The End Of Topps (Not-So-Slight Return)

Well, the inevitable happened the other day as Michael Eisner's Tornante Company and his partners, Madison Dearborn, sold off the last remaining bit of Topps Chewing Gum, or more properly these days, The Topps Company. It wasn't really the end of the company founded as a partnership by the Shorin Family in 1938, which to my mind occurred when Eisner's group and Madison Dearborn bought out, quite acrimoniously it seems, the remaining Shorin's (and a host of other stockholders) for $385.4 Million on March 6, 2007, bit it certainly put a final cap on the era of the founders.

That 2007 deal was nudged by an activist investor group called Pembridge Capital, which held seats on the Topps board. Despite some drama that included arch rival Upper Deck making a game attempt to swoop in, the original deal went through, ex-CEO Arthur Shorin sold his 2.7 Million shares at $9.75 a pop (for a pretty tasty haul of $22.425 Million), and Michael Eisner took over at Topps. Nice work if you can get it!

So today I thought I'd take a look at some key Topps business activity today both before and after things got Mickey-Moused.

Founded as a partnership between the four Shorin brothers (and probably their silent-partner father Morris), Topps began doing business in December of 1938 with a sole product called Topps Gum, which sold for a penny. They endured the shortages and privations of World War 2 by selling this one product and some ration and shortage induced low-sugar candy bars, then came up with all-time winner Bazooka bubble gum in the late summer of 1947, a vital catalyst for their growth. 

Introducing baseball cards of a sort in 1951 in the bizarre set dubbed Baseball Candy, which despite getting Topps royally sued and cease-and-desisted, led them to double down and come out with the now classic 1952 Baseball set, which helped build their profits and signaled the start of an as-yet uninterrupted-run of annual issues covering the game of sphere and ash. This led to a very litigious four-year period before Topps ended up purchasing their biggest rival, Bowman, in February 1956 when the parent company of that venerable Philadelphia firm (Connelly Containers) elected to pursue other, and quite lucrative, business opportunities.

Topps weathered challenges thereafter from Fleer, the Federal Trade Commission, the Major League Baseball Players Association and other, smaller antagonists before floating an IPO of 435,000 shares of common stock in March of 1972, which saw the company listed on the American Stock Exchange, initially valued at $17.50 per share, or $7,612,500. There were also apparently a gaggle of preferred voting shares that I'm still trying, somewhat listlessly, to untangle that allowed the Shorin's and their various in-laws and allies to essentially retain full control of the company. (UPDATE 4/12/24: I just found an article indicating only 25% of the company was being listed, so the valuation was $30,450,000).

I think this specimen shows how the issued stock certificates looked in 1972 as dot-matrix computer printing and boxed CUSIP numbers were in use by then but this version is from 1978 so I can't be sure:

The AMEX ticker symbol was TOPPSG. 

In 1975 Fleer sued them in an action that led to the 1981 expansion of the baseball card market and ultimately rocket-fueled the growth of of the hobby. In 1983 the Topps board agreed to a leveraged buyout by an investor group headed by Forstmann Little. This deal closed in early 1984 and 3.6 Million shares of Topps common stock were gobbled up at $26.25 per share, valuing the now-private company at roughly $94.5 Million.

In May 1987 a NASDAQ IPO saw Topps issue 1.7 Million shares (described as 31% of "itself" amusingly enough) and be rebranded as The Topps Company, Inc. The $13 stock price meant a total valuation of around $71.29 Million, which seems like a bit of a devaluation (hard to tell with this stuff, there's so many loopholes and ins-and-outs). I ended up with a share of same in 1994 thanks to an old buddy named Dale Beaumont:

This bubbled along, despite the inevitable ups-and-downs of the stock market, quite nicely overall until Mr. Eisner and Madison Dearborn came along with their $385.4 Million in 2007 and took the company private once again, with the Shorin's and friends no longer directly involved once the deal closed, although some family and insiders fulfilled (very brief) consulting roles with the new ownership group. 

Eisner though, kept the company fairly intact in spirit and fact after the purchase and then tried to sell the whole magilla for $1.3 Billion in 2021 after his plans for expansion ran up against Madison Dearborn's preference to control costs and merely ride profits forward. That deal - which seemingly turned into a disaster when Major League Baseball and the Major League Baseball Players Association decided to let their licensing with Topps expire eleven days before the close of the deal and instead go with Fanatics -  would have seen a hedge fund called Mudrick Capital take control.  Mudrick planned to merge with Topps, while Eisner planned to roll his 46 Million shares (worth $800 Million plus kids!) into the new company, which was intended to operate as a SPAC, while Madison Dearborn cashed out entirely. The stock symbol would have been: TOPP

There was a lot of boo-hooing in the press about how he got snookered and was no longer a force in the business world (and in fairness, no one at Topps seemed to catch on that MLB/MLBPA and Fanatics were in their own talks) but in the end Eisner seems like he ended up doing OK. Fanatics bought the Topps brand, assets and licenses in either very late December 2021 or very early January 2022 for $500 Million or so (the exact figure seems to be slightly less than that round number) while Eisner and Madison Dearborn held onto Bazooka Candy Brands and a gift card services unit called TDS, which stood for Topps Digital Services.  

You know those giant racks of gift cards you see at the supermarket?  TDS provide the processing backbone for them! Topps seems to have acquired that firm, originally called GMG Lifestyle Entertainment, then based in Minneapolis, sometime during the reign of Eisner (and possibly as early as 2007) but specifics are a little hard to find due to this all being in the realm of private equity. I suspect the original GMG involvement was to help Topps manage all of their redemption and loyalty programs.

Bazooka Candy Brands, despite the fading market share of its namesake bubble gum, still manufactures, among a myriad of other confections, Ring Pops, which sell gloriously year-after-sticky-fingered-year. That remnant of the business was sold to Apax Partners for a reported $700 Million in October 2023. Then early 2024 saw the sale of TDS to Ziff-Davis for a rumored $170 Million, formally ending the Eisner era at Topps.

If you are tallying all that at home, it adds up to around $1.37 Billion, essentially what the 2021 sale to Mudrick Capital was to gross. I dunno, this Eisner guy is pretty good at business after all!

Don't Cello Me Short

Friend o'the Archive David Danberg posed a question to me recently about which specific packs could be found in which specific boxes of 1969 Topps Baseball cards. It's an interesting question because this is the year Topps sold both five and ten cent packs of cards; the former in traditional wax livery, the latter in a printed cello that was offered in seemingly in some kind of fairly widespread and lengthy test (at least as far as their test issues go).

To refresh our collective memories, these were those, wax first:

You can see this nickel pack which I believe is from the first series, was produced in Brooklyn.  This would change with the fifth series as the origin switched to Duryea. 

But Topps also issued 10 cent printed cello's, which are extremely hard to find today, all through the baseball season:

Note the see-through quality of the front, especially within the white circle, where you can see the gum, and on the back, where a clear, little window shows off the bottom card which shows above and below as well. The yellow panel used on the wax pack to describe the Magic Magnet Set is white and semi-transparent here, then the art for it is rotated ninety degrees for some reason.  As I said, they are tough packs to find and wrappers are even tougher as these tended to self-destruct upon opening.  And just like the wax packs, these were also released series-by-series; this pack too is from the first.  All printed cello's, no matter which series they held, show they were produced in Duryea.  It's an interesting divide and it makes me think a lot of the testing of this pack (and new ten cent price point, albeit still at a penny per card) could have mostly occurred around the Topps complex there. 

Topps being Topps though, they still issued a traditional clear (and gumless) cello pack in 1969. Here's some more first series action:

There were at least three other distribution methods used as well, two of which I will get to shortly (there was also the self-explanatory vending release). 1969 was an immensely interesting year for Topps, as they had major league expansion to navigate, with the MLBPA's boycott of Topps photographers ending as well. There were also two miniaturized sets which used the card design, one standalone and one an insert, plus Supers, Stamps and Deckle Photos available at various points to tempt the tykes. Topps was flooding the market after making nice with the MLBPA, whew!

Right, so Mr, Danberg's question was related to the cello "wax" packs.  One of the great things about Topps (and also quite frustrating at times) was their use of Commodity Codes for their products. This provided a way for them to track all the costs and profits associated with a particular project (usually a specific set, allowing that was not always the case) through its sales cycle, although some inside knowledge to navigate the system over several years sometimes (more on this below) was surely required. Friend o'the Archive Lonnie Cummins has been researching these codes for years and is still trying to decipher the part of the string that comes after the stock number.

The five cent wax packs had a first series commodity code of: 0-401, where the three digit stock number is 401. This ties to the five cent box's stock number of 1-401, so they are a match, of course:

Isn't that a great looking box?

The ten cent printed cello's code starts off as 0-301 but there's two possible boxes as this guy also was produced:

It starts off with a 1-401 commodity code and while the clear cello's have no printed code, they tie in at 401 due to the lack of gum.

The last digit of the code is a 7 (for 1967), meaning Topps had been using this box for the two years prior to selling clear cello Baseball packs. This is one of the anomalies with the codes and I'm not sure if Topps just wrote the entire production of these boxes off to a specific 1967 budget or if they somehow amortized the cost. One thing is for sure, leftovers never got tossed, just re-used.

That leaves us with the ten cent box, which should follow the 301 stock number found on the printed cello wrappers:

(Courtesy John Moran)

David checked his collection for this box's stock number and it is, no surprise, 1-301.  Game, set, match.  Also, this six-pack of sorts was marketed in 1969, continuing a configuration that debuted in 1967:

The back is quite busy and the commodity code is small and hard to see but it reads 1-401-30-01-8, so we have a cardboard tray that was also used for the 1968 marketing:

There were also rak-paks:

OK, now it gets a little weird.  While Topps used to sell rak paks that contained three overwrapped cello packs and only changed that procedure in 1968, when the cards were bagged loose in each "cell" of the rak. The rak header card seen above, with a code of 1-081-93-03-7 debuted in 1968, while they were debuting cello pack-free raks!  In 1967 it looked like this:

While the code on that also ended with a 7, although the stock number was different.  Se we'll call the "New Trading Cards" pack the "new" header  and the one with the batter the "old"one. The 1967 Football raks used the "new" header" so they didn't carryover from Baseball that year. And the codes had only debuted in 1966 in general, as did the famous curved-t Topps logo. 

So what gives? Durned if I know.  All I can tell you is after 1967, I consider this the best-looking regular-issue Topps set of the decade, which I realize may not reflect the hobby's opinion at large. Beyond that, in order: 1965, 1960, 1963, 1966, 1962, 1961, 1968 and 1964. Your experience may vary!

P.S.-WTH, let's do the Fifties and Seventies as well, ranked best to worst by yours truly:

1957, 1952, 1954, 1953, 1955, 1959, 1956, 1958.

1971, 1972, 1970 (best reverse ever BTW), 1975, 1973, 1979, 1974,  three way tie for last.

We Pass The Savings On To You

Friend o'the Archive Mike Savage recently sent along some significant lists of specials from Woody Gelman's Card Collectors Company, issued but a mere fifty years (!) ago. There is some excellent information contained in these flyers about a brace of test issues which feature some of the toughest items Topps ever put out and show how CCC was used as as one of their conduits for unsalable overstock.

Today let's take a look at Specials of the Month list #4, which came riding along with a more traditional CCC catalog in this handily postmarked envelope:

I don't have a copy to show from my collection but that would have been Catalog #26 in there, dated January 15, 1974.  The list of specials is a wonder to behold:

In order, from the top we get a series of older insert and oddball sets being bled off, plus some excess from Woody's personal stock of tobacco cards.  The 1951 Red Backs were still being stocked, almost a quarter-century after their issue (and 1952 reissue)-impressive!  The tobacco cards were from the T205 and T206 sets and would have been alien to most of the CCC audience.  The 1959 Fleer Ted Williams set was not, as we have learned in the sixty-five years since it's issue, "very scarce" and in fact is quite common.  Even the elusive card #68, which was pulled over a rights issue with Topps involving the use of Bucky Harris's image, has been graded in abundance over at PSA, with 1,140 slabbed and counting.

1969 Super Baseball was a set that was held in some abundance by CCC and hopefully this list got people ordering it because about fifteen months later, their warehouse would be substantially consumed in a fire, with the set's population being disproportionately wrecked. Those sets purchased from CCC after the fire would often come with singed edges!  The 1968 and 1969 inserts were pure overstock and while it's not at all clear if the 1968 Baseball Game being offered was the boxed version, the "Batter Up" language suggests it could be. The 1964 Giant Baseball cards were massively overproduced as Topps issued them after the 1964 All-Star game to middling consumer interest.  Those 1970 Super Football cards, while not as common as the '64 Giants, seem like they suffered from a lack of interest as well.

This is all preamble though, as we get to the meat of the specials.

1973 Baseball Team Checklists? Those were the blue bordered ones that almost no one seems to recall getting in packs that year. Now, were they sourced loose or from the extremely scarce perforated mail-in premium sheet?

Next up, the 1973 Baseball Candy lids.  I find it hard to believe but I've never really posted about these, or the actual lids at least. While surviving quantities are pretty high for a true test issue (I suspect regional tests vs. the old, semi-mythical Brooklyn candy store tests for these), they are somewhat tough, especially in nice shape. The little lift-up tab is usually found creased and bent and then the images are often horribly off-center.  This one's not so bad actually:

Moving along, here you could have purchased the eight-card '53 Reprint "set" that Topps mysteriously produced in 1972, allegedly for a banquet or gathering of some sort. It's a bizarre set, with misidentifications and a bewildering assortment of players.  Here's a proof sheet of the eight subjects from this difficult issue:

The 1973 "Baseball Cloth Sticker Sets" are the cloth versions of the 1973/74 Action Emblems, an abortive Topps attempt to circumvent the licensing of team logos from MLBPC. These are not well-known and I'm not sure if PSA even grades them. They seem to suffer from the adhesive being somewhat melty and gooey if not stored properly over the years:

Toward the bottom we have two inexorably linked sets (due to a common player selection) from 1973, the uber-difficult Baseball Comics and Baseball Pin-Ups.  I think they are also linked in a way to the Action Emblems in that they feature no logos. Either way, they are a really superb looking set:

I'm not sure why but the Pin-Ups are a little more available and survive at almost exactly a 2:1 ratio compared to the Comics, but make no mistake they are also extremely hard to find:

Concluding today's look back in wonder, we have the 1972 Cloth Baseball Stickers.  I think the reference to 55 being in the set is a typo, no one has seen more than the 33 known subjects in full, all neatly doubled in full array on this uncut sheet that displays portions of both slits. Some very tantalizing slivers can be seen too but I can't say undamaged stickers exist for these edge riders:

These are roughly as prevalent as the 1973 Baseball Pin-Ups, although it's worth noting those truncated stickers at the top of the sheet do turn up in their slightly decapitated form, as do all the others to a lessening degree.  This seems to have been a materials test, which was continued in 1976 before Topps finally got the formula down for 1977.

Topps had a couple of other dealers who helped send this stuff out into the world, like Bill Haber, who was a Topps employee just like Gelman but preferred selling things directly at New York City area collectible shows, which were not exactly in abundance at the time.  You really needed some expert timing to take advantage and realistically, it wasn't the average ten-year-old buying up all the test issues.

All You Need Is Cash

Well, here's the last of the Topps Annual Reports that were dispatched to me last year by Friend o'the Archive David Eskenazi, covering 1983 (with a very interesting addendum).

1983 looked a lot like 1982, report-wise.  The cover is minimalist, yet effective:

The Nature of Business Statement expanded by a paragraph from 1982:

I'm not sure why these had to be so specific as the annual reports usually had enough detail to get the point of the various business ventures across.  To wit, here is page one of the Shareholders letter, bearing a lot of good news:

Thanks to BFF o'the Archive Jeff Shepherd, we can see what the Sweet 'N Low sell sheet looked like:

I'm not sure the product sold all that well as there seems to be a lack of surviving examples.

Otherwise, things were steadily moving onward and upward:

A number of accounting method changes litter the rest of the 1983 report, which is chock-a-block with tables.  I'm not sure if those changes had anything to do with this...

...but check these figures out. You can see why the Board of Directors was in favor of the merger (with itself!), as it was gonna make most of 'em all a lot richer:

Driving all of this seems to be a surge in the common stock price, which really took off after a two-for-one split in April of 1983:

Here's some quick math on the shares going to the BOD, using a pricing of 25 dollars per share.  Arthur T. Shorin's 850,000 shares would be worth a cool $21,250,000 once the deal closed. How about Sy Berger?  His 250,000 shares would bring $6,250,000 and he wasn't even on the Board! And this is in 1984 dollars. Multiply it out to 2024 and it's almost three times as much. Whew! You can see why this notice ran almost 80 pages as there was a lot of verbiage about how wonderful the merger would be for all shareholders. You can also see how valuable Sy Berger was to Topps.

Coming back to earth, we get a nice snapshot of the various Topps properties held at the time of the Special Meeting:

Proxy Statement Note 3 mentions it cost Topps $414,000 a year to lease the Duryea Plant but that title would pass to Topps once the lease expired in 1986, assuming the remaining payments were made. In other words, Lease-to-Buy.

The 1980's were a heady time for Topps, although the bubble would eventually burst (sorry, had to do it.)

Gum Kind Of Wonderful

This will be the penultimate look at the four annual reports sent to me last year by Friend o'the Archive David Eskenazi.  The numbers can get pretty tedious with these things so I'll focus more on developments at the company and its business this time out.

The fiscal year ending on February 27, 1982 was a good one for Topps and its investors, a very good one in fact, as competition from Fleer and Donruss focused a lot of media attention on baseball cards.  The cover of the 1982 annual report continued the austere look of the past two years, although a significant upgrade in paper quality signaled prosperity was just around the bend:

For the second year in a row, Topps ran this little blurb on the table of contents page:

The technology described is non-specific but over the ensuing decades Topps would develop things for their own use then market them to the world at large as the nature oi their business evolved.

The 1982 Shareholder's Letter had all sorts of good news to share.  Sales had increased by seven percent over the year prior and there was a massive jump in working capital:

One of those new products mentioned would be the 1981 Baseball Stickers, which were followed by  a gridiron version in the fall. Leading off page two we see the Fleer anti-trust suit against Topps had run its course and that Topps had ultimately prevailed, sort of.  What this meant was that competitors could not sell their cards with confections in the packs.  This may not seem like a big deal but I'm wondering if it meant companies like Fleer and Donruss lost access to the traditional tobacco/confectionery jobbers that distributed a large portion of their cards.

Here's a little more on the Fleer suit and their  unsuccessful appeal to SCOTUS:

Fleer responded by pulling the gum and adding stickers to their packs:

While Donruss went with puzzles instead of the sticky stuff:

Here's the crunched numbers-the cost of sales at 67.3 percent was, if I'm not mistaken, pretty swank:

$2.79 Million in net income was an excellent result. The explosion in popularity of baseball cards was real and Topps was positioned better than any other company to take advantage, as we will see next time out.