It used to be a hobby practiced by young boys and a fewcollectors, but the trading and collecting of sports cards is now bigbusiness. So much so that in March Sotheby's sold a rare HonusWagner 1910 baseball card to Los Angeles Kings' player Wayne Gretzkyand owner Bruce McNall for $451,000. The sports cards business isnow being followed by adults who can see all the way to the bottomline. Inside Business' Keith R. Yocum recently talked to RonaldMorrow, card industry analyst with Smith Barney, Harris Upham & Co.in New York.Q. Is there any logical reason why sports trading cards have explodedin value in recent years, or is it just another example ofprofit-motive speculators driving a business?A. There is some logic to it. You had a huge bulge in thedemographic of the card buyer, the baby boomers who bought all thesethings. As they're entering their prime earning years there'snostalgia, and plus some fancy prices are being offered for sportsmemorabilia in general. . . . {the sports card business} has beenbuilding for awhile. Since 1980 there are more companiesmanufacturing cards . . . The demand has been twofold from kids andcollectors.Q. How large is the business?A. Total sales of sports cards, excluding hockey cards, frommanufacturers last year -- this is not retail sales -- was $625million, that's up from $407 million dollars the previous year . . .I don't know the value of the resale market, but Topps will tell youthe whole thing is a billion-dollar business . . . Topps' 1990pretax margin was in the 25 percent range. Compared to tobaccocompanies, that's not so hot, but compared to an auto company, that'spretty good.
Q. Has the business slowed during the current economic slump?A. Recently the demand for cards at the retail level has slowed . . .Nevertheless, this year the industry will be up 5 to 10 percent . . .This is a renewable collectible. Each manufacturer is merchandisingtheir {card} year in different ways to keep up interest. Fleer had ayellow-bordered card . . . Topps had interspersed old valuable cardswith their 1991 merchandise.Q. With so much money to be made by speculators, have there beenabuses?A. I don't think manufacturers abuse the system. No. When Bushbecame president Topps printed a special card showing Bush in hisYale baseball uniform. There were only supposed to be a few of them.But a few of the cards came out in wax packs. Was that abuse? No .. . From a manufacturer's point of view, they only make money on thenumber of cards they sell.Q. Is there still a place for children in sports cards?A. I think the majority of this business is a child-like love ofsports collecting . . . The periphery of it is the business ofcollecting.