Essential Reading: Card Sharks

February 27, 2009 at 2:17 am | Posted in Random | 14 Comments

No, this post isn’t about this kind of card shark:

It’s about the book Card Sharks: How Upper Deck Turned A Child’s Hobby Into A High-Stakes, Billion Dollar Business by Pete Williams, which was published in 1995.  I read about this book on the internet sometime last year (I can’t remember where) and then purchased a copy on eBay in the early summer, and eagerly read it whenever I had time throughout the summer.  I’ve been planning to write a post about it for about six months, but I never got around to it before today.  Recently, Marie from A Cardboard Problem offered to swap her copy of The Card for my copy of Card Sharks, and I decided that I would finally write my post before mailing the book to her.

I cannot recommend Card Sharks highly enough for any collector.  It is definitely a must-read.  The book did a great job of informing me about the history of the card collecting hobby, and it also taught me to be very cynical about the people who are running the card companies.

Although the book’s subtitle might lead you to believe that it is only about Upper Deck, the first four chapters cover the entire history of the hobby prior to Upper Deck’s formation.  It was incredibly interesting to read about the advent of tobacco cards, which were started in Durham, North Carolina, very near where I now live.  The book also covers the beginning of Topps, its competition with Bowman in the 1950s, and its eventual acquistion of Bowman.  This led to Topps’ monopoly on the card industry, and its efforts to prevent Fleer from producing baseball cards.  It was very eye-opening to learn about all that Fleer had to go through for more than 20 years in its battle with Topps over the right to produce cards.  The book also details the explosion of the card industry after Fleer and Donruss finally started making baseball cards in 1981.  At the same time, the hobby itself began to grow into what we are familiar with today.

It’s hard to imagine how different the hobby was in the 1970s, but the book describes how the major collectors of that time would place classified ads in newspapers and travel to towns all over the country to buy old cards from people who had no idea of their value.  It’s amazing to think about how astonishing it was in 1980 when three 1952 Topps Mickey Mantle cards sold for $3,000 each at an auction in Philadelphia, an event that led to a dramatic increase in the value of older cards.  The book also talks about the beginning of The National, and the beginning of the Beckett price guide, back when the Beckett name still had integrity and relevance within the hobby.

After the first four chapters, the next 18 are about the rise of the Upper Deck company.  It all started at a card shop called The Upper Deck that was near the Angels stadium in Anaheim, California.  The shop’s owner, Bill Hemrick, had been fooled into buying a large quantity of counterfeit 1984 Donruss Don Mattingly rookie cards.  He met an executive from a graphics company, Paul Sumner, and the two of them started to plan a new card company that would use hologram technology to prevent counterfeiting.  Along the way, they needed to recruit several investors, and one of them, Richard McWilliam, eventually wrested control of the company from them.  McWilliam was calling the shots by the time the first 1989 Upper Deck cards rolled off the presses in 1989.

The book goes into great detail about the many challenges that Upper Deck faced in starting up, including getting licenses from MLB and the players association, and just how close they came on several occasions to seeing everything blow up in their face.  It’s actually pretty miraculous that they were able to overcome all of their obstacles and produce a set as iconic as 1989 Upper Deck has become.

Of course, Upper Deck was a major success and completely revolutionized the hobby.  As the company began to grow, we learn about the greediness of Richard McWilliam and his complete lack of ethics.  It’s almost hard to keep up with the names of all of the Upper Deck executives who were hired and fired in the early years of the company.  But there were two reprehensible acts that McWilliam spearheaded that really made me cynical about Upper Deck and the entire card industry.  I’m not sure how well known these things are, but I have a feeling that many of today’s collectors do not know about them.  If you plan to read Card Sharks, what I’m about to write about might be a spoiler, so you might want to stop reading.  But whether you read it here or in the book, I promise that you’ll never look at Richard McWilliam’s facsimile signature on the back of your Upper Deck autograph and relic cards the same way…

The first reprehensible act was related to the Dale Murphy reverse negative error card from 1989 Upper Deck.  The error was corrected during the printing of the cards, and Upper Deck announced that only about 20,000 of the error cards were printed.  This was in the days of massive overproduction, and a print run of 20,000 was considered amazingly low.  The card’s value soared on the secondary market, and by September 1989, its Beckett book value reached $100 (when Beckett’s book value was an actual reflection of the market value).  Even though Upper Deck was making a ton of money from sales of its incredibly popular first baseball card set, McWilliam became angry that he was not benefitting from the high secondary market value of the Murphy card.  In the summer of 1989, he ordered the Murphy error cards to be reprinted, and 13,500 of them were produced.  McWilliam and other executives then secretly sold the reprinted cards to dealers.  This increased the supply of the cards, and not surprisingly, the value quickly began to drop.  Essentially, people who invested in the card after being told that there were only 20,000 copies were screwed, while McWilliam’s wallet was fattened.

This apparently happened many times over the next few years when the secondary market value of a particular card was high.  Needless to say, this was incredibly unethical.  While the serial numbering of valuable cards would seem to prevent this sort of thing from happening today, it’s not hard to imagine Richard McWilliam concocting other types of schemes that we don’t even know about yet…

It got even worse with the sad story of Upper Deck French hockey cards.  When Upper Deck first produced hockey cards for the 1990-91 season, they also made French language cards to sell in Canada.  The French cards sold very poorly.  When Upper Deck began planning its high-number series for hockey in the spring of 1991, they decided to produce only 620 cases of the French cards due to the low demand.  However, when they leaked out that they only produced 620 cases, the demand for the cards shot through the roof.  To give you an idea of how small of a supply 620 cases were, Upper Deck had produced 162,876 cases of baseball cards in 1990.  The cases began selling for over $10,000 on the secondary market.

When Upper Deck saw that cases of the French hockey cards were selling for $10,000, McWilliam ordered a reprinting of the cards with 960 more cases being produced.  Given the secondary market value, these new cases were worth $9.6 million.  The cases were distributed to Upper Deck executives and board members, and many of them sold the cases, thus increasing the supply that was on the market, and bringing the value of the cards down dramatically.  People who had bought the cases for $10,000, and even collectors who bought boxes, packs, or singles of the cards when their market value was significantly higher than the English cards, were royally screwed.

The only bad thing about Card Sharks is that it’s 14 years old.  I’d love to read a follow up book, with inside information on everything that has happened in the hobby since 1995.  That includes the introduction of relic cards, the increased prominence of autograph cards, the demise of the original Donruss-Leaf company, Pinnacle, Pacific, and Fleer, and even everything that went on behind the scenes when Upper Deck almost purchased Topps in 2007.  It would also be very interesting to read about the decline of Beckett and hobby shops along with the rise of eBay and other web sites in the 21st century.  And of course, there have probably been many other unethical schemes that are just as bad as what Upper Deck did with the Dale Murphy reverse negative card and the French hockey cards.  Where is Pete Williams when we need him, or for that matter, where is any serious journalist covering the sports card hobby?  Maybe the blogs really are the true industry watchdog today.

Hopefully I’ve helped to pique your interest in reading Card Sharks.  It really was an outstanding book that was very well-written, and it provided a wealth of information about the history of the hobby and Upper Deck’s early years.  I really believe that every collector should read it.  Now it’s your turn, Marie…