Thursday, February 11, 2010

Upper Deck from Past to Present

By Ryan King (SMBA '11)

This past Thursday, the SMBA class had the opportunity to hear from Jason Masherah, Director of Sports Brands for The Upper Deck Company. Jason began his talk with an overview of how he reached his current position with all the ups and downs that went along with his success, such as working for free. In doing so, he showed us a clip from the movie My Date with Drew. The movie is about a young man's quest to meet Drew Barrymore and how he goes about doing so. Jason equated the sports industry to the movie because it is all about networking and building upon relationships. Jason encouraged us all to check the movie out when we had some free time and to set up as many informational interviews with industry talent as possible.

After talking about getting to get to where we want to go in sports, Jason talked to us about his industry, which is trading cards and memorabilia. Baseball cards date back to 1897 when tobacco companies used cards to promote their product. Over time, many new trading card companies were created. Upper Deck was founded in 1988, with their first line of baseball premium trading cards that included the last so-called “icon” card: the Ken Griffey Jr. rookie card released in 1989. By the early 1990’s (Golden era), the card business hit its peak with estimated sales of $1.2 billion and over 5 thousand card shops. By 1994, card companies started going out of business and today there are only three producers of trading cards and sales have fallen to $200 million.

Jason asked our class a simple question, “How many of you collected cards growing up”? More than half of the hands went up in the class. Then he asked us, “How many of you still collect cards?” Not one person raised their hand. What caused this decline and what can be done about it? We learned that the market became saturated with too many products, brands, and that the cost of a pack of cards went from 50 cents to over $5 dollars on certain brands. This drove away the key consumers: children 8-14 and their parents 35 years and older. The decline could also be related to the indirect entertainment competition that is greater now than ever. The youth today have more access to electronics than ever before. When most of our class was collecting cards, a piece of gum or a limited edition card is what we could look forward to in a pack of cards. But today, the industry has become so competitive that Upper Deck began inserting pieces of game-worn jerseys, hair from Kentucky Derby winning horses, and other gimmick related items to sell their product. Upper Deck realizes that to regain some of the trading card allure, it will have to start with the youth. They have already spent over $11 million on youth initiatives. Upper Deck seems to be headed in the right direction related to moving their brand forward.

We also learned that licensing is critical to the future of Upper Deck and the other two trading companies. If one company has control over all products produced they can monopolize that league and the revenue produced from their cards. Upper Deck signed their first exclusive licensing deal with the NHL in 2004 and currently has the rights to MLS and the WPS. Three major leagues (CLS, NHL/NHLPA, NFL/NFLPA) are currently being fought over between Upper Deck, Topps, and Panini. The viability of Upper Deck could be related to landing all three deals. We also learned that Upper Deck is in an interesting place with MLB as it relates to their licensing. MLB just signed an exclusive rights deal with Topps to portray MLB logos and uniforms, but Upper Deck has a deal with MLB’s Players Association and all 1,200 members. The question at hand is how can Upper Deck produce a baseball card without a team name on its jersey and hat? This is a question that Upper Deck is fighting in the court system currently, so Jason could not go into great detail on the topic. Our class really enjoyed the presentation by Jason Masherah judging by the number of questions asked and the dialogue that followed. On behalf of SMBA ’11, I would like to thank Jason for speaking to our class.

1 comment:

  1. Great Blog. I do miss trading cards, especially the upper decks. Does this mean I should sell my Michael Jordan rookie card, because it's worth about as much as Sam Bowie's rookie card? Good work.