Bad Signs for the Autograph Business : Card shows: Recession, strikes and fraud are clouds that hang over this once-prospering industry.
Not so long ago, the lines snaked past Waldenbooks, The Limited and headed dangerously close to the Orange Julius stand. Local professional athletes and beloved old-timers were perched behind tables, signing their names repeatedly as fans moved past as if on a conveyor belt.
Scenes from a local mall?
Actually, this seemed to be going on in every mall, everywhere as the Rockwellian vision of an athlete dispensing free autographs turned into something like a traveling carnival, eventually turning into an industry worth hundreds of millions of dollars.
In 1980, there was one company, the Topps Chewing Gum Co., producing collector cards. By 1991, there were five companies expected to make nine full sets of baseball cards. There was similar growth in football, basketball and hockey.
But the industry has found itself in the awkward stage of adolescence, possessing all the symptoms of teen angst. The legal problems of Darryl Strawberry, the former Dodger outfielder and current Giant, has brought scrutiny to the industry and might ultimately help to tighten its business practices. For now, however, there is a cloud over the industry.
“One of the things we’ve talked about during the course of things is that there was a shakedown in the industry, even without Darryl Strawberry and without the strike. There’s been a weeding out anyway, which has been accelerated,” said Camron Bussard, director of communications for Upper Deck Authenticated, an autograph and memorabilia company based in Carlsbad.
At IMG’s L.A. office, there used to be almost daily requests for hockey players to appear at autograph shows. But an assistant to agent Michael Barnett, who represents Wayne Gretzky, Marty McSorley, Brett Hull, Jaromir Jagr and Alexander Mogilny among others, said his office has not received a request in more than a month. (Gretzky does not make the autograph show circuit because he has an endorsement deal with Upper Deck Authenticated.)
Baseball isn’t prospering, either.
Said San Diego agent John Boggs, who represents Tony Gwynn and Alan Trammell, “This isn’t exactly the best of times. You just don’t see big baseball card shows anymore and, at this juncture, you don’t have the marketing opportunities, either.”
The biggest promoters are surviving. Jack Petruzzelli, who took early retirement from the Fullerton Police Department, tried to turn his passion into profit as he opened a store called 59 Innings in Fullerton and won the bid for the National Sports Collectors convention in 1991, which drew more than 100,000 people.
“It’s dropped off, but they haven’t disappeared,” he said. “It’s not like it was during the (baseball) season.”
There are obvious reasons contributing to the slowdown and several less visible ones.
--The recession. Sports memorabilia used to be compared to rare coins, supposedly recession proof. But these businesses, which perform well in inflationary and boom times, have been hurt by the soft national economy.
--Unprecedented twin labor disputes in baseball and hockey. Hockey’s lockout, which began Oct. 1, already has stopped the first half of the NHL season and is now on the verge of canceling the entire season. In baseball, talks between the owners and the union broke off more than two weeks ago.
Out of sight, out of mind. People are not taking their wallets out for sports memorabilia and autographs.
--Consumer fraud. Some in the industry believe this may be one of the biggest problems facing the sports memorabilia business. Bussard maintains that the issue of fraud has the potential for a great deal of damage.
“We would like to raise the level of consumer awareness,” he said. “With all the counterfeit stuff that continues to be the plague--no one seems to care whether things are genuine or not. With 90% to 95% of the stuff supposedly signed by Michael Jordan, it’s pretty easy to tell Michael Jordan didn’t sign it. We all know how much he signs--not a whole lot.
“It’s starting to get a little more attention. A couple of dealers in New York were prosecuted. It’s almost like these little crack houses where people are signing in the back. It’s a huge problem. It steals from the athlete.”
Bussard said he witnessed the fraud first-hand last summer. There were two baseballs signed by Mickey Mantle sitting side by side. One was $89 and the other was $109, certified by Upper Deck Authenticated’s five-step process. Bussard watched a transaction in which the cheaper item was purchased.
“You could tell it was a fraud, the signatures were different,” he said. “They asked the salesman why the difference in price. He said it was because they were from different companies. I followed them out and said, ‘Why did you buy that ball.’ They said they had a certificate of authenticity. It was a mimeographed sheet.
“Their faces fell. I felt really bad but at least they’ll know now instead of in 10 years.”
Strawberry’s difficulties have put the industry in the news, but they might not have a long-lasting impact on the sports memorabilia business. Strawberry, the first baseball player to be charged with tax evasion since Pete Rose was found guilty of avoiding taxes and served five months in prison in 1990, is accused of evading $146,000 in income tax by allegedly not reporting more than $500,000 in cash payments from autograph shows and personal appearances.
Published reports said that the IRS has been investigating Strawberry since 1991. Investigators have been interviewing promoters and memorabilia-show producers in New York, and half a dozen of Strawberry’s former Met teammates gave depositions to federal authorities.
Strawberry pleaded not guilty to felony tax evasion charges last month in federal court. His agent, Eric Goldschmidt, also pleaded not guilty to felony tax evasion, which carries a maximum penalty of five years in prison and a $250,000 fine or twice the gross loss to the government, whichever is greater.
Although some have called the Strawberry indictment the beginning of a wider probe involving baseball players not reporting card-show cash, there have been no additional indictments. Neither the Internal Revenue Service nor the U.S. Attorney’s office has indicated whether it is conducting or intends to examine the industry in other parts of the country.
Rose’s case, involving his failure to report income from appearances and memorabilia sales, had one legacy. There already was a greater sense of caution afterward. Most agents have told their clients to either not take cash from shows or to document cash and report all of it. But one agent told The Times that there are ways to stay above suspicion--such as not depositing more than $10,000 in the bank at one time or getting half the fee up front and filing the proper forms and not declaring the other half.
Most major shows pay by certified check. Petruzzelli has a policy of not paying in cash and said he has refused players’ request for payment in that form.
But Petruzzelli said he doesn’t think the Strawberry indictment will have any long-lasting impact on the industry.
“Nobody cares what Darryl Strawberry did,” he said. “He made his bed, now he has to sleep in it.”
Strawberry is being represented by Los Angeles tax attorneys Martin Gelfand and Brian Hennigan of Irell & Manella. Gelfand said he could not comment on the case. A motion hearing is scheduled for May 4, he said. A trial could start this summer depending on the schedules of the judge and the prosecutor.
Rose’s memorabilia and autograph became more valuable after his legal problems emerged. Notoriety can lend value. But that won’t necessarily be the case with Strawberry.
Bussard was asked whether Strawberry’s autograph would become more valuable.
He didn’t hesitate, saying: “No.”
Times Staff Writer Bob Nightengale contributed to this story.