round,” said Jay McCracken, Upper Deck vice president in charge of sales. “We shut down half the plant for a week this year and a week last year.”

A planned move to northern San Diego County in about a year will quintuple production capacity, McCracken said.

Upper Deck and the other card companies feed a ravenous market of collector-investors. Some hope for riches in rookie cards or cards with errors, but sophisticated buyers know the long-term appreciation lies in reselling sets and cases.

“Why buy a rookie set?” asked Rosen. “Only 5% will be worth anything. The odds are worse than a slot machine.”

If the card companies pump up production of card sets, knowing that more cards mean more speculation and more speculation means a crazing for more cards, they’re not saying. And they deny any suggestion that they purposely print errors to puff up the value of their cards.

“The market is there and we’re working to fill it,” said Topps spokesman Norm Liss.

At Donruss, where production on baseball cards stopped last month, General Manager Neal Lewis said: “No company wants to flood the market, but we are in a business. . . . I suppose you could theorize that at some point there could be a leveling off. But we’re not sure when or where it will be.”

Richard McWilliams, president and chief operating officer of Upper Deck, contends that the growing number of collectors offsets the fears of over-production.

“In 1980 there was only one real baseball card manufacturer,” McWilliams said. “Now there are five major manufacturers and others. In addition, where you had maybe a million real collectors, you now have about 3 1/2 million.”

According to Kiefer, the card companies have generally increased production of baseball cards 10-15% each year through the 1980s.

Now the card companies have more than baseball. Fleer and NBA Hoops produce basketball cards; Pro Set, Topps, Fleer, Bowman and Action Packed Hi-Pro produce football cards, and Topps produces hockey cards, with Fleer and Upper Deck expected to do so next season. Cards are also made for senior league and minor league baseball, all-time college teams, wrestling and other sports.

The sudden boom in non-baseball cards was fueled by the overpricing of baseball cards and the desires of other leagues to get a piece of the trading card business which, until recently, was 90% baseball.

“Now when I go to card shows, it’s 60% baseball and 40% everything else,” said Dr. James Beckett, whose Dallas-based Beckett Baseball Card Monthly, with 400,000 paid circulation, is the bible of card pricing in the industry. “It’s not like 10 years ago when one company put out cards for one sport.”

The re-introduction of basketball, football and hockey cards has ignited baseball-like speculation in past sets of cards, as well as just-issued cards, which start increasing in value the second they are shipped.

A mint-condition Joe Namath rookie card is valued at $4,400. A 1979-80 Wayne Gretzky card goes for $365. A case of Topps basketball cards from 1980? $9,500.

Even the publicity for NBA Hoops, a joint venture of the NBA and the Liggett Group, touts the cards’ appreciating value, notably the rookie card of San Antonio Spurs’ rookie center David Robinson, now worth $30.

And, said Fred Scalera, the NHL’s director of retail licensing: “It’s worked for football and basketball, why not for hockey? We were helped by their getting in ahead of us.”

The leagues and their card makers get nothing directly from secondary-market sales of player cards. But they benefit mightily from knowledge that some of their cards gain and retain value as well as Mercedes-Benz sedans.

Although only a small percentage of individual cards shows great appreciation, that doesn’t seem to matter to collectors, investors and dealers. The more they buy, the greater the chance to get the hot cards. The more hot cards, the more interest. And the more card companies, the merrier. Each year, it seems, rumors of a shortage of a set spark speculation reminiscent of the market for over-hyped new stock issues. The craving seems unquenchable.

If you examine guides, prices are quoted on the current value of cards and card sets. In fact, these are merely guides. The true value generally doesn’t coincide with the recommendation.

The prices are arrived at through a consensus of readers, dealers, advertisements and card-show field observations--the guides quote the sources who quote the sources who quote the sources . . . And it goes on, an inexact science at best. If a $600 SCD quote for a Nolan Ryan rookie card is surpassed by a $900 card-show prices, then, up it goes.

Said Beckett: “No source you can think of isn’t surveyed, and we have our own way of combining them.”

Added Steve Ellingboe of the SCD: “It’s been misinterpreted that we set prices. We don’t set prices. We reflect them.”

News--real and dubious--spreads fast. When a factory has reportedly shut down or a player has suddenly gotten hot, phone lines light up, faxes purr and Teletypes clatter from coast to coast. It’s similar to bogus stories of Presidential illnesses that play havoc on Wall Street.

The SCD has a 900 number, through which it lets collectors know such tidbits as Paul O’Neill has had a good spring and his card is dirt cheap. A good gamble might be his 1986 Donruss card. Or that the 1990 Score set continues to rise in price because of speculation that fewer sets have been printed this year. Now it’s selling at $40 or more. Or that dealers are asking as much as $20 for Score’s 1990 black and white Nike card of Bo Jackson.

When any market experiences fast growth, rapid price run-ups and brings in untold new buyers every day, there is concern that it can tumble. How long can people buy sets and, especially, cases of new cards, in hopes of future profits? When owners put thousands of hoarded sets and cases on the market, will there always be a buyer?

“For every item stashed there has to be a buyer,” said Bob Schmierer. “Ten thousand items hoarded needs ten thousand buyers.”

Ken Slater, owner of California Numismatic Investments in Redondo Beach, has felt for more than a year that the speculation-laden secondary market in new cards has gone too far. He, in fact, recently sold the last of his unopened boxes of cards.

“I’ve been saying for a year that the card market is ready for a hit,” he said. “They’re overpriced. There aren’t as many buyers out there as there used to be.”

Each record price for a set of leather portraits, a Ted Williams uniform, or a rare set of turn-of-the-century tobacco company cards sets a new pricing level that becomes the momentary standard. If succeeding levels are not met or the big spenders hit hard times, it could produce a mild crash or a plateau in prices that may be a way for the market to return to earth, said Seattle dealer Kit Young.

Noting the market influence of a free-spending memorabilia buyer, Jim Copeland, owner of the San Luis Obispo-based Copeland Sporting Goods chain, Young said:

“His bidding has sent prices beyond the level for normal collectors. What happens if his stores hit a downturn? Does he pull out of the market? Some dealers have lived off the buying of high rollers, but some have already started to pull back. If people start seeing declining values, there’s potential for a good leveling off.”

But maybe that’s the way of a hot collectible market: It starts small, grows, tantalizes the public’s imagination, explodes, becomes the darling of investors--and then only the rich can afford it.

MOST VALUABLE BASEBALL CARDS Values shown are for cards in mint condition (RC)-indicates rookie card

YEAR CARD PLAYER Value 1968 Topps Nolan Ryan (RC) $1,550 1970 Topps Nolan Ryan 420 1975 Topps Robin Yount (RC) 210 1984 Fleer Kirby Puckett 150 1975 Topps George Brett (RC) 140 1971 Topps Nolan Ryan 135 1980 Topps Rickey Henderson (RC) 115 1972 Topps Carlton Fisk (RC) 115 1972 Topps Nolan Ryan 100 1984 Fleer Roger Clemens (RC) 90 1977 Topps Dale Murphy (RC) 80 1984 Donruss Don Mattingly (RC) 70 1983 Topps Darryl Strawberry (RC) 65 1986 Donruss Jose Canseco (RC) 50

RECENT PLAYERS

YEAR CARD PLAYER Value 1952 Topps Mickey Mantle $12,500 1951 Bowman Mickey Mantle (RC) 6,300 1954 Bowman Ted Williams 4,200 1953 Topps Mickey Mantle 2,800 1952 Bowman Eddie Mathews 2,800 1951 Bowman Willie Mays (RC) 2,200 1953 Topps Willie Mays 2,000 1952 Topps Roy Campanella 2,000 1952 Bowman Mickey Mantle 1,950 1967 Topps Tom Seaver (RC) 1,750 1954 Topps Hank Aaron (RC) 1,400 1955 Topps Roberto Clemente (RC) 1,400 1948 Bowman Duke Snider 1,250 1955 Topps Sandy Koufax (RC) 1,000 1949 Bowman Jackie Robinson 1,000

THE ANCIENTS

YEAR CARD PLAYER Value 1909-11 T206 Honus Wagner $100,000 1932 U.S. Caramel Freddie Lindstrom 24,000 1909-11 T206 Joe Doyle 18,000 1933 Goudey Napoleon Lajoie 18,000 1909-11 T206 Eddie Plank 12,000

Source: Sports Collectors Digest

A BOOMING MARKET RETALS SALES OF LICENSED SPORTS MERCHANDISE (in millions of dollars) Major League Baseball 1983: 100 1984: 175 1985: 195 1986: 225 1987: 450 1988: 650 1989: 1,000 National Basketball Association 83-84: $44 84-85: 68 85-86: 107 86-87: 173 87-88: 300 88-89: 525 89-90: 750 (estimate) National Football League* 1983: 200 1984: 225 1985: 250 1986: 350 1987: 500 1988: 575 1989: 750