My Experience With Drop 1 of Topps NFT Series 1 Baseball

A brave new world was opened to the public yesterday, and after years of playing along with Topps Digital in their apps, I felt I had to give it a try. Originally, I wasnt going to participate, as I expected the feeding frenzy to be too evident to want to brave the enormous traffic. As the countdown got closer, I felt it was worth chasing down a few packs to experiment. Ill say that my expectations were low going in, and in some areas those expectations were warranted. In others, I ended up having a lot more fun than I expected.

Buying Packs – A Complete Disaster (12pm-1pm CT)

Here is where I think my user experience was about as bad as it could get. When the original drop was supposed to take place, traffic on the site crashed the interface. I honestly do not understand how anyone could expect there to be anything less than a hoard of people rumbling for the hottest thing to hit the market in years. NFTs are quickly becoming the world’s most expensive form of collectible, and Topps should be ashamed that they didnt work with the platform to get this set up more adequately. It was a complete train wreck, and everyone who hated the queue room for Top Shot packs likely laughed hysterically at how poorly the experience with this release went down.

Somehow, after waiting for the drop delay, and then constantly refreshing, I was able to get 1 premium pack and 5 standard packs. My total cost for everything was about 125 bucks. Because of the enormous traffic, and my lack of familiarity with the NFT releases, I was a bit shell shocked by the whole thing – especially because I wasnt sure if my transaction went through. Others around the community detailed how frustrating this whole experience was, even more so when they were eventually shut out and refunded the money because packs were oversold.

Collectors were reporting that transactions were going through on their credit cards, even though they were getting errors on the screen. Most were refunded if there were no packs to be sold, while others saw giant charges stick because they didnt know they were buying multiple groups of packs.

If I was one of those people shut out, not only would I be upset, but I would have been done. It wouldnt be worth the added effort to chase down packs and cards if I knew that my original investment was basically cancelled. Hopefully Topps Digital offers some sort of make good.

Cool Down Period – Pack Market Opens (1pm to 4pm)

I wasnt aware that you couldnt open the packs immediately after they were delivered to your crypto wallet, so I started messing around with Atomic Hub and the Wax platform features. First, getting money into your wallet to buy cards from the market is a long process. You have to provide a ton of information, it has to be reviewed before your payment loads the money into your wallet for access, and for some, the platform to buy WAX currency isnt available in their area. This isnt BitCoin, which seems to be more universally accepted and easier to access, its a specific currency called WAXP, which is how the cards are bought and sold.

Although you buy packs with credit card, you buy the resales of the card with WAXP. Exchange rates are 1 WAX = ~.23 cents. During the timeframe where packs were sold out but not able to be opened, the packs themselves could be bought and sold. Most packs were running from $200 to $300 on the premium side and $30 on the standard. I found out later why it was vital to focus on the premium packs and basically just forget about the standard.

Opening the Packs (4pm)

After the traffic died down and the packs were delivered to my wallet, I was able to open everything during the designated time after 4pm CT. The pack opening was clunky and slow, likely because of more increased traffic, and a lot of issues with loading images and delivering pack contents to the wallets. Considering how advanced Topps Digital has gotten the pack opening experience to be on their apps, I was quite disappointed that it was as weirdly presented as it was.

I opened the standard packs first, which yielded 6 NFT cards per pack, usually 5 commons and 1 gold uncommon. There were chances at Epic cards, but I didnt pull any. At this point, I had zero frame of reference, so it was just hoping to get a Trout or some other good player. I was lucky in pulling a base Trout, a base Tatis, and a few other nice RCs, but that was about it. Turns out that the Trout base is worth more than a lot of the higher level stuff from other lesser players.

The premium pack was much different. At 100 dollars MSRP, it guaranteed 45 NFT cards, including chances at all the chases. I pulled 2 cards that had 70 copies minted, a 1986 insert that was set originally at 170 copies minted, and 6 Rares, which have a rainbow look to them. Unfortunately, I didnt pull any of the crazy rare stuff, but I knew I had at least my money back just from seeing the players I got.

Pack Contents – The Confusion Begins (4:30pm)

The parallel structure from a visual perspective seems really easy to follow. The more animated the cards are, the better they are. There are signature versions of some of the base cards, and rare parallels that can get down to 1/1 if you are lucky enough to pull them. With people able to buy 10 premium packs at a time, I hope those people ended up getting more lucky than I did.

Here is where things get confusing. Each card is numbered with a mint. Basically, if there are 2600 base cards from the set minted, each card has a corresponding serial number that ties the NFT to a specific hosted collectible. For some of the rare epic and legendary, it seems like they will only have the number of mints that are present in this first drop. For the stars parallel its 76, for 70th anniversary parallel its 70, and for the 1986 holo signatures, its like 13, down to the platinum 1/1s. Everything else looks like there are more drops that will add minted copies to these cards.

You can see from the pictures below, why I think this is the case:

Basically, if you are ripping the standard packs and hoping for cards that will be worth holding onto, there isnt much there that will be that. All of the good cards are in the premium packs, and that’s just a reality people are going to have to deal with.

The Card Market Opens (4pm)

Once packs started being opened, the Atomic Hub market immediately was flooded with people selling the cards that had made it into their wallets. For those few with WAXP to spend, prices were insane. Some of the rarities had been sold in the 5 figure range right off the bat, while some of the not rare stuff was still getting to $100 and over.

I decided to take my time, but I quickly realized that was a mistake. Because there was so little currency floating around, the were only a handful of buyers and a deluge of sellers. You cant just buy this stuff on a credit card or debit card, collectors need to buy the currency and use the currency to buy the cards. With the process being so involved, most people had a ton of cards to sell but nothing to buy with.

I ended up trying to list a few cards. After I listed 3 I got an error saying I was out of RAM. For a new person in this market, I had no idea what this meant. I finally sold my first card and was able to list another. They were cheap sales, but enough that I could spend 3 dollars of WAXP to buy more RAM to list as many as I wanted.

The first few sales of the big named players were gigantic, but over time, they dropped. Atomic Hub gives you a value for your wallet and that number was ever changing. Because sales on the market are 100% transparent if you know where to look, it was easy to see where people were selling their goods.

The Race to the Bottom (8-12am)

Once the Simplex transactions started going through for people, the sales started becoming more regular. By this point, I had gathered a few pieces of information.

  1. I was done wasting my time with players not named Trout, Acuna and Tatis.
  2. The lower the mint number the better the value of the card. Number 1 mints were selling for 4 figures. Jersey number mints are also a premium.
  3. If you had a higher mint, you had to be the lowest price on the market to sell your card.
  4. You had to constantly adjust your listings to make sure your pricing was reflective of the market.
  5. Buying cards listed with the wrong price by mistake and selling them at the correct price was a great way to make money to buy more cards.

With this information in hand, I started selling the junk and building up wax to buy the big named players, especially Trout. I was aiming to get the lowest mint number I could afford, because as more rounds are released the first set of mint numbers will be worth more than the second round. For example:

Base Drop 1 – Mint 1 to 2657

Uncommon Drop 1 – Mint 1 to 881

Rare Drop 1 – Mint 1 to 402

1986 Drop 1 – Mint 1 to 170

If you see mint numbers above these in future releases, you will know it wasnt part of the original drop. Historically this will mean the lower mints will be more valuable. Seems crazy, but I can almost guarantee this will be the case.

At about 9p, people started to see the downward trends of the garbage NFT cards take shape. The market started falling and it became a race to the bottom with most of the cards. I expect this to eventually level out as more currency becomes available, and as more people become more educated on the way the market works.

My Final Count

After buying and selling for about 4 hours, I ended up with about 1500 WAX plus inventory from the packs. I turned that into Trout, Trout and more Trout, plus a little bit of Tatis and Acuna. I didnt get anything likely worth holding, especially if more drops are on the way.

My best card in inventory is one of the 70th anniversary parallels I havent sold yet, and the Rare Mike Trout base. Both are in the 180 dollar range at the time of this article being posted. Overall, I have enough in my WAXP wallet to cover my original investment, plus all the cards in my inventory. If everything eventually goes to zero, I am out zero dollars. The WAXP currency will be reclaimed as soon as I figure out the cheapest way to do so.

The Future

First, I wholeheartedly believe more packs are coming. This will impact a huge part of the market. If you are a buyer on the outside looking to get in, DO NOT BUY ANYTHING WITH AN INFINITE COUNT until you see how this goes down. If you are a seller, get rid of your junk fast. If you are both, focus on the things that will remain valuable as more cards are released.

Secondly, the giant prices paid for common stuff early on should be an indicator that this market will function almost identically to the trading card secondary market that already exists. Get your stuff listed fast and sell fast if its not exceptionally rare. Again, none of these practices should be unfamiliar to people who have been a part of this hobby forever.

Lastly, I think there are legs to this type of thing, just like there were legs for Topps Digital when the apps had no ownership to the end user. It may not be insanely successful for the release of Series 1, but if they release super premium products on the NFT platform you better believe its going to be worthwhile to check those out.

Overall Experience

The lack of planning regarding pack dissemination and the lack of information about the releases of future cards on the platform wasnt good for the end user experience. The marketplace wheeling and dealing is fun if you keep it cheap. There is money to be made, that’s for sure, but I dont think its set up to be as valuable as the Top Shot moments.

Topps kind of limited themselves to a specific audience knowing that they were just basically selling NFT versions of their cards. Top Shot’s moments seem to be on a downward sales trend as well, so this bubble may already be deflating.

Hopefully this is just version 1.0 and Topps figures out a way to improve everything top to bottom.

Breaking Down the Topps NFT Announcement

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The advancement of NFT (Non Fungible Token) technology into collecting has taken the world by storm. If you are unfamiliar with NBA Top Shot, or any of the major NFT platforms, its in your best interest to take a look at what the whole craze entails. Or, if you want a pretty hilarious shortcut, go check out this SNL skit.

Topps recently announced that on April 20th, Series 1 Baseball will be released in digital NFT collectibles for the first time ever. This comes on the heels of the announcement of their going public through SPAC, based on the success of their business and digital capabilities. Because NFTs have already become a top digital collectible format across multiple markets, it should be no surprise that cards are a logical next step. This is ESPECIALLY true after the insane success of Top Shot.

Here is the announcement from Topps.

To give a bit of background, Topps has been doing digital collectibles for almost a decade now. Topps Bunt started the digital division over at the company, and that division has gained mainstream attention for the success they have had over the last 5 years, especially with Star Wars. Per the investor presentation, they did about 30 million in business in 2019, and are projecting 51 million by the end of 2022.

Just to make sure that everyone is aware, the way Topps Digital HAS done digital collectibles is not the way they WILL do NFTs, as the digital collectibles are entertainment and do not have ownership. NFTs by nature are owned by the consumer through the blockchain.

This whole concept is likely unfamiliar and unattractive to many long time physical card collectors, but I assure you that it has a gigantic market and a larger following. Sports Cards in general have exploded over the course of the pandemic, and NFTs seem to be on the same path. Like the card market, the bubble talk seems to have crept into the conversation, especially with the NBA top shot market cap drooping a bit as the market becomes more diluted.

I get it, honestly I do. People who have collected cards for 30+ years are hard to separate the physical nature of the ownership of their collections to a digital marketplace. From a manufacturer perspective, both Topps and Panini have embraced the digital side for multiple years and much success, likely as a pre-cursor to the blockchain technology that is needed to do this right.

People are like, why would I pay for a picture of a card on my phone, when I can just buy the actual card and own it physically? The reason is simple – both have intrinsic value in the secondary market. They may be different in nature, but both have value. I would say, if anyone is lucky enough to get a pack of the Topps NFTs announced today, they will see that the value of the digital collectible will FAAAAAAR exceed that of the physical one. Hard to wrap your head around how that is possible, but the easy explanation is the supply is far smaller and the demand is huge.

As Topps outlined, there will be two flavors of packs, a 5 dollar version available in 50,000 buys, and a 100 dollar version available in around 25,000 buys. Of course, like Baseball cards there are odds to pull rare chase NFT backed digital trading cards, which I would expect will go for an absolutely insane amount of money.

Here is the thing, Topps Digital built a large audience for their apps, largely composed of non-card collectors. A lot of the traffic, especially on the Star Wars and other entertainment apps, are not from the same target market as the physical card collecting public. One of the main reasons stems from the situation many of you find yourselves in right now – there just isnt a good understanding of why something like this is and should be valuable.

As recently as last year, the argument would have had some traction. None of the cards on Panini’s or Topps’ apps are owned by the people who buy them. The apps are meant for entertainment, NOT long term collecting. The NFTs are not only entirely different in that fashion, but can be traded across many platforms, sold easily, and can be produced without the same effort as a physical card. Additionally, with the finite resources for producing trading cards at full capacity, its clear NFTs have an advantage.

Because Topps Digital already has a huge infrastructure and support mechanisms for creating digital collectibles, this whole situation just sounds like a perfect fit. Even if there is a bubble that will drown the value of these cards eventually, right now the market is immeasurably strong. These cards will sell out lightning fast, and be worth a considerable amount of money. If physical collectors are willing to have an open mind here, they would see there is a lot of fun to be had, especially when you dont have to grade a card, wait for a big buy you make to come in the mail, or just want to see something explode. All of those things are native to this platform.

Is the Collecting Boom All Steak or a Card Investor Contrived Sizzle?

There is no doubt that the last 12 months have been unlike anything we have ever seen in the history of cards. If someone had come to me and explained the contributing factors that led to this new world order, I would have laughed so hard, I would have likely hurt myself. Because of the way the discourse of the hobby has shifted, its easy to see where people usually stand on the issue. Believe it or not, there sure is a lot of complaining given the utopian circumstances right now.

Collectors are usually very apt to comment on how insane it is that new wax is selling for what it is, especially for desirable legacy products. Pre-sale for once cheap and fun products are suddenly the cost of mid range products of previous years. Sets like Topps Opening Day baseball, the entry level door on the entry level of baseball products sold out in record time for its initial go as an online release.

On the flip side of that, are the investor chats, that are led by a group of accounts directly aimed at cards becoming the new darling of the high dollar world. Because there are so many new people buying, it presents a few different situations that can be an enormous challenge to overcome. First, knowing what cards to buy is inherently complicated. Hundreds of sets, thousands of autographs, and a community that has years to decades worth of experience ahead of any new entry into the hobby. With most of these people joining for the “money making potential” instead of the usual reasons to dive in, the ease by which these people can be influenced is unheard of.

As a result, there are a number of accusations of this new boom being funded much like a pump and dump grift, led by some of the social media influencers that have a huge following. Because their instagram posts, youtube videos and facebook engagements are seen by tens of thousands of hungry investors, a single mention can send cards soaring. Without any regulation in place, it can be a breeding ground for giant conflicts of interest that would be heavily scrutinized in other industries.

Here is how it could work in theory. Lets say a primary influencer or colleague of an influencer acquires a nice card, or a series of nice cards. Things that would normally be within reason to pick up, and not some super premium example that would be desirable no matter what. The primary influencer either posts about this card on their social media, lauding how much of a hidden gem it is, or that they have made a huge investment to pick up a bunch of that item. Naturally, being a big influencer, these posts are shared all around and the lemmings head to eBay to pick them up. Within days, the cards have shot up in value, and the original individual can now sell their investment at a multiple of what they paid.

This is an oversimplified example, but there are some major red flags that are popping up all over the place. Giant deals between friends publicized to inflate value of other copies, or similarly important cards. If it happens frequently enough, and enough of the new eyes get wind of it, the original artificial pump and dump becomes lost in a sea of sharks looking to capitalize.

If we go back in time, this isnt the first time pump and dump has been widely accused a number of times, most notably on message boards in regards to Michael Jordan cards. Many users of these sites devised that a small group of collectors were working together to increase the value of desirable and or rare Michael Jordan cards from the late 90s and early 2000s. Although nothing ever came of it, whenever a big sale would go down, post after post would pop up detailing the intent.

In terms of the current threads, I have seen accusations thrown around that range from small inflations to enormous conspiring groups, and all of them seem plausible, if not only because the public is behaving in such a ridiculously inconsistent manner. Not only does this spur more speculation of a bubble, but it points to other examples in financial history where similar schemes have been enacted with varying levels of success.

This situation is only further exacerbated by the burgeoning creation of investment services, run by well informed collectors who seem to have a following of people paying them for advice on which cards are the next to explode. The most recent example is the series of Jay-Z cards that were released in Topps products earlier in the 2010s. These cards went from generally inexpensive to highly coveted in a matter of weeks, spurred by influencers on Social Media talking about them non-stop.

This Rare Jay-Z Trading Card Just Sold for a Record-Breaking $105,780 –  Robb Report

Funny thing is, I would expect that because hobby discourse has become spread through so many platforms, there is as much hype generated by collectors just openly communicating about fun things they find as much as it is planned pump and dump schemes.

Being that I am generally disconnected, most of what I am picking up is second hand information, all considering that my main focus in this hobby is still generally unaffected by the boom. I have a feeling we will be discussing these types of situations for years to come, and I would guess the muddied waters will make things very complicated to trace. Other times, it could be easy to trace a wave back to the pebble thrown in an ocean. As I have said for 10 plus years on this blog, if there is money to be made, there will be many people who look to exploit the uninformed to make more of it.

Examining the Importance of Chrome Stock Cards in the Hobby’s History

There arent many products that have the brand loyalty that has been built by Topps Chrome and it’s sister sets, or Panini Prizm and it’s sister sets. I think there are sets that end up being more valuable, but overall, from a popularity and importance standpoint, the chrome stock family of products are the most important aspect in the history of the hobby.

Yep, I’m leading with some MEGA hyperbole, because as we have seen with recent 7 figure sales of some Chrome cards, there is nothing that people want to have more for their collections than the iconic examples from over the years. More importantly than that, the cards achieve these insane values with a much lower product cost and much higher availability than just about any other product has ever had on the market.

Think about it, Exquisite and National Treasures bring the most valuable cards around, but the availability of those products pale in comparison to the products like Prizm, Bowman and Topps Chrome. Its actually shocking to me that Topps gambled so large with the first release of Finest and hit it so far out of the park that 30 years later, we are still living that premium approach in a giant portion of the hobby releases.

When reviewing the legacy here, it should go without saying that the way both Topps and Panini were able to create value in cards that have no autograph and no relic, is pretty admirable. The era in which these cards made the most of their mark was characterized by cards who’s value stemmed from autograph and relic content. Its impressive that both companies so successfully worked around that for so many sets.

Both Topps and Panini each release 20 or so versions of a Chrome stock product each year, which is saying something about its overall importance. The hobby has responded in kind, with Chrome stock products being the most heavily graded cards in the history of the hobby. Even during the most down periods of the hobby, people still loved the cheap fun that these products delivered, and in Topps’ case, they rarely made a mistake in the way things were built. Its a legacy of excellence that might not ever be overtaken by anything.

Panini Prizm, or as I have affectionately called it the past, “Diet Chrome”, has taken on a life of its own. Panini effectively owns like 80% of all the trading cards sold in the US, or some ridiculous number like that, and Prizm has become their go to set for driving a new license and creating margin in their product lines. Because Prizm has almost exclusively become the card of record for some of the most important NFL and NBA players, the exclusive license has made it the most important vehicle Panini has.

Funny enough, Prizm doesnt have the same excellent track record that it should have, if not only because the 2012 sets through the 2014 sets were some of the ugliest products ever made. Similarly, since it’s inception, it has always been the imitator rather than the originator. Go look at 2014 Prizm Football. That shit will haunt your fucking nightmares for years.

In 2015, when Topps was on the verge of losing their NFL license, something changed with Panini, something I think was THE best choice they ever made in the course of their trading card dominance. They decided to make Prizm much more like what Topps releases every year with Chrome, opting for simple bordered designs coupled with simple game photos to really re-create the iconic formula that Topps perfected.

This choice transferred over to Basketball, and in turn, created sets like Mosaic and Optic, which have never really reached the level of importance that Prizm has had.

On the Topps side, the creation of Finest in the early 1990s changed the face of Baseball cards forever. When it eventually came to the NBA and NFL, Topps Chrome was along for the ride, giving kids like me a window into the high end world of premium card collecting. To this day, Chrome remains my favorite set ever, and I will always buy a box every year for as long as I can afford it. I have sold my sports collection twice over, and each time, I have kept the chrome examples of my favorite players out of sheer reverence.

The main issue for Topps, is that they have lost all but a few licenses in their arsenal, something that could eventually change with the exploding landscape of the industry. Even with a dwindling presence over the last 8 years, they have managed to keep afloat because the Bowman Chrome and Topps Chrome lines remain as popular as they have ever been.

Prospecting in Baseball has become Baseball cards, only made more furious by the recent focus on rookie cards now claiming five figure sales so frequently. The sale of the Mike Trout Bowman Chrome Superfractor and the Kobe Bryant RC at more than a million have also brought a spotlight to the ongoing legacy that these cards have.

Similarly the rare late 90s inserts from top NBA players in the hobby have always driven ridiculous prices, but now make those prices look like ants seen from an airplane. Panini wasnt around when card companies could make Michael Jordan cards regularly, and they werent around when LeBron James, Tom Brady or Kobe Bryant were rookies. Topps and Topps Chrome were prominently featured, and that presents a giant advantage in the way collectors see Chrome’s importance in the long run.

That’s not saying Prizm hasnt driven its own fair share of eye popping sales, just look at what has happened with exclusive era Prizm rookies of Giannis, Patrick Mahomes and others. They are always among the top sales on eBay, and will continue to be long after the hobby potentially goes back on the decline.

When the dust settles and we can look back on this period in the history of the hobby, I dont think there will be a single person that can point to either brand and really complain. Its been such an important piece of hobby life over the last 30 years that its never going to be on the sidelines. I think its crazy that the current boom is defined so heavily by products relying on Chrome stock, but I guess that given the consistent performance and undying collector loyalty, its a no brainer.

Trading Card Exclusive Licenses Are the Next True Battleground

Ill start off by saying that I hate exclusive licenses. Every collector hates exclusive licenses. Every sport has an exclusive license partner, which makes things worse. If you collect Baseball, you are buying Topps cards. If you collect Basketball and Football, its Panini. If you collect Hockey its Upper Deck. Because most collectors collect more than one sport, having one choice in each area becomes the most frustrating part of their hobby life.

On the other hand, manufacturers love exclusive licenses. It makes everything easier. From obtaining material to embed in the cards, to licensing autograph content, it becomes the best tool in their tool bag. It also builds lasting relationships, which in most cases, is just as valuable.

Why Are There So Many Exclusives?

This is going to take a bit to explain, so bare with me. League licensing is one of the most complicated and fought over parts of the industry side of the collecting hobby, and even with exclusives, it doesnt seem to get easier for the people involved.. Most of what I am going to say is second hand, but received from 10 plus years of direct communication from people who work at the manufacturers.

Back in 2006 and 2007, the seeds were planted for the situation we find ourselves in currently. Most of the sports had at least 2 licenses that granted the manufacturers the ability to produce cards with professional logos and professional players. One side is the “Properties” arm, which is all about the likenesses and names of the teams, stadiums, games, etc. The other side is the Players’ Association side, which gives access to use the likenesses of the active players themselves. There are other licenses that go along with these, including some for groups of retired players, the hall of fame, stuff like that.

Additionally, for almost every sport, there were at least two companies that owned both sets of licenses. Most of these licensing arms have been in place for many decades, and most of the time prior to the mid-2000s, leagues were much more likely to give them out to people who were interested in trying their hand at trading card production. This is the main reason why Upper Deck was able to storm the hobby in 1989, and release a Major League set – licenses were SEEMINGLY easier to come by and likely cheaper for card companies.

Things changed for a few reasons, need for access, need for content, and one other giant thing – money. When Upper Deck wanted to use the license to produce MLB trading cards in 1989, they only needed one thing from the league itself – access to take photos to use in the cards, and as the internet became more prevalent, even that became less of a need. If Upper Deck needed to make MLB trading cards in 2009, everything would have been infinitely more dependent on the league.

First, each league approval process had likely become much more stringent with protection of the brand as important as anything. There were also more products included in a license, sometimes more than 50, which required more headcount for approvals and processing at the league office, and thus more resources.

Secondly, with the addition of autograph content that drove 100% of the products released, access to the players became essential and necessary. The players’ associations would need to ensure that the players cooperated, or their license wouldnt be as valuable either.

Lastly, the content is also driven with pieces of game used material, which means that access to authentic jerseys for as many products as possible would inevitably fall on the league as well. If people wonder why Panini and Topps have switched almost entirely away from game worn, this is the reason. Game worn jerseys are sold by the league, valuable to collectors, and are hard to authenticate if the league doesnt provide them. Ill get to this more in a bit.

This is only a minor complication of the plethora of complications, some of which just stem from volume above everything. In 1982, there were like 2 products a year. In 2002 there were 20-40, in 2012, it was double that. You can see from a league perspective, that’s a lot of work for a part of your licensing arm that pales in comparison to something like sweatshirts and hats.

Remember, in the mid 2000s and well beyond, every week there was an article in the paper about how things have dwindled down, shops closing, shows empty. You can see why the leauges wanted to simplify their card existence. They just wanted things to be easier with cards.

Then something else happened – Upper Deck found themselves in a bunch of problems stemming from money, and even more problems from lawsuits with other licensors. For years, Upper Deck and Topps were the most important licensor in the hobby. Similarly DLP (Donruss, Leaf and Playoff Brands) was struggling, and Fleer had gone out of business.

Within a few short years, Upper Deck’s trouble had led to a loss of all of their major licenses, and a group from Italy known for sticker albums had purchased DLP to distribute a new brand of trading cards. Not only did this bring new consolidations of power, but also a new influx of influence and money that was absent prior. When I was writing this site back then, I commented how Panini’s new power was in their available cash. Topps was being bought and sold, and Upper Deck was reported on the verge of bankruptcy at least once a month.

Panini’s stability also gave the leagues something that they desired as well, money and resources. They knew that by giving Panini the exclusive license to their sport, they would solidify a stable avenue for the production of trading cards, and keep money coming in. By all accounts, Panini also overpaid by a drastic amount for each negotiation they were looking to become engaged with. You know what happened? They won, a lot.

The NBA was the first domino to fall their way, NFL being a huge win in 2015. NHL was theirs at one point too, leaving the Topps exclusive with MLB the only outstanding license they could never acquire during this run. They did manage to pry an exclusive away from Topps with the MLBPA, allowing them to use logo free designs with current players.

You should start to see a clearer picture of why this was happening – cards just werent that important, stability and money are important, and hence, the exclusive life began and continues today. The question is, how will licensing change now that cards are a top story, million dollar sales are national news, and investment in collectibles are the most surprising thing to come out of the pandemic?

League Licensing Battles In the Future

When a commodity is hot, the barrier to entry becomes that much more thin. Although there are still huge barriers in place, the desire to partake in the hottest thing out there can do some crazy things. Especially if you are a company with the means or methods to enter a market, and brand recognition isnt an issue.

Most of the league licenses are in place with exclusivity for a few more years. Topps has MLB through 2025, and Panini and the NBA/NFL are likely in a similar situation. In terms of hobby life, that is a long time. From a company perspective, it really isnt that long, as negotiations on a hotly contested commodity can go on for a long time. This means lots of prep, lots of posturing, and as we saw the last time the NBA license came up, some gamesmanship.

The world of the licenses has changed so dramatically over the last few years, one has to wonder what could happen if the bubble I referenced in the previous post comes down, or if things only get hotter.

Undoubtedly, the cost of the licenses is going to get quite a bit more competitive, especially now that there is leverage on both sides of the equation. The leagues have a lot of power, because there will be desire from every previous card manufacturer to get into a licensing position, and more desire for the leagues to likely want the piles of cash from multiple sources instead of just one. Right now, there is barely enough supply to cull demand, and that is creating huge secondary market volatility. The secondary market’s performance showcases there is enough to support multiple companies, and that is a HUGE piece of hand in the relationship.

Secondly, because each license has all of a sudden become insanely profitable, all manufacturers currently in business have plenty of money to throw at their business and the league. That includes the companies in power for each exclusive. Panini and Topps have more money to fight for the right to remain exclusive, as well as other companies like UD and Leaf have to show that they deserve a shot at a shared license. Because UD has a legacy of cards unlike any company (both good and bad), they have a lot of power to move their station higher in the consideration. Their history may be a red flag in a down industry, but that might be overshadowed now.

Topps has a huge runway as well, because their brand recognition is the top in the game. Even though Panini makes more cards than anyone these days, the choice to use an unfamiliar name that is shared with a grilled pressed sandwich means that they have less in their name than any other company. I would venture a guess that most casual Americans would know that Topps, Upper Deck and Leaf all make trading cards. Panini, very few would be able to identify outside the food connotation.

Player Licensing is Going to Change the Game

Right now, there are exclusives in place for players as well as for leagues. That’s why Michael Jordan hasnt had a card since Upper Deck lost their last licensing method to produce basketball cards. He has an exclusive partnership with Upper Deck, much like LeBron James, Tiger Woods, and a few others. Panini has them too, Topps as well. It used to mean a lot more, when shared licenses meant having to keep the biggest names for yourself.

Now, it means little to nothing, because few players would be able to appear in other products outside the ones officially licensed by the league. A few things have changed, however.

The craziest part of this entire thing is that athletes have become some of the most important drivers of the boom. Prior to 2020, most athletes saw cards as another thing they were required to participate in. Some even hated signing so much, that they dropped out of the game completely.

Obviously there were exceptions to the rule, but for the most part, athletes never really saw any potential in cards, unless they had nostalgia of collecting from when they were younger. With most of the rookies now being born past the original collecting boom back in the mid 1990s, the fun factor was greatly diminished before this year brought everything to the forefront.

You can imagine that if players like Deshaun Watson and Kevin Durant are taking cards seriously, their buddies and their agents are as well. Some players have historically been very involved with every aspect of their brand. Ask Russell Wilson. Now that cards have become such a gigantic source of potential funds, there could be humongous impact for those players with leverage.

Here is the caveat – every player covered by the PA license will continue to have trading cards if needed. The cost of adding autographs to those cards is a different story. Players have control over how much they charge per signature, and that’s where the volatility could impact their inclusion. More importantly, in some sports, the autograph has become a less important part of a set, with more and more focus on rare cards created through serially numbered parallels. This situation is a complete departure from previous years, and as with every negotiation, each side has their perks.

The same could be said for legends and retired players, as their licenses are rarely done with the same stroke of the pen as the league licenses are done. Many retired players join licensing groups or offer their own permissions, and with card prices soaring, all of that is going to change. This also means that their usage could be deemed unworthy and removed due to the cost of inclusion versus the value of inclusion. Once a player is no longer covered by the players’ association, it falls on a number of different levers to deteremine their worth to the overall trading card industry. For important guys, that could be one source of negotiating power, for others – it could be the end of their time on card fronts.

Overall, this is going to come down to sustainability. Can the bubble be sustained? Is it a bubble? Will the leagues consider this time as a benchmark for potential popularity? All of these things are going to have a ton of impact on the licensing future of trading cards. The more that card values and sales figures dip and rise, the more question marks are created. If anyone believes that this is the final form of the industry, money always has an effect. Right now, there is more money floating around than any other point in trading card history. Its time to see what that means.