What will a Topps buyout by Upper Deck mean?

[mikesilvia]

Unless you've lived under a rock, you know that Upper Deck has made an offer to buy the Topps company. This offer came a few weeks after The Tornante Company LLC and Madison Dearborn Partners, led by former Disney CEO Michael Eisner, made an offer the buy Topps. On 2 July, Topps management made an announcement that they will hold a special stockholder meeting to decide this issue and the deal will be either accepted or declined.

What will this sale of Topps to Upper Deck mean for the sports card industry and why did Upper Deck wait so long to make an offer to buy Topps?

Personally, I can't help but feel this buyout will hurt the sports card market as it takes out one of two of Upper Deck's only real competitors; the other being Playoff/Donruss.

With this buyout Upper Deck will now be a monopoly in the sports card industry. Topps and Upper Deck already owned the sports card industry as the major sports associations and player associations restricted licenses. With this buyout the #1 card maker will be buying the #2 in an already thin and shrinking field. Playoff/Donruss offers great products, but in no way can compete with a combined Topps/Upper Deck.

I am not an industry insider, but I do know that monopolies are bad for consumers. When there is an absence of competition, innovation is usually the first thing to suffer and is usually replaced with higher prices and poorer products. If there is no one putting competitive pressure on a company, that company usually relaxes and loses its competitive edge.

Upper Deck was a true innovator when they first entered the card market in 1988. Topps owned the market and had little competition. Upper Deck was hungry and brought autographed and game used cards to the market. In 1990, Upper Deck changed the sports card industry by introducing randomly inserted autographed cards into their baseball product (their only licenced product at the time). In that same year, Upper Deck was licensed to product NHL, NBA and NFL cards sending shock waves throughout the industry and becoming Topps first real competitor in years. Less than 20 years later, Upper Deck is likely to buy Topps.

Why did Upper Deck wait so long? Simple! Upper Deck saw Michael Eisner as a threat and decided to buy Topps before it could be bought up and reorganized into a company that could take on Upper Deck.

The main problem I have always had with Upper Deck is their business practices and forgetting their roots. They were allowed to enter the sports card industry with licences to produce MLB, NHL, NFL and NBA cards within 2 years of opening their doors. Without those licenses they wouldn't have lasted long. In recent years, I can't help but feel that Upper Deck and Topps influenced In the Game losing their license with the NHL Player's Association to produce NHL hockey cards and in the same year influencing Donruss's loss of their Major League Baseball license to produce baseball cards.

Can we expect more of the same after Upper Deck purchases Topps? I think so.

Consolidation is good when one company buys another to add a needed technology or to enter a new market. The purchase of Topps will fill no holes and add little technology to Upper Deck. This purchase is Upper Deck's way of completely owning the sports card market and removing the chance for Topps to become a true competitor with new management. Hopefully, either Topps rejects this offer and a new buyer steps in or the government sees this and under an anti-trust law stops this.

[doniceage]

Nice read Mike. I would sure love to know more about this situation especially the Hockey and how the NHLPA and the NHL decided to go with only one card company. Of course I am sure there is different information out there.

I think one way to stop this is a Parent Company can only produce so many products (2 per sport or whatever). As the way it stand if they buy Fleer, Topps, Parkhurst, etc. they can add 2 or whatever products for each brand purchased). Of course I mean look at how many products UD puts out for hockey (20 or so). Not even sure but it probably more than that which used to be done by Donruss, Fleer, Parkhurst, Topps, In The Game, Pro Set, etc.

DON

[randallcards]

Nice Read, a Great Break from the Regular "Bush Praise" you always post:thumb:

[amSportsTalk.com]

Nice Read, a Great Break from the Regular "Bush Praise" you always post:thumb:

Well Randall when he is right he is right, The Bush praise is always warranted unlike the belief that he is the bad guy by so many Americans. I won`t get into it as so many don`t understand the good he has done and the protection we have had since 911.

Now OT, this does look like a real bad idea for the hobby as a whole , I don`t think it can and or will be a good idea to let one company take over so much of one business sector. May Mcwilliams realize that the competition is good for him and when you take on so much you lose site of what matters and in this case it`s the fan. You disappoint them and they can turn fast, you let others fail (like if topps was to stay on their own) they will come running to open arms.

May this outcome help us not hurt us.