Tuff Stuff exclusive interview with Upper Decks Richard McWilliam

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 first of a three-part 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 kicks off the series with Panini CEO Mark Warsop and Topps VP Warren Friss to follow in the next two issues. We hope you enjoy the series and please go to our Forum page at www.tuffstuff.com to post any questions or comments you might have.

– Scott Fragale


Tuff Stuff: If someone is just getting initiated to the hobby and asks you why they should spend their collecting dollars with Upper Deck vs. their other choices out there, how would you respond? 

Richard McWilliam:
“It’s difficult to give a short answer to this question. There are dozens of reasons why to buy Upper Deck vs. our competition, but it probably comes down to one very important difference: Upper Deck is the brand that stands for, and delivers, the most premium cards available on the market.  It always has, and it always will.” 

TS: Talk about the numerous changes that the hobby has seen in the last two decades. What are some of the best and worst changes from your perspective during that time frame? 
RM: “Yes, we know the industry has changed a lot in the last two decades. In some ways, though, it’s still very much the same. People love to open packs, they love the excitement of discovering the cards inside and they love to share their great finds with other collectors. The same is true whether it’s a 50-year old, die-hard collector or an eight-year-old opening a pack for the very first time. That’s something that hasn’t changed much over the last 20 years. Come to think of it, it hasn’t changed much over the last 50 years. 
“The best: challenging the status quo back in the late 1980’s to revolutionize this business, and then watching it grow well beyond anyone’s expectations; continuing to innovate and push the limits on how we define a trading card; the explosion of interest among kids in trading card games; and the recent emergence of the “super collector.
“The worst: losing so many hobby shops; losing a lot of collectors; trying to keep up with the growing demands for more and more product content … and at the same time trying to keep up with the growing demands of our business partners.” 

TS: With Upper Deck celebrating its first 20 years this year, what do you feel the company’s best contributions to the hobby were?
RM: “There have been so many great contributions, from building a far superior trading card, to the first release of a true “premium” product, to the launch of the Yu-Gi-OH! brand and, of course, our long-term relationships with the greatest athletes in the world like, Michael Jordan, Tiger Woods, Wayne Gretzky and LeBron James. While they may not have been the most successful initiatives from a financial perspective, I’m also extremely proud of some of the cutting-edge innovations we’ve brought to market. Remember, nearly a decade before anyone else was releasing digital cards or 3-D cards, Upper Deck released PowerDeck, WebPass, EVolve cards and the list goes on.” 

TS: With the hobby surviving but not flourishing like it did back in the 1990s and the economic downturn making it especially difficult to survive not to mention thrive, it would be easy to make a career change and take your career in a whole new direction. What keeps you from doing that and how long do you intend to continue in your role with Upper Deck?
RM: “Sometimes I ask myself those very same questions. The bottom line is that I love this company and it’s not something I will walk away from for a very long time. What keeps me coming back? The dedication of our employees, the passion of collectors – sometimes positive, sometimes not – watching the joy on a kid’s face when he gets a pack of cards, and the desire to revolutionize the category all over again.”

TS: If you had the power to change any one area of the industry but could only change one aspect, what would it be?
RM: “Probably the misconception that surrounds the pack-opening experience. And by that, I mean that things are much different today than they were when Upper Deck first entered this industry 20 years ago. People still think that they might have to wait 30 years or more for their cards to be valuable, but the truth is they can get a card worth hundreds of dollars – maybe even thousands – right out of a new pack of cards. Despite considerable marketing and PR efforts, many people still possess that old mentality.”
MLB Exclusive & Future Plans

TS: Some people are now concerned that with the new exclusive deals in place, that those holding the exclusives have a type of monopoly on the category which will ultimately lead to less-creative design, less value and other negative aspects that a lack of competition can sometimes provide. What are your thoughts about exclusive rights given to one company and its effects on the hobby as a whole?
RM: “Depending on the business issues affecting a particular segment of the category, exclusivity, if managed well, can be productive and lead to category growth. Since Upper Deck was granted exclusive rights in hockey, sales have increased dramatically and we’ve invested millions and millions of dollars in marketing programs to drive more new users into the hobby. Our hockey products have been some of the most creative and innovative in the hobby, and they’ve held their value far better than most other sports. Working closely with the NHL and NHLPA, Upper Deck has a solid track record of making an exclusive work.
“Basketball is a different business with very, very different issues to address. As for baseball, we don’t consider that a sport affected by exclusivity. Upper Deck has a license to produce cards of Major League Baseball Players and we intend to do just that.” 

TS: For the collectors and dealers and general Upper Deck fans out there that think the new exclusive license Topps has with MLB (and Panini’s exclusive with the NBA and the loss of Yu-Gi-Oh!) signifies the beginning of the end for Upper Deck, how would you put those fears to rest and how can Upper Deck survive in this tough market?
RM: “This is the misconception that infuriates me and everyone else at Upper Deck. We are obviously not a two-sport company. Upper Deck will continue to make baseball cards in 2010 and beyond. In fact, I think 2010 will offer collectors and fans one of the best portfolios of Upper Deck products we’ve ever produced. We recently signed an exclusive license with the CLC (Collegiate Licensing Company) and with spokesmen like Michael Jordan and LeBron James we will continue to make basketball cards. On top of baseball, basketball, football, hockey and MLS, Upper Deck will make a full lineup of new Marvel products, the World of Warcraft trading card and miniatures game and more.”

Other Categories
TS: What do you believe is UD’s biggest asset right now?
RM: Our employees: their creativity, passion and dedication. 

TS: Considering that UD and UDA still have LeBron James, Kobe Bryant and Michael Jordan under exclusive contracts, it seems that if the NBA was looking for an exclusive provider it would’ve turned to Upper Deck. Can you explain how it didn’t unfold that way and what efforts were made by UD before the decision to go exclusively with Panini was made?
RM: “Of course Upper Deck made efforts to pursue the NBA license. Upper Deck is and has been the dominant NBA market leader for 15-plus years. I’m certain collectors and shop owners would agree. I can’t speak as to why the NBA did what they did. I can only say that the financial aspect of the NBA package, based on the size of that market, would have been grossly irresponsible for Upper Deck to commit to.” 

TS: UD has announced it will still have a major role in the basketball card category by using college uniforms and your stable of signers (MJ, LeBron and Kobe, etc). What are the plans for this category moving forward and how many products are planned for next year?
RM: “We will remain a dominant force in the basketball market. We are currently in the process of fine-tuning what kinds of products collectors and dealers want most and we’ll work to meet and exceed those expectations in 2010.”

TS: When is Upper Deck’s exclusive deal with the NHL due to expire and are you confident you will be keeping exclusive rights and get it renewed?
RM: “Upper Deck has a very solid track record in the hockey market. We’ve worked hard with both the NHL and NHLPA to manage and grow the business, and we’ve been extremely successful.  Based on our record and our team’s dedication to this business, we’re very confident that Upper Deck is the right partner to exclusively manage the hockey trading card business.” 

TS: Will UD be making any more golf cards in the future?
RM: “With a long-term relationship with Tiger Woods and growing demand for new golf product, yes, we will be making golf cards.”

TS: UD has made a major push to get children involved in the hobby. Can you talk about the challenge that it entails and what are some of the company’s plans moving forward in that area?
RM: “In the last five years, Upper Deck has invested more than any other company in kid-focused marketing efforts.  We’ve run more than 10 different TV commercials with nearly 12 months worth of total air time, we’ve sampled cards to millions of kids and we’ve invested in new online programs and even launched a new sports-themed virtual world. With all of those investments, we have seen growth in the kids segment of the market. We know more kids are buying cards today (compared to 2000-2005). But there are still a lot of other product categories competing for a kid’s attention. Capturing the kids market is a tough challenge, but we’re still very committed to growing this segment of the market.” 

TS: One of the biggest complaints we hear is regarding redemption cards and the length of time in getting them fulfilled. What are some of the things that UD has done to alleviate those concerns/complaints?
RM: “I always have and I always will hate redemption cards. I had hoped by this time that we’d be able to eliminate redemption cards from the industry landscape, but the truth is, it’s a very complicated issue. There are a lot of variables that we simply have little control over – like getting the autographed cards back in a timely fashion from the athletes – but despite the difficulties, we remain committed to solving this problem. I’m personally involved in trying to eliminate redemption cards, but time isn’t always on our side.
“I’ll be the first to apologize for any delays associated with a card that we’re trying to get signed by four superstar athletes. But I won’t apologize for trying to deliver something that’s unique to a collector who’s earned it by cracking packs.”

TS: In your estimation, what are collectors in today’s market looking for? What’s the next big thing in your estimation?
RM: “The easy answer is that collectors are looking for “value,” but I think it’s more basic than that. I think collectors want to have fun when they open a pack of cards.
“As for the next big thing, well, that’s a harder formula to crack, although we’re all very hard at work on its discovery.” 

TS: What kind of shape do you think the industry will be in 20 years from now and what are the most important issues facing the hobby as we move into the next decade?
RM: “I think about it often and it always gets me excited. Certainly there will be a push for more online programs and initiatives. And I’m hopeful that hobby shops will still be very much involved to serve as the hub of this activity. Both manufacturers and stores will need to look at more ways to embrace technology in order to reach new customers. If we’re able to do that, the future looks bright.” SCM

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