By: Darren Rovell
CNBC Sports Business Reporter
The NBA’s top rookies are in New York Aug. 17 to get their pictures taken for their trading cards. We sat down with Mark Warsop, CEO of Panini America, which has the exclusive rights to make the NBA product, to talk about the NBA and the state of business.
Darren: Let’s get to the NBA first. You’ve signed Wesley Johnson and Evan Turner to card-only memorabilia deals. I understand you have one more big one coming.
Mark: Yes, today we’re announcing that we’ve signed John Wall to a one-year memorabilia deal. Unlike Wesley and Evan, that includes all of John’s memorabilia — jerseys, shoes, autographed prints.
Darren: So John is now part of the business that you started with Kobe last year. You also have his exclusive memorabilia. We haven’t seen much in that category yet. What can we expect and when can we expect it?
Mark: We’ll be selling game-used items, including jerseys and shoes. We’re building a separate site just to sell his authentic memorabilia. We don’t have the prices yet, but it obviously depends on the game. Some of Kobe’s game-used items have sold for more than $10,000.
Darren: The sports trading card business is not the business it was at its peak about two decades ago. There was oversaturation, there was the focus on the investment and it got away from the kid market. Where are you now in the business compared to where you were a year ago when you entered the American marketplace?
Mark: We knew we had quite a lot of work to do. But I’d say we’re in much better shape today than a year ago. Part of that has to do with a good rookie crop in football, hockey and basketball and some of that has to do with the economic recovery. But we’re well on our way to getting kids back into collecting, so this will become a sustainable business. The sticker business is something we’ve been in for a long time, but it’s relatively new to the children’s market here.
Darren: That’s where I knew the Panini name from — the sticker books I collected when I was a kid. So there is embracing of that product here in the US?
Mark: Definitely. We’re very pleased with the initial sales. Sales volumes for our FIFA World Cup sticker book, were incredible — we sold more than 10 million packets of stickers in the US alone. And we’re excited for our NFL sticker collection, which will be released in October. The unique part of the sticker business is that we’ve gotten retail acceptance in areas that don’t normally take some of our hobby products — particularly in Walmart, Target and CVS. People like that it’s $1 a pack and that once you start, you’re motivated to complete the collection.
Darren: What else are you doing to get kids back into the collecting game?
Mark: Take our Adrenalyn set that just came out. Every card has a code on the back and the collector can register on our Web site and put the code in. They then have their own virtual locker room full of cards. With that locker room they can play a game that we’ve developed. Kids have a very short-term memory. They want cards and they want to play with them. When you say that they have to wait because it’s an investment, we’ve found that they don’t want to hear that.
Darren: A lot was made recently about virtual cards — cards that you can buy on the computer and own them virtually. Your thoughts on that?
Mark: We like using the new media to enhance physical trading card sales. But we want to focus on retail. We don’t want to do anything to drive people away from buying the physical product. You can’t beat that sensation of having that physical card in your hand.
Darren: The leagues have done a lot to cut down the number of licensees. You’re exclusive with the NBA. It’s only you and Topps in the NFL. How has that helped the industry?
Mark: Well, there was a lot of confusion and way too many products. And we still feel that’s the case. We’re trying to reduce the number of sets that we make — we’ll have 20 NBA products this year.
Darren: What’s the most popular trend in the business right now?
Mark: Autographs are still incredibly popular and so are jersey cards. We’re making a greater effort to get the autographs directly on the cards instead of on stickers because we think the consumer likes that better. People also love the prime patch — the piece of the jersey card that has the best part of the jersey in it. We’re coming out with a card that has wood in it. You can see the grain through the card and we think collectors will like it.
Darren: A year ago, a lot of people were wondering if the Italian memorabilia producer could make it here. And you definitely have.
Mark: We didn’t want anyone to see a drop in the quality of cards being produced. And judging from the message boards people were happy how we treated Donruss*. Now they say that Panini has the best quality so we’re pleased with our first year.
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