Can Topps still play ball?

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Many in the industry blame a shift toward higher-priced premium card sets, with fancy inserts. Whereas a regular pack of Topps cards costs around $3, other sets sell for considerably more. The Topps Sterling collection, which features limited-edition signature cards in a cherry wood box, is aimed at collectors and costs around $300. "They priced the kids right out of it," says store owner Odetalla.

And then there's the stepbrother of sports cards — trading card games, which first came onto the scene in 1993 with the Magic: The Gathering series, printed by Wizards of the Coast, a company later bought by Hasbro. In the past decade in particular, "trading card games have skyrocketed in popularity, value, and overall appeal," says Beckett editorial director Doug Kale. "With trading card games you can interact with other friends," he adds — and that's a big plus with the video-gaming, MySpace generation.

Magic: The Gathering still has a following of about 6 million customers worldwide between the ages of 15 and 25, according to Kale. One Topps rival — privately held Upper Deck in Carlsbad, Calif. — also jumped into games when it bought the international licensing rights to Konami's Japanese game Yu-Gi-Oh!, which sold some 15.8 billion cards between 1999 and 2006. Topps still sells no games, and may be missing a big opportunity.

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Clearing the field
One possible way forward is interactive cards. Mattel introduced its HyperScan card games in 2006. They use CD-ROM and radio-frequency identification (RFID) technologies to allow users to select a character from a card, such as The X-Men's Wolverine, and have him or her battle an opponent on a television screen, just like a video game. If Topps were to introduce a similar system for professional athletes, it could be a winner. According to retail consulting group NPD, Electronic Arts' Madden NFL 07 video game for Sony's PlayStation 2 sold more than 1.8 million copies in 2006, making it the best-selling game in the U.S.

For most investors with $385 million to spend, a company struggling this desperately to hold on to its core consumer would be close to the bottom of the list. But Eisner, who told the press in March that he plans to "grow [Topps] in new and exciting ways," must see some great promise. For one thing, his timing was financially favorable: Shareholders will receive $9.75 per share, down from a $10 high on Feb. 2.

And though Topps still hasn't addressed the problems most prevalently plaguing it, it did have a rather serendipitous year in 2006. Fleer went bankrupt and Major League Baseball ended licensing arrangements with Donruss, leaving only Topps and Upper Deck to compete in baseball cards. As a result, "Topps had a nice resurgence in its baseball card business," says Jim Barrett, analyst with CL King & Associates in New York. The rookie cards of popular young NFL players Reggie Bush, Matt Leinart, and Mario Williams also brought some resurgence to Topps' football cards.

Cyber-bubble
This is hardly Eisner's first acquisition since leaving Disney in 2005. He has snapped up Team Baby Entertainment, a maker of sports-themed kids DVDs; Veoh, an amateur video-sharing site like Google's YouTube; and Vuguru, a multimedia studio.

As there have been no other offers the board has been willing to consider, it looks as though Tornante and its partners will close the deal with Topps by May 5. Along with Eisner's other deals, this looks to be a key piece of a nascent digital media empire, one that is likely to focus on a younger audience. Only time will tell exactly what Eisner has in store for Topps, but if you've ever dreamed of digital bubble gum or virtual baseball cards — they may soon be a reality.

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