A Fan Speaks Out

April 15, 2007

Don’t Throw Those Old Cards Away…

If riding your bike with the baseball cards stuck in the spokes evokes memories in you, times certainly have changed. Sports memorabilia is big business these days generating more than two and a half billion dollars a year in revenue.

A big part of the market is adults trying to relive their childhood, according to Alan Rosen, known as “Mr. Mint” and the largest buyer of vintage baseball cards and memorabilia. “The collector recaptures a piece of his youth in this business,” he said.

An excellent example of that is Michael Gidwitz, who began collecting cards when he was eight and now owns a business on South LaSalle St. called Precious Paper that features parts of the collection he has amassed over a lifetime of collecting. Gidwitz is known for having once owned the famous Honus Wagner tobacco card from 1910 that he sold for a record $1.265 million dollars; a nice profit considering he originally purchased the card at an auction for $640,500. (The card recently sold for $2.35 million.)

His collection includes hundreds of uncut card sheets starting with the first true series of baseball cards ever printed, the Old Judge set by Goodwin and Co. back in 1887. Probably the prize of his collection now is the 1933 Goudey set that features ten sheets with twenty-four cards to a sheet that includes Babe Ruth and Lou Gehrig and is estimated to be worth in the range of a million dollars.

Walking through his condo and an adjacent apartment he keeps just to store his collection is like walking through a museum. As for the value of his collection, while he couldn’t put a number on it, he said, “They’re only worth what someone wants to pay you for them.”

Sports collectible and autograph shows are a great place to find those cards missing from your collection, as well as autographs from your favorite players.

The Sun-Times shows at the Donald E. Stephens Convention Center in Rosemont put on by Sportsnews Production Inc. and Mounted Memories, and the Chicago Cubs Convention at the Hilton Hotel on Michigan Ave. are among the best places to collect autographs and memorabilia.

You can find bats, balls, cards, jerseys, and even Wrigley Field seatbacks autographed by members of the ’69 Cubs. Fred Sherry of FAS Collectables in Palos Hills had a framed seatback with Ron Santo, Billy Williams, and Ernie Banks going for $400.  Though the 1969 Cubs failed to win, they are still beloved in the hearts of fans. “You can’t lose with Santo, Banks, and Williams,” he said. “Their stuff always sells.” That sentiment was echoed by several of the people I talked to including Bob Cissell, the manager of the Field of Dreams store in the Woodfield Mall in Schaumburg. “We had huge sales for the vintage guys during the holidays.”

Field of Dreams is one of seven divisions of a company called Dreams Inc. that has been in business for fourteen years. They generated over fourteen million dollars last year while the parent company generates fifty to sixty million a year in revenue. Mounted Memories is the wholesale part of the company that handles the autographs and memorabilia and is considered one of the big four in the industry along with Upper Deck, Tri-Star and Steiner Sports.

Brian Schwartz, President of Schwartz Sports in Northbrook, has been in business since 2000 and currently brings in around four million dollars a year in revenue. He spoke of a successful reunion signing he put together with the ’69 Cubs in 2003. They gathered eighteen to nineteen of the players from that team for the signing that included photos, bats, and balls. In philosophizing about the love for the team, he said, “Those are the guys that fans remember growing up.” “Ernie Banks and Ron Santo are probably the two most beloved Cubs of all time.”

Players of more recent vintage that are still fan favorites include Ryne Sandberg, Mark Grace, and Greg Maddux. But former icon Sammy Sosa isn’t even so-so when it comes to his items for sale. Keith Schuth of C.A.A. sports marketing in Westmont said, “You can’t give his stuff away now.”

Current players of the team that are hot sellers include Carlos Zambrano, Michael Barrett, and Derrek Lee. There have also been requests for new Cub Alfonso Soriano.

Injuries can play a part in demand for a player. “2003 was absolutely crazy and that was a big boost to our business,” said Schwartz. “Kerry Wood and Mark Prior were the hottest things in the world. The last two years, Wood and Prior have not sold very well.”

Surprisingly, or maybe not so surprisingly, autograph prices for current players are often higher than vintage players and former Hall of Famer’s. “People ask why the current guy is priced higher than a Hall of Famer, and part of the reason for that is that the guy who played in the sixties probably made less in his entire career than a guy who’s playing now makes in one year,” said Schwartz. “That in turn makes the current guy charge more for his time because they’re already wealthy and have less free time. So theoretically, their time is worth more while some of the guys in the sixties, because their time is less expensive, it makes their autograph less expensive.”

Joe Orlando, President of PSA/DNA, the largest third-party authenticator of sports memorabilia and autographs concurred saying, “I think there is going to come a time where modern stars are actually going to become a lot more scarce and valuable than some retired Hall of Famer because of the compensation issue.”

With the price of memorabilia and autographs steadily increasing, it puts an increased importance on making sure the items you’re buying are real. PSA has been in business since 1991 and certify over 100,000 items per month which includes sports cards and autographs.

E-Bay and the internet have greatly expanded the sports memorabilia market, and while there are many legitimate people out there, there are also plenty of predators looking to take advantage of the uninformed. According to statistics the FBI has put out in the past, up to ninety percent of the autographs in the industry are forged. Orlando doesn’t necessarily agree with those numbers but he said, “I’m not quite sure it’s that high, but it’s certainly very high.”

“We keep a detailed record of our submissions and how many pass and it would not be uncommon for a Mickey Mantle, Ted Williams, or Babe Ruth to fail more than fifty percent of the time. The importance of that number is that the dealers, auction houses, and collectors know not to send us blatant forgeries and still over fifty percent of those autographs fail.”

There are specific characteristics the experts look for when authenticating an autograph. “We look for spontaneity, flow, letter sizing, and spacing between the letters,” said Orlando.

They have approximately 75,000 exemplars, which is an example on record of a players autograph in their data base. The exemplars help to show how a players’ autograph has evolved over the years because they do change over time.

PSA uses a ten point system in grading cards with ten being the best. In rating cards, the experts look at the strength of the corners, the print quality, centering, and eye appeal. “A ten is basically a nine with exceptional eye appeal,” said Orlando.

The difference in grades can also mean a vast difference in value. Using a Hank Aaron rookie card as an example, an eight would sell for between $3500 and $4000, a nine would go between $17,000 and $22,000, while a ten would be worth in the neighborhood of $100,000.

Baseball and sport cards are a huge business with Topps and Upper Deck being the major players in the industry. Topps garnered $293.8 million in total revenue and $101.6 million gross profit in the fiscal year that ended in February 2006. (Numbers are not yet available for February 2007.)

Upper Deck is not a publicly traded company and doesn’t release profit figures, but are known in the industry as being pioneers in the authentication process. They have some of the biggest names in the business under exclusive contracts including Michael Jordan, Tiger Woods, LeBron James, and Wayne Gretzky. According to Donald Williams, a public relations rep for Upper Deck, they have a saying, “If you didn’t buy it from Upper Deck, you better make sure you saw the athlete sign it.”

Pricing on autographs and memorabilia is determined by the market and is closely monitored. Steve Dall, President of the corporately owned Field of Dreams stores said, “We shop our competition pretty actively and try to stay competitive.”

Markup in the memorabilia industry also varies. Brian Schwartz mentioned that often times its double what the company paid. Bob Cissell said, “It’s authenticity that we’re branding, so we have to make a healthy margin on it.”

Baseballs appear to be the number one seller for most of the big companies. Brian Schwartz said, “If you think back to the older days before memorabilia was this big industry, people would go to the ballpark to get a baseball signed.” “That was the original sports collectable.”

Bob Cissell mentioned another reason saying, “A baseball is not connected to a team.” “A baseball is the signature and you pay for the autograph. Where a Greg Maddux photo in a Cubs uniform is still connected to the Cubs, on a baseball, it doesn’t matter if he’s with another team.”

Whether you’re collecting as a hobby or for investment purposes, it’s good to remember what Michael Gidwitz had to say... “I only buy stuff if I like it.” “It’s about the fun. We’re all big kids inside.”

If you do it for that reason, there’s no way you can go wrong.