With the hobby landscape changing rapidly before our eyes in recent months, many questions have arisen. How will the new exclusive licensing agreements affect collectors? What card companies will be producing what next year? What does the future hold for each company? These are just a small sample of the questions we hear everyday so Tuff Stuff went straight to the top to provide our readers with some answers.
The following is the third installment of our Ask the Execs series with the top executives of the three largest card manufacturers in the industry, with the sole purpose being to provide our readers (and collectors in general) with the answers they need to stay on top of the hobby.
Upper Deck CEO Richard McWilliam kicked off the series with Part I of our interview with Topps Vice President Warren Friss featured in last month’s issue. This month will feature Part II of the Friss interview and our exclusive interview with new Panini America President Mark Warsop.
Tuff Stuff: What are some of the new ideas Topps has planned for 2010?
Warren Friss: In baseball for instance, we’re launching what we’re calling the “Million Card Giveaway.” It’s going to be a huge promotion in Topps Baseball this year, Series I, Series II.
You know everybody tells you they had these great cards that their mother threw out, I wish I had my cards, I put them in my bicycle spokes and I don’t know where they are now. Well, Topps is going to be giving back all the cards your mother threw out. So, we’re going to be giving away a million cards this year. Vintage cards. Actually vintage cards. And they’ll be at least one of every Topps base card available. So we’ll have every card from 1952, 1953, 1954, every year of Topps base brand. We’ll have additional autograph cards, relics some of the great cards that we’ve done the last few years that are very valuable. And the way you’ll get those cards is one in every six Topps base brands will have a code and you’ll go online, it will unlock and show you which card you’ve just won. It’s a real, actual vintage card, not a digital card. You’ve actually won the card, you’ll get the card delivered to you. But you’ll also be able to trade the card to somebody else if you didn’t get a valuable card or you didn’t get the card you wanted or if there is a favorite card that you remember and you want to get. For me, it’s a 1971 Tom Seaver. That card may not be very valuable but it’s valuable to me because it means something from my childhood. So if I get a Johnny Bench card and somebody in Cincinnati has my Tom Seaver card I’ll be able to actually trade with that person and the card will then go into my account.
There will also be an opportunity that for every code you enter online, you are entered into a sweepstakes and the winner will get a complete 1952 Topps set. So if you don’t get the card you love and you can’t trade for it and even if you can, there will also be an opportunity to get a 1952 complete set. This is going to be a huge promotion for us and there will be a lot of PR around it and those are the type of things that we’re doing to make sure we suceed this year and going forward, and it certainly won’t be business as usual.
Tuff Stuff: When looking at the overall sceme of the different card categories, how much of a priortity was it for you guys to make the push to get exclusive rights in baseball and what are some of the other initiatives you have planned for the next year and beyond?
Friss: It was definitely a top priority. Again, when you look at the buisness, we feel cleaning up the retail enviornment is critical to turning things around and bringing back kids and casual collectors. So that was really Step 1 in our plan to put ourself in a position to clean up the enviornment and if there are two companies making cards it’s difficult to do that. The next step was to make some new and creative concepts and the third step is to market them and let people know about them.
Those things include Topps Town, which has been out for a couple years but we’re constantly improving it. As you know, all the Topps base cards have a code that unlocks a digital pack on Topps Town and it’s been very successful in bringing kids to the Topps brand. So that’s something we’re going to be continuing to focus on. We’ve already had almost a million codes that have been entered. We have it in baseball, football and basketball and we’re launching Topps Town for WWE in the next few months, so that’s a critcal initiative for us.
And the other thing is Topps Attax, which I already talked about. The card product for kids has been a great success in Europe and saw some great success in certain regions here and we’re going to be investing heavily and focused heavily on making Topps Attax a major success, so that’s another area of major emphasis for us.
Tuff Stuff: How does the exclusive deal that Panini signed with the NBA affect Topps’ future in the category and what can collectors expect from Topps during the length of their deal with the NBA?
Friss: Unfortunately, I really can’t discuss what they can look for us to do; we’re still working through that. No real timetable for that at this point. Basketball is a tough business over the last number of years. Even when there was a number of good rookies like Durant and then Oden didn’t pan out, the business really, really struggled. We had an opportunity to get an exclusive in basketball but when we looked at the economics of it, it just didn’t make sense from a financial perspective to do what we would’ve needed to do in basketball. I think going exclusive was probably the right thing to do in basketball because of the size of the market. But again, when we looked at the economics of what we would’ve had to do to get the exclusive, it just didn’t make sense for us. Now, hopefully Panini can make it work for them and we’ll certainly see what happens and I wish them the best, but from a financial persepctive it just didn’t make sense.
Tuff Stuff: Was this kind of one of those deals where two years or so back did you guys start looking into reduction and there was likely going to be exclusive deals being done, do you have to look into the categories and prioritize and go full speed ahead in and bite the bullet in others?
Friss: We certainly have the financial ability to stay in all of the sports and we certainly could have. It wasn’t really a matter of prioritizing. If we thought it could’ve been a profitible business for us we would’ve stayed in it. So it really wasn’t an issue or focus at all.
Tuff Stuff: What do you feel is Topps’ biggest asset right now?
Friss: I think in an industry where heritage is important, our heritage is a great asset to us. The fact that people have such a great feeling about the Topps’ products from their youth and what they remember about Topps. There are very few brands in the world that elicit the feelings that Topps brings to people. That’s a great, great strength of ours and something that we’ve continued to develop and something that hasn’t gone away. I think our product development teams have come up with and will continue to come up with great products like Triple Threads or Allen & Ginter or programs like Topps Town or Topps Attax and those are great assets of ours.
Another great asset is our ownership. As you know, Michael Eisner’s company and Madison Deerborn purchased us almost exactly two years ago and they’ve been extremely helpful. Michael and Madison Deerbourn are very passionate about the business. You know, Michael loves cards like you and I love cards. He loves the hobby, he doesn’t want to change what we do with collectors and he thinks that’s very critical for us, but he’s been a great driver of creativity and he’s very passionate about growing the business and bringing back the kids and his energy and connections, passion and drive have really been a positive force for us over the last couple of years.
Tuff Stuff: There are a lot of different areas that kids can go to get their excitement these days with video games, Internet, etc… Does Topps try to get feedback from children when trying to launch a new product?
Friss: We do a lot of research with kids. Even as far as what the design of the Topps brand should look like. We make sure it’s right for collectors but we also make sure it’s right for kids and the only way to do that is by talking to kids. Things like Topps Town, a lot of research and a lot of working with kids and showing them things and getting their feedback went into that and making changes went into that and certainly with Topps Attax as well. We didn’t just say, “Hey, we think we should make Topps Attax.” It’s based upon kids loving it in Europe and testing that we did here in the U.S. and we did do some changing to the game play as it went on and did more testing. You kind of get a sense to kids, what doesn’t work, what they don’t understand. And then you get to a point where you’re comfortable launching a product when you get that positive feedback from the kids. You definitely need the feedback from kids and what they think about your ideas and you need to hear what’s going on with them and what they think about baseball, football and what they think about the athletes and all of that goes into making our products.
Tuff Stuff: What are some of the things that Topps has done and will do regarding the complaints we all hear about redemption cards?
Friss: I’m not going to say it’s not a problem, but if there were an easy solution we all would’ve found it. We solicit our products, we take orders and through that whole process we try and get them to do their signatures. You can’t always get them to sign when you want them to sign. We’re dealing with a lot of people, a lot of personalities and guys that are very busy. The NFL only allows guys to sign on certain days during the season and understandably. Their main job is to focus on playing football and a baseball player is getting paid a lot of money by their teams and their livelihood is based on their performance and they need to focus on what they do on the field, so it’s tough to get them to focus on signing 1,000 autographs.
Tuff Stuff: In your opinion, is that something that has gotten more and more difficult as players make more money and don’t need the side ventures to make extra money?
Friss: That’s a part of it, but I think the bigger problem is the volume of autographs that we need. Eight years ago, I don’t know what the number is, but we probably needed 1/20 of the number of autographs we needed last year. Based upon sales volumes and based upon the fact that every product has autographs in it and there lots of products that have guaranteed autographs per box, so the volume of the autographs needed has increased dramatically. I think there are some of the financial issues as well, but it’s more the volume than anything else.
Some of the things we are doing is the online system where you can find out what’s going on online now and you don’t have to send in your redemption card and I think we’re doing a better job of communicating with people and using the online world. I think our redemption rate, the rate at which we have to provide redemption cards, is declining. And just so people know also, sometimes we’re in position where a product is ready to go and we have to make a decision. You know, let’s say right now it’s five percent redemption, we have to make a decision if we want to wait and get more signatures or delay the product. The right answer is to get the product out with all the autographs but sometimes you just can’t do that but it’s not because we’re sleeping. I think we have done a good job of reducing the redemption rates and another thing I think we have to focus on is, frankly, not going after players that we have a difficult time getting to sign. SCM