Breaking Down Theories on Diminishing Returns

There are some major issues with football cards right now, and many of them look to be getting worse rather than better. In many ways, the same could be said for all sports, but ill frame it in Football because of the pending exclusive that will be running train on the hobby in 2016 thanks to Panini.

One of the biggest issues that I have is product shelf life, which has taken hit after hit over the last few years, to the point where even good products have a shelf life less than 2 weeks. It used to be that when a new set hit, the cards would hold up well. They would start high, but only drop 20-30% over a long period of time. In today’s hobby, cards can drop 30% over the first week alone, and sometimes end up at 40-50% of their first day value. That is a sharp drop off from what we are used to seeing.

Even worse, if a product is a new set or a dog, the cards may not even have the luxury of 2 weeks. I have even heard manufacturers try to build product proposal plans knowing that the goal is to have over 60% of the run opened in the first two weeks. That never used to be a discussion that had to exist. Rookie class performance can also be linked to declining prices, or even how many products rely on them to be successful.

This begs the question of why the decline continues to persist, and what it might mean come 2016 with the pending transition to a one company model of doing business. There are a few theories that are worth considering, and Ill talk about a few of them below.

Theory 1 – The Hobby is Shrinking Rapidly

If you havent heard this theory floating around, you have had your head buried in the sand. Let me make sure to explain that when I reference the hobby, I am referencing the customers, not the manufacturers or dealers.

To be honest, this is not a crazy theory either, as its clear that there are less people in the hobby today than ever before. The debatable point is whether the decline will continue at the pace that it is at, or if the pace will slow/pick back up.

I stand by my assertion that the hobby will never die, as there will always be people who want to collect cards. If people collect old parts from boats, there will also be people that collect cards. However, this does NOT mean the industry will continue to be sustainable, which is becoming more and more evident by the day. I dont see many of the card companies rolling in money, including Panini who seems to have a relatively blank check from “Big Daddy Italy, Inc.” to produce cards on American soil. Card companies are in a tough spot, and it has led to business practices that have weeded out casual collectors at every turn.

Because the cost of existing in the card business has increased, and no one is willing to change the way they do said business, the industry has suffered. Product prices have increased without adding much content, and that has driven people away.

With collectors being driven away, there are less people to buy the cards for sale, which leads to a reduced perception of value in the end product, and lower sales prices. With lower sales prices on the secondary market, fewer people are opening boxes, which leads to less money in the pockets of the card companies, and you see where I am going.

Product shelf life reduction can be argued as a sub point of the above debate, even when initial prices are high. The reason the prices are high to begin with stems from the people who want to either A) collect a player, B) collect a team, or C) collect a set. There are other factors like national attention or player performance that can also impact things, but A, B and C are all the main reasons. Player and Team collectors will overpay, but if there are less of them around, prices will drop more quickly as the remainder pick up their target cards.

At the same time, casual collectors tend to be more susceptible to hobby trends and buying into hype, but with less around, those prices will no longer be supported as long. Its really too bad, because football is literally the most popular sport in the country, yet the card business for the NFL is the most unstable. Very interesting.

Theory 2 – The Economy is to Blame

Cards are all about spending discretionary income. Always has been, always will be. When people have money to burn, they spend it on items that contribute to 3 things – Power, Sex and Happiness. Cards obviously are adverse to the first two, but its always a good time to do something you enjoy.

During the last 10 years, the US economy has been in shambles, arguably until the last year or two. Even then, it still hasnt recovered fully. As a result, more Americans are opting to save their discretionary income rather than spend it, and that impacts all within an industry like Sports Cards. With the cost of a box on the increase, and available funds to purchase on the decrease, the formula doesnt work out.

In all reality, there is no way the economy cant be PARTIALLY to blame, especially when you consider how many shops closed up doors in the last half decade. The last estimate I saw was that fewer than 1000 sports card shops remained in the entire US, and I think that might be generous. Of those 1000 or so shops, Im guessing 5% are in a position where the store has no issues with hitting monthly numbers. The other 95% are likely struggling or at least on that edge of struggling.

Now, this isnt all a direct result of the economy, and many would argue that online retailers have cut drastically into the way these shops can make money, but its all a factor.

Theory 3 – Online Retailers and Ebay Have Ruined Things

I am not one that subscribes 100% to this theory, but it has a lot of merit. I have seen arguments made that eBay has brought value to the forefront of the hobby more than ever, and as a result, people have been conditioned to think in terms only related to money.

Personally, I dont think this is all truth, as value has always played a part in cards- an intrinsic part – even before eBay. That’s why Beckett was able to make money drawing their price guide listings out of a hat and calling them gospel.

Where eBay and online retailers have made their mark is in availability. Ebay is open 24 hours a day. COMC is open 24 hours a day. At any given time, almost every card in existence is available for sale. Its no longer the same chase in a lot of ways.

The years of collectors driving show to show and shop to shop to complete their sets are relatively over, as are opening pack after pack of cards trying to pull that one short printed card. Chances are, you can get it right now, and it doesnt have to cost you all that much MORE money to do so.

Access to a product can diminish demand over time, as unavailable products are always more in need for the people that want them. I posted a few weeks back that its no longer worth it to open any box of cards, and that remains the truth. Its even more evident when you can buy whatever you want whenever you want, with few exceptions.

That’s not saying that price isnt impacted by eBay or that value isnt at the forefront of our minds. They are, especially when a new product hits shelves. If the perceived “ebay value” isnt up to par, the product tanks. Yet, we still see companies trying to cut corners and put out poor content with the hope that something will catch on.

Theory 4 – Distributors Impact Everything

Right now, a collector cannot go to Topps or Panini and buy a box at a competitive price directly. They have to go to a third party, or in some cases a fourth party. Even many of the shops out there dont buy direct from the manufacturer, because for decades, distributors have run the show.

Allegedly, they set prices, they hoard inventory, and most importantly, they offer the most competitive prices. Why is that such a big deal? Mainly, it can give the card companies an out if their product doesnt sell. The closeout structure allows them the opportunity to unload unsold products at drastically reduced prices, thus making it easier for them to clean up the bottom line, and rid themselves of the burden an unsold product creates.

None of the card companies want to sit on unsold inventory, because for the most part, it costs money they dont have. Warehouse space is limited when you produce 16-30 products a year, and they would rather unload it to someone who can afford to store it, than let it rot in their own space.

This leads to drops in prices, in most cases. It also puts the local shops in a VERY difficult situation mainly because they would have needed to buy it at normal cost. This is why online retailers can sell at 30 to 40% off hobby store prices in some cases. They just didnt have to pay as much. Its a vicious circle, as it can impact every stage of the game.

On the flip side of it, allocations on a hot product can also favor the distributors, who can put a stranglehold on the river of available product if they so desire. Theoretically, if a hot product is making waves, and they know that they can hold back allocations to increase price, there is nothing anyone can do to stop them. There are some products where a single entity can own huge percentages of a print run, and yet only sell it in small portions to manipulate prices.

The latter is a RARE situation, but it will have a negative influence over other products who are seen as very available and over supplied. In almost every case, the distributor is in a win win situation.

Hell, if a product cant be moved? Dont worry, here comes a Black Friday or Father’s Day promotion that will help. This is only the tip of the iceberg, trust me.

Which Theory is Right?

All of them. Plain and simple. All of them are correct in some ways, and that is what is so scary about this whole situation. With Upper Deck and Topps both in the hundreds of millions in debt, and Panini not really making all that much money (if any), one has to question where we will be in 10 years. Shit, one has to question where things will be in 5 years.

With the absolute fuckload of money that Panini paid for the NFLPA exclusive and more for the NFL exclusive, it should be obvious that they will need to do something drastic to make that money back. They need to be profitable, and its only going to happen one way. They have to make more products, and they have to expand their portfolio.

There are people who will likely say they have confidence that Panini will take that seriously and deliver higher quality goods, but their track record doesnt reflect that. Without incentive to be creative due to lack of licensed competition, apathy and indifference sets in. Look at every exclusive that has ever been instituted. It rarely works out well for anyone.

More importantly, the people who come out the other end looking the worst is the average collector. I have commented previously that Panini is out to own every exclusive that is possible. They currently own all but Hockey and Baseball. If things continue down the path we are on, they will be the only company left standing that produces pro league licensed cards.

The worst part is, it will not be because they have produced the best product, or even had the best business practices. Its because they have a parent company that has the money to float all the losses they incur. That only serves to reinforce how bad things have gotten, as the best company who produces the best cards isnt the one left standing.

On the Radar: 2014 National Treasures Extended Preview

Here is the previous write up on the first preview if you want more commentary about the cards.

Today we got a deeper look at 2014 National Treasures, and for the most part, it looks better than it has in previous years. Up to this point, I dont think Treasures has deserved the brand equity it has received, as there have always been better looking products that should be recognized above what Treasures has represented.

Here is a quick break down of previous years of National Treasures:

2006:Brandon Marshall Rookie Patch Auto

2007: Calvin Johnson Rookie Patch Auto

2008: Jamaal Charles Rookie Patch Auto

2009: LeSean McCoy Rookie Patch Auto

2010 (My other favorite year): Rob Gronkowski Rookie Patch Auto

2011 (My least favorite year): Demarco Murray Rookie Patch Auto

2012 (A bad one): Russell Wilson Rookie Patch Auto

2013: Eddie Lacy Rookie Patch Auto

When it was released as DLP’s answer to Exquisite in 2006, it never lived up to the best of the best. Stickers for the product rarely performed the way Exquisite’s 100% hard signed product did, for good reason. Although they added hard signed rookie cards in 2007, the product was 90% stickers until 2013. Even then, it still had a ton of sticker based content. In 2010, when UD lost the NFL license, Topps released Five Star for the first time. It looked better than Treasures, it was all hard signed, and the compact checklist was stellar. Yet, by default Panini got the new top spot. Its sad that is the case consider how much better other products have been. Collectors are weird in their loyalty.

As we roll into 2014, National Treasures is being shown up again, this time by products from┬áPanini’s own stable. Both Immaculate and Flawless have made NT an afterthought, and Five Star football looks great for the fifth year in a row. Funny enough, this might be the best that the rookie auto patch cards have ever looked. It could be a waste, depending on how the collectors compare it to previous releases.

I think it goes without saying that the big belt buckle design in 2011 was the worst that NT has ever looked, and this will look significantly better in almost every single way. The cramped rookie auto patches in 2012 were similarly horrendous, but this will be better ten fold. But, because those products went up against only Five Star in 2012 were similarly horrendousand a late release of an NCAA branded Exquisite, there wasnt a real competition. This time, that wont be the case, especially with Immaculate looking as good as it does.

Panini is going to have a very interesting issue on their hands come 2016, with a need to build many more products than have ever been required in any league from one company. If they still want NT to be their big release at the end of the year, they need to play their cards in a more strategic fashion.

Even though the patch autographs look great with the simple approach, the set will automatically go up against the examples we will see this week from Immaculate. I have ZERO confidence that Panini will make the right call, and from what we have seen to this point, you should too.

My Argument Against Oversized Jumbo Patch Cards

I stand by the statement that the jersey card is dead. Although card companies want you to believe that it is still alive and kicking, its not. Its filler at this point,even more evident by more and more cards trying to go a different direction in the structure of their “hits.” Because the quantity is so great, collectors have lost interest in paying good money for jersey cards, with one major exception – one type of jumbo style that I am very upset about.

If a relic has some crazy patch and is oversized, the collector base goes bonkers. It doesnt matter if the card is just a half inch border on a large piece of material, or if the relic is worn for 2 seconds at the Rookie Photo Shoot, people want it.I am sad that we have gotten to this point. Here is what I am talking about:

2014 Limited Odell Beckham Jumbo Patch RC

2012 Platinum Drew Brees Jumbo Patch Auto /5

2012 National Treasures Roddy White Jumbo Patch /4

2013 National Treasures Le’veon Bell Hats Off Jumbo Patch Auto

2014 Immaculate Baseball Bryce Harper Jumbo Letter Patch

The scary thing is, with the relic cards looking the way they do, the card companies dont even have to put much work into the look and feel of the card. They dont even have to make the card look good as long as the swatch is huge and has a ridiculous patch. I have always been someone that gravitates towards the players on the cards, as I feel as though there really is no reason to celebrate a card where the subject is not the focus. What is the point of buying a card of your favorite player if they are crammed into a corner?

Panini has been previewing a product stuffed to the brim with cards like this in 2014 Immaculate football, and it only goes to show where they are trying to place our attention. Despite the fact that the autograph cards are looking as good as any Panini product (or Upper Deck product if you saw my previous post) has ever looked, Panini is leading us to believe that their under-designed oversized relic cards are a bigger deal. It is beyond disappointing to see that they are actually correct in a lot of ways.

I know me bitching and moaning on here is likely not going to change the mind of the general public, but I hope that everyone can see my perspective here. We are literally rewarding the card companies for putting in less work, and letting them off the hook on creating ugly cards with no redeeming part other than the content of the patch. Card companies should separate themselves by finding awesome ways to do both, similar to what we see in Silhouette style presentations. They will say those cards are too expensive to make, but I think they SHOULD be worth the investment. Instead the sheep migrate towards the Panini style of showcasing a patch off of one of the FIFTY – yes you heard that right – FIFTY jerseys used for each player at the shoot.

People, I urge you to demand more. When Panini takes over the NFL license in 2016, they will no longer have the incentive to be creative as the only game in town. Speak with your wallets and show that you do not want to put up with this shit. That’s my two cents.

The Most Interesting Hobby Rookies of the Last 10 Years

The NFL is as much about rookies as any other sport in the hobby. So much of the product calendar is about the class, that much of the licensing for the league is built around it. When a good rookie class happens, the NFL hobby is in a good state. If the rookie class is bad, like it was in 2013, good bye. Here are some of the rookies that I have found the most interesting.

2014 – Odell Beckham Jr

Its not that he came out of nowhere, because he was a mid first round pick. It was the fervor in which he rocketed to the top of the class when he returned from injury. Beckham didnt even play the whole year, but he performed in such a maniacal fashion that the hobby jumped on board almost instantly. For a WR in football cards to have the value he has over famous college QBs like Manziel, it takes a lot.

2014 Flawless Odell Beckham Jr. Jumbo Patch Auto

2014 Bowman Chrome Odell Beckham Auto Refractor

2014 Contenders Odell Beckham Cracked Ice Ticket Auto /22

2014 Topps Platinum Odell Beckham Superfractor Auto 1/1

2013 – Eddie Lacy

For a team that lives and dies by the passing game, it was very interesting to see the way Eddie Lacy performed, even without Aaron Rodgers for most of the second half. He was a second round pick, but he was on a highly collected team, leading to some hobby relevance. Usually, for a running back, you need to break out like gang busters to make it work in the hobby. Lacy was lucky the rest of the class was so bad.

2013 Topps Five Star Eddie Lacy Auto Inscription

2013 National Treasures Eddie Lacy Auto Rookie Patch

2012 – Russell Wilson

The reason Wilson gets the nod over Luck and Griffin (the 2012 ROY), is because he was never supposed to be as good as he was. The Seahawks drafted him as a project to sit behind Matt Flynn, but Wilson was so good in the workouts and preseason, they had to give him a shot. Although he didnt really get his footing until the second half of the season, he almost became an immediate hobby superstar. Two Super Bowls and one ring later, he still is near the top.

2012 Exquisite Russell Wilson Auto Rookie Patch

2012 Contenders Russell Wilson Auto Ticket RC BGS 9.5

2011 – Cam Newton

I was not a Cam Newton fan, and to this day, im still on the hater side of his fan base. That being said, he broke almost every rookie record during his first year in the league, and his cards were insane during that time. He hasnt been able to replicate that success again, but man, he was nuts during 2011.

2011 Topps Five Star Cam Newton Rookie Auto Patch

2011 Exquisite Cam Newton Rookie Auto Patch Tag Logo

2010 – Tim Tebow

Although Sam Bradford was the hottest rookie and ROY, Tebow was the story of 2010. To this day, there is still a legion of fans that want to see him get another shot. I was not among those individuals at the time, but I was in the hobby minority there. He only started 6 games with less than stellar results, but he made waves like no one had ever made with his amount of talent. He was probably better suited to play a position other than QB, but that didnt stop the hobby from going gaga over him.

2010 Contenders Tim Tebow Rookie Ticket Auto

2010 Triple Threads Tim Tebow / John Elway Booklet Relic Auto

2009 – Percy Harvin

Although Sanchez and Stafford became hobby favorites, it didnt happen until the following year. Harvin was the man in 2009 when it came to hobby interest, although Mark Sanchez did become a close second. As a dynamic playmaker for the Vikings, he became a guy who many collectors wanted to have for their displays. Since then, he has relatively fallen off the face of the earth, save his Super Bowl performance in 2013.

2009 SP Authentic Percy Harvin Auto Rookie Patch

2009 Ultimate Collection Percy Harvin Auto RC

2008 – Joe Flacco

Never having played at a prestigious program in college, Flacco was a question mark coming into the 2008 season. The hobby was lukewarm in its response as well, until he rode the Ravens top defense to a playoff berth. Since then, he hasnt really caught on the way one would expect, which I credited to his vanilla persona in the spotlight.

2008 Exquisite Joe Flacco Auto Rookie Patch

2008 Bowman Chrome Joe Flacco Orange Refractor Auto /15

2007 – Adrian Peterson

There was a lot of buzz around the 2007 class, especially coming off one of the most buzz worthy classes of all time in 2006. Peterson turned heads prior to the draft, but injuries were a concern. When he set the NFL record for yards in a single game, the world exploded. He became a hobby superstar much in the way Beckham has this year, and even with a scandal, he is still one of the most valuable active running backs in the hobby. Just goes to show you what people think about his career.

2007 Topps Chrome Adrian Peterson Rookie Auto Superfractor /10

2007 SP Authentic Adrian Peterson Rookie Auto Patch

2006 – Reggie Bush

I joined the football hobby around 2004, after years of collecting baseball. I really didnt get my feet wet until 2006 when the hype around Bush, Young and Leinart took the hobby by storm. The scary thing is, 2006 has since become a relative wasteland, as very few of the big name offensive rookies ever lived up to the hype. Despite a disappointing career, his 2006 cards maintain value just for the expectations behind that fabled season.

2006 Contenders Reggie Bush Auto Ticket RC

2006 Exquisite Reggie Bush Auto Rookie Patch /99

2005 – Cadillac Williams

You would expect that Aaron Rodgers would be an easy shoo in for the most interesting rookie of 2005, but he didnt play for two years sitting behind Brett Favre. Before the Rodgers we know and love came to be, Cadillac was the big name, putting up over 1000 yards in his rookie year. 2005 is still a tough class to support without Rodgers being the main guy, especially when Alex Smith really didnt pan out the way everyone thought.

2005 Topps Finest Cadillac Williams Auto RC

2005 Contenders Cadillac Williams Auto Rookie Ticket

2004 – Ben Roethlisberger

Like Flacco, Big Ben came from a school that isnt known for football. In his rookie year, he put up numbers that many of today’s rookies would kill to have, and the hobby responded in kind. Considering that Rivers and Manning were also in this class, 2004 might end up being one of the better modern hobby rookie classes.

2004 SP Authentic Ben Roethlisberger Rookie Auto Patch

2004 Bowman Chrome Ben Roethlisberger Auto RC

I think we are in for another interesting year this year with Winston and Mariota, but im still curious to see how the back end of the class performs. Although most of the time its about the QBs now, there are some names on this list that show its not always about them.

Panini Immaculate – An Exquisite Example of High End?

When Exquisite was first released in 2003-2004 for Basketball, it was the dawn of a new era in the hobby. Many would argue that the creation of the first Super High End product spelled the end of sustainability for both shops and the industry, but I see it as the reason people like me still are a part of the hobby. Topps Five Star has always been one of my favorite products, and like Immaculate, it is built on the foundation constructed by Exquisite's domination in the hobby.

Here are some of the cards in which Immaculate is copied from:

2007 Exquisite Marshawn Lynch Rookie Patch Auto

2008 Exquisite Kevin Durant Noble Nameplates Auto Patch

2009 Exquisite Kevin Love Limited Logos Auto Jumbo Patch

2009 Exquisite Matthew Stafford / Mark Sanchez Dual NFL Logo Auto 1/1

2009 Exquisite Harvin / Crabtree / Nicks / Thomas Quad Logo Auto 1/1

Today, Panini previewed another batch of their Exquisite based product in 2014 Immaculate football, a sister product to the previous releases in Basketball and Baseball. I have seen a lot of comments on twitter praising Panini’s design team for the look of the set, but also criticism for its striking resemblance to Exquisite’s previous releases. Its hard to deny that when you can see the resemblance so easily.

That being said, Exquisite produced some of the best looking sets in the history of this era of cards, and the value of those cards remains relatively untouched, even after years of unlicensed releases. Patterning a product after this formula is NOT a bad idea at all, even though it might be questionable in the "taking credit" department.

I love the way the set looks, something I mentioned a few times when it was released in Basketball in 2013 and 2014. The swooping lines and high end gold presentation makes a mark, and really pops in a lot of different ways. Using acetate as a vehicle also looks really cool in a lot of the patch autographs, which are structured almost exactly like Exquisite’s cards of the past, down to the shape of the swatch.

The design of the relic cards for each of the Immaculate releases remain a completely WEAK point for Panini in almost every way, especially when you see how terrible the design is for the oversized jumbo patch. For whatever reason, Panini seems to think its better to build a card that is more about swatch size than actual look, something which I cannot stand. Even worse, when this same approach was used for one of your most inferior brands, not a good idea to bring it to a set like this.

The worst of the relic cards are easily the horrendous hat patch cards, which feature a stupid looking goofy ass picture, and a relic from a hat that the rookies wore for a few seconds at the photo shoot. Its a lame idea, and an even worse execution. I continue to be baffled with Panini's ungodly obsession with posed pictures on trading cards.

On the other hand, the autograph cards look so good, that it almost doesnt matter how bad the relics are designed. The Immaculate Moments and the Champions autos are going to be very popular cards, as are the jumbo patch autographs, which look exactly like the ever-popular limited logo cards from Exquisite.

This is going to be a barn burner folks, and I cannot wait to see what’s in store.