Wednesday, April 7, 2010

The Upper Deck Seats Are Getting Empty

Recently I - along with my brother who operates - have been fairly outspoken about Upper Deck's troubles with the MLB, Konomi, Lawyers, Fake Twitter Accounts, Awards and other matters.

Most of my loyal listeners know that I am very interested in the Stock Market and trading stocks...and its this background that has led to my sometimes harsh criticism of Upper Deck Company. The signs of a failing company are staring everyone in the face with loss of all 3 major sports trading card licensing deals (NFL, MLB, NBA) Not only that, but the CEO being linked to counterfeit cards and a failed attempt to continue to make baseball cards.

What does Upper Deck have left? They told me via Twitter:
@SportsCardRadio We hope so too. Hockey, CLC and our Entertainment properties should keep things going for us. CC

Basically - this is like the Coca-Cola company saying "We are not selling anything but Fresca" ... Is Upper Deck going out of business? No. Some other company would 'buy' their proprietary brands if it came to that. However, they have to downsize - and they have to do it in a hurry. Upper Deck's revenue, cash flows and profits are going to hit record lows and if they don't start cutting expensive "exclusive" athlete deals like Tiger Woods, Michael Jordan, Derek Jeter and LeBron James ... they won't last. You don't see a ITG, TriStar or Razor sign an athlete of that caliber.

Its known that Upper Deck has laid off many workers - and for the good of the "Company" - they might want to hand out more pink slips.

They should also think about moving out of the multi-million dollar southern California offices they occupy and move to a much smaller and less glorious location.

Why? ... Because they aren't going to have the product lineup to fund the Upper Deck that collectors are used to. The director of sports for Upper Deck said it himself that Upper Deck Series 1 is basically the only set the company makes huge profits on (because its a massive 1990's print run) - those sets are gone because Upper Deck can't make cards in quantities like that any more. They have to run a 'lean' business as the smaller manufactures like Razor and TriStar seem to do. (In fact I see TriStar is hiring un-paid College Interns)

The story of Upper Deck is so familiar in the business world: Huge run up and profits from a bubble in the market - then slow to react when the demand returns to normal levels. The seats aren't empty yet ... but its getting close.

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