On trading cards, player likenesses, and the funding of the MLBPA

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The news that MLB, the NFL, the NBA, and their three respective player unions all got together with Fanatics to completely rearrange the sports trading card world seems to have shaken that world. I’ll leave the concerns about quality control and that Fanatics hasn’t ever made cards before to those who know trading cards, but this news still presented an opportunity for me to dive into something labor-related from the past.

The history of baseball cards and the Major League Baseball Players Association is tightly interwoven. There is even an entire chapter dedicated to the business of baseball cards in the memoir of the PA’s legendary former Executive Director, Marvin Miller. And that’s because it was through baseball cards that the Players Association was initially able to fund itself and its actions — a necessity for a group set to challenge those with pockets as deep as even the owners of Miller’s day:

Bowie Kuhn later wrote wistfully about the “advantages” I had in the union’s struggles with the owners. Here’s what we had: no money, no office, no staff, and no union consciousness. Even the players who were the activists had no real idea of how to finance the organization or what its functions should be.

Early in 1966, the Association had a makeshift dues structure of $50 per year. If all the players, coaches, managers, and trainers supported the organization (and a considerable number did not), dues would provide about one-fifth of the budget of $150,000 a year that they decided the Association needed to become a self-sufficient union.

Miller went on to explain that the players (before he had gotten there) had gone to the owners to find that $150,000, taking it out of profits from the All-Star Game, even though it was illegal for a union to be funded by employers’ money. The pension relationship was fine, but funding a union so it has a staff, an office, and so on is another story entirely. When Miller showed up, that arrangement vanished, because the league was hoping that the MLBPA would run out of cash, Miller would disappear, and the league could get back to business as usual, i.e. giving players little crumbs and shoving some illegal money at them in order to avoid paying out far larger legal sums of cash to members of an actual union.

In his role as Executive Director, Miller would solve the dues problem with a more official setup that, once collected, would exceed the $150,000 estimate the proto-PA had made. As he details in his memoir, though, dues wouldn’t be collected until the following season, meaning there was nothing funding the union in the five months between the formulation of this new dues setup and the collecting of it. This is where trading cards came in: specifically, this is where pitting the trading card companies against each other came in.

Starting what Miller referred to as the “Card Wars” was not going to be a simple task. Topps — the same Topps that just lost the rights to MLB to Fanatics — had exclusive rights to the players and paid them paltry sums for those rights, with the company, in Miller’s words, “signing up an inexperienced player with no knowledge of the potential value of his name or picture, and who was flattered to have his photo on a trading card,” then paying them peanuts. Topps never sent players a copy of the contracts so they could be carefully studied or challenged, even going so far as to allow players to come see the contracts in person, but without the ability to take them from the premises where they were stored. You can imagine how many players took them up on this generous offer.

But that’s what Miller and the PA were here for, to let the players worry about player stuff while the union sorted out opportunities to improve the players’ lives. The PA figured out that a group endorsement including all of the players could be arranged in such a way that it could finance the early days of the PA: they got such an endorsement with Coca-Cola, one that went through once the logos on players’ uniforms were airbrushed out for the photos found on the underside of Coke bottles. So began the licensing program for the MLBPA, which led to the solution of Topps’ monopoly over the baseball trading card world.

Miller convinced the players to not sign contract renewals with Topps, using the licensing money earned from the Coca-Cola deal to prove to players how much their likenesses were actually worth, and how much more money could be made granting the use of those likenesses if they stood together instead of letting Topps individually trample all of them. Joel Shorin, the president of Topps who had been dismissive of Miller’s desire to renegotiate these deals in a prior conversation, saw what was happening as players refused to renew or sign initial deals with Topps, and decided that maybe it was time to negotiate with the PA.

These negotiations resulted in a doubling of the payments players received from Topps annually, from $125 to $250 — that’s over $2,000 with inflation, which still isn’t huge, but is obviously more significant than it appears at first glance, too, especially when you consider that Miller and the PA got that figure doubled. More importantly than the doubling for the initial use of the likeness is that Topps agreed to pay players a portion of the revenues from sales of those cards, with eight percent going to players for sales of up to $4 million, and 10 percent for sales beyond that. Royalties from the first year of this new arrangement totaled $320,000 ($2.6 million accounting for inflation). That’s a massive sum considering Topps was handing out $125 or letting players decide they wanted a new microwave or whatever from a catalog instead of that $125 previously, and it’s all because Miller got the players to stand together and stop letting Topps take advantage of them.

Further, Topps no longer had exclusive rights to player photos: they only had the rights to photos of the specific size that they used in their cards. This inevitably led to an antitrust suit directed against both Topps and the Players Association by Fleer, which claimed the two groups had conspired to keep them out of the market. The Players Association and Topps lost this lawsuit, though, in reality, the PA won: it’s not like they wanted to be stuck exclusively with Topps, and as Miller points out, Topps had threatened to sue them multiple times for their attempts to workaround the exclusivity of their deal in ways that didn’t actually go against their agreement:

The federal court ruled… that we were in restraint of trade, ordered the Players Association to offer to sign contracts with other interested bubble-gum card companies, and said Topps must grant us this right despite the fact that they had exclusive rights.

Ironically, we lost the case and accomplished our main objective. But imagine the stupidity of such a decision. The record, and plain and common sense, showed that the Players Association could only benefit from breaking the Topps monopoly, and, in fact, it had struggled to do just that.

Fleer followed up their lawsuit against the Players Association by offering them a contract, and Donruss got in on the action, too, now that Topps’ monopoly was broken by the courts. The MLBPA had gone from one shady licensing deal with individual players to a jointly negotiated one, to three, all in a short span of time. Obviously, this was to the benefit of the players, and helped set up the PA as a force in licensing, too.

Licensing agreements allowed the Players Association to fill its own coffers in order to be self-sustaining and better prepared the players themselves for any kind of work stoppage, as they would have access to funds that weren’t directly tied to the owners and the playing of baseball games. They also allowed the players to make some extra money on the side for themselves, and this newfound ability to work together instead of solely as individual actors in a business world designed to prey on that exact kind of person meant the amounts of extra money were going to grow and grow. That Miller’s re-negotiations with Topps helped end the monopoly the trading card giant had without the PA actually having to go head-to-head with them is some real quirks of the law stuff, but it sure was effective.

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