Death and Taxes and Baseball Card Litigation [Part II, 1965-1988]

Author’s Note: This is the second in a multi-part series [Part I] that will explore the legal backstories that have shaped (and continue to shape) the baseball card industry. Once considered mere ephemera used to induce children to buy penny confections (or cigarettes!), the industry has been inundated by costly legal battles waged in the name of baseball card supremacy.

Although Fleer had hoped to wield the Federal Trade Commission as its cudgel, the commission ultimately found that Topps’ business practices did not constitute an unlawful monopoly and the matter was dismissed in Topps’ favor on April 30, 1965. Undaunted, Fleer renewed its efforts in 1966 to sign players at spring training camps and issued its “All Star Match Baseball” set, which featured a 66-piece puzzle of Dodgers ace Don Drysdale on the reverse side of the game cards. After this set was issued (and perhaps a result of disappointing sales) Fleer’s resolve faded, culminating in the sale of its entire player contract portfolio—some 3000 players—to Topps later that year for $395,000 (approximately $3.4 million in today’s dollars).

1967 Topps Bill Skowron (#357), Bill Denehy/Tom Seaver (#581), Bob Gibson (#210)

Having dispatched its closest competitor, Topps was poised for sustained dominance in the baseball card market. Indeed, the 1967 set was its largest to date with a checklist comprising 609 bright, colorful cards. Unfortunately for Topps, its newly bought peace would be fleeting. The next assault, however, would be waged not by rival card manufacturers, but by new adversaries—the Major League Baseball Players Association (MLBPA) and Major League Baseball (MLB).

Frank Scott and the Proto-MLBPA

A “short, feisty, impeccably dressed man,” Frank Scott was road secretary for the New York Yankees from 1947 through 1950 and developed close relationships with Yogi Berra, Whitey Ford, and Mickey Mantle. In exchange for a 10% commission, Scott began to represent those players for off-field income opportunities—namely personal appearances and product endorsements—and eventually developed a client list of over 90 baseball stars including Willie Mays, Jackie Robinson, Hank Aaron, Eddie Mathews, and Robin Roberts. At his peak, Scott was earning $250,000 per year (approximately $2.4 million today) pursuing endorsement deals. One of those deals included landing Mickey Mantle a $1500 payment from Bowman for rights to a photo of Mantle blowing a bubble (although no such card was ever issued).

The Sporting News, September 23, 1953

In May 1959, Scott was named director of the nascent MLBPA—an organization originally created to help ensure the players’ player pension fund was being adequately funded. He continued his player representation business and staffed a provisional MLBPA office at a New York City hotel. Although he had been paid $1000 ($9600 today) a year by Topps for his assistance getting players to sign baseball card contracts, Scott ceased all relationships with Topps after becoming head of the MLBPA.

Considered “too smart to meddle in the players’ salary debates,” Scott avoided contract negotiations between his clients and their respective ballclubs. Similarly, the MLBPA was not yet recognized as a union under Scott’s leadership and did not engage in collective bargaining with MLB on behalf of the players. The direction of the MLBPA, however, changed drastically in late 1965 as a search was undertaken to find a full-time director and establish a permanent office.

The Marvin Miller Experience

Though not their first choice, the stars aligned when the players’ landed Marvin Miller, then chief economist for the United Steelworkers. Under Miller’s leadership, the MLBPA saw unprecedented progress for players’ rights and eventually led to his election to the Baseball Hall of Fame in December 2019.

2015 Topps Heritage (#NF-9)

Miller’s nomination for Executive Director was ratified by a player vote on April 11, 1966. He was given a two-and-a-half-year contract starting July 1, at $50,000 per year (approximately $430,000 today), plus a $20,000 expense budget. In need of quick revenue to fund association operations, Miller prioritized a group licensing program. With Frank Scott’s help, the MLBPA first inked a deal with Coca-Cola to print player photos on the underside of bottlecaps. The team owners demanded that Coca-Cola pay separately to use of their club logos. Coca-Cola refused, however, so the bottlecaps were printed with blank hats.

At the time Miller took the helm, the players were still being paid $125 per year by Topps to use their photographs, the amount unchanged for over a decade. Miller met with Topps’ president Joel Shorin in the fall of 1966 looking to renegotiate. Shorin was dismissive of the ballplayers’ leverage as he quipped, “I don’t see your muscle.” Miller, however, was ready to play hardball with Topps:

“In early 1967 Miller suggested to the players that they stop renewing their individual Topps contracts and boycott Topps photographers. This was the only way, Miller advised, that they could get Topps to deal with them. Although the action was voluntary, Topps was able to take no more than a handful of photos during the 1967 season, and, with the dispute unresolved, none at all in 1968.”   

(Mark Armour, SABR Baseball Cards)

Around this same time, the baseball club owners established Major League Properties, Inc. looking to monetize the use of their logos depicted in the photos taken of the ballplayers. After initially refusing to engage with the owners for these rights, Topps was warned that future player photos should be taken in “street clothes, or in pajamas or bathing trunks.” Accordingly, uncertainty created by the demands made by the club owners and the MLBPA were the main reason hatless, underbrim, and duplicative photos proliferated Topps’ offerings the second half of the 1960s.

The players’ boycott convinced Topps to pursue further talks with the MLBPA in early 1968. Topps’ opening volley was no olive branch, however. At a meeting on April 23, Shorin presented Miller with a legal opinion stating that the MLBPA’s group licensing program violated antitrust laws. The MLBPA responded with an opinion that Topps’ contracts with the players violated antitrust laws. (Ironically, both Topps and the MLBPA would soon have to defend a lawsuit that alleged that they conspired together to violate antitrust laws.)

Fleer (Briefly) Back in the Mix

In a move designed to enhance the MLBPA’s bargaining position with Topps, Miller proposed giving Fleer exclusive rights, beginning in 1973, to sell baseball cards with gum for up to 80% of the MLB player pool—in exchange for $600,000. Alternatively, the MLBPA offered Fleer immediate rights for all players sold with a product other than gum. Fleer rejected both offers, claiming it was only interested in cards sold with gum, and that 1973 was simply too long to wait.

Detente

Despite the hostile start to their renegotiations, Topps and the MLBPA were able to reach an accord on November 19, 1968 that doubled the player’s annual payment to $250. More importantly, Topps agreed to pay royalties on its annual baseball card sales revenue, resulting in $320,000 (approximately $2.5 million today) paid to the MLBPA in the first year of the deal alone. The deal also allowed the MLBPA to grant a license for any products that were at least 5” x 7” and sold for 25 cents, although Topps reserved the right of first refusal as to any such proposal.

The MLBPA issued numerous trading card licenses during the 1968-1974 period to companies like Beatrice Foods, ITT Continental Baking, Kellogg’s, Pro Star, Inc., Madaras, Inc., Pasco, Inc., and Charles Linnett Associates—several of which were granted over Topps’ objection. In 1969 the MLBPA granted Sports Promotions, Inc., a license to market baseball cards “with cheap novelty rings, iron-on patches, and similar novelties so long as the value of the novelty represented half of the total retail value.” Topps complained to the MLBPA that their rights had been infringed when they learned of the agreement. Topps also objected to Kellogg’s selling baseball cards alone through the mail in 1974. Officially licensed by the MLBPA, Kellogg’s sold sets 54 baseball cards for $1.50, plus a box-top from box of cereal (that typically cost 60 cents). The MLBPA did not revoke Kellogg’s license but obtained a waiver from Topps to allow the continued license for cards sold in that fashion. (Topps could not object to the Kellogg’s cards inserted as premiums in Kellogg’s cereal boxes.)

Despite some occasional complaints to the MLBPA, several years of prosperity followed for Topps and by 1974, its sales of baseball cards and gum approached $6 million annually (approximately $34 million today). Pleased with their arrangement, the contract between Topps and the MLBPA was extended through 1981.

A Fleer in the Ointment

In 1974, Fleer’s president Donald Peck approached the MLBPA seeking approval to market 5” x 7” satin patches to be sold for 25 cents each. The proposal appeared to exploit the product size loophole granted by Topps but appears to have been bit of clever subterfuge in hindsight suggested by Fleer’s paltry $25,000 guarantee on projected sales of $1 million. Moreover, Fleer was likely aware Topps and the MLBPA routinely discussed whether proposed licenses infringed upon Topps’ rights.

Topps took the bait and advised the MLBPA that Fleer’s proposal “was probably not worthwhile.” Without explicitly asking that the license be denied, Shorin warned that the large-format satin patches proposed by Fleer would sit on store shelves and likely depress the sales of Topps’ baseball cards, along with the players’ royalties. Not surprisingly, Topps declined its right to claim the license for the satin patch product.

Miller presented both Fleer’s proposal and Topps’ criticism to the players’ executive board for consideration. Fleer’s offer was rejected unanimously because of fears “Fleer’s product would remain unsold on store shelves, prompting store owners to cut back on orders of Topps’ baseball cards.” Additionally, the executive board was skeptical of Fleer’s sales projections and inadequate guarantee. Miller suggested several changes that might secure a license for the product, but Fleer declined. By April 1975, Fleer had dropped its 5” x 7” product proposal all together.

Peck met with Joel Shorin on April 17, 1975 and threatened to file a lawsuit unless Topps granted Fleer the rights to sell “stickers, stamps, and decals depicting active major league players.” Shorin refused, so Fleer approached the MLBPA about joining in a lawsuit against Topps. The MBLPA declined.

The Monopoly Defense, Part Deux

Even though it had apparently abandoned a desire to produce baseball cards of current players by selling off its contract portfolio to Topps in 1966, Fleer kept a toe in the water by selling team logo cloth stickers with its gum from 1967 through 1972. While Curt Flood’s antitrust case captured headlines throughout the early 1970s and pitchers Andy Messersmith and Dave McNally played out their 1975 seasons without contracts in an effort to gain free agent status, Fleer pursued an antitrust case of its own in July 1975, filing a federal lawsuit against Topps and the MLBPA alleging they were co-conspirators in an illegal restraint of trade under the Sherman Act.

1970 Topps Curt Flood (#360) – Flood never played for the Phillies but appears on this card, a perfect example of the “underbrim” shot favored by Topps’ photographers.

Donald Peck claimed that “Topps’ methods had made it impossible for a competitor to bid for rights to the players’ pictures, that the players had been deprived of a chance to maximize their income,” and “the gum and candy industries had been deprived of open competition.” In its complaint, Fleer alleged that it had attempted to obtain the rights needed to produce a set of current major league baseball 5” x 7” cloth stickers as recently as 1974 and was otherwise equipped to reenter the market, but for its lack of “suitable contracts with baseball players.” 

Now united, Topps and the MLBPA vowed to vigorously defend the case, which made antitrust accusations eerily similar to those Topps had successfully defended just a decade earlier in the FTC matter. Joel Shorin remained confident that Topps “had complied with all relevant laws.” Likewise, Marvin Miller was satisfied with the Topps’ arrangement and “would not like to see it disrupted.”   

In response, Topps filed a motion to dismiss asking the court to find that Fleer was a de facto party in the FTC matter, alleging “Fleer took such an active part in the FTC hearings, and its interests were so aligned with those of the FTC complaint counsel, that it had a “full and fair opportunity . . . to present its evidence and arguments on the claim.” Because the FTC matter had already been resolved in Topps’ favor, they felt it unfair to allow Fleer another bite at the apple.

It seems reasonable to infer that Fleer had no intention of ever issuing a set of 5” x 7” satin stickers, especially when they rebuffed Miller’s attempts to restructure the deal. Most likely, Fleer’s proposal was engineered to be rejected by the MLBPA, both by its puny guarantee and bold expectation Topps would exert its influence to sink the project. By perpetuating this bluff, however, Fleer could allege the requisite intention and capacity to reenter the baseball card market necessary to prove its antitrust case.

The court found that Fleer had undertaken substantial steps to compete in the marketing of current baseball player picture cards and had sufficiently pled that the alleged conspiracy between Topps and the MLBPA prevented them from entering the market. The defendants’ motion to dismiss the case was denied on May 28, 1976; Fleer survived round one.

The Pure Card Set

In late 1974, Topps was alerted that Mike Aronstein and Sports Stars Publishing Company (SSPC) was interested in issuing cards featuring current baseball players. Topps notified the MLBPA, who issued a cease-and-desist letter to Aronstein asserting Topps’ status as the “exclusive licensee for baseball cards sold alone or together with confectionary products” of the MLBPA. Up until Fleer’s request for a license to issue its 5”x7” cloth stickers, the MLBPA had refused but one license request—Aronstein’s—because the SSPC cards conflicted with Topps’ rights to sell cards alone.

1976 SSPC cards: George Brett (#167), Steve Stone (#302), Ron Cey, back (#75)

Undeterred by Topps’ monopoly and after success with Mets and Yankees team sets and a 24-card “puzzle back” set in 1975, SSPC set its sights high for 1976, with plans to issue a massive 630-card “Pure Card Set” inspired by Aronstein’s admiration of 1953 Bowman’s clean design. SSPC partner, Bill Hongach, (former Yankees’ batboy and Renata Galasso’s husband) helped obtain the photographs. A young Keith Olbermann wrote the card backs. The issuance of the Pure Card Set in 1976 (though copyrighted 1975), however, involved a fair bit of daring.

Two of Mike Aronstein’s other partners in SSPC were attorneys who opined the company could legally issue the cards because (1) the current players were public figures and (2) SSPC was simply disseminating editorial information about each player. They believed the SSPC format (despite its dimensions corresponding precisely to those of a Topps baseball card) was not substantively different than a photograph of a player accompanying a magazine article. Regardless, Aronstein said they “waited to be clobbered by Topps” once the set was advertised for sale.  

Distribution of the Pure Card Set—printed and ready to ship as of January 21—was stopped in its tracks when Aronstein received notice that Topps had been granted a temporary restraining order. Despite Topps’ later admission it had no issue with TCMA’s minor league and reprint sets (as long as they did not contain any cards of active MLB coaches of managers under contract with Topps), the order also halted distribution of all TCMA card sets and otherwise attempted to put Aronstein’s Collector’s Quarterly magazine out of business. The SSPC operation was small (i.e., no employees) and had gone $40,000 in debt to print the Pure Card Set.  Topps, on the other hand, tallied $8 million in revenue (approximately $40 million today) on sales of 250 million baseball cards produced in 1976. 

Photos courtesy Andrew Aronstein

Eventually, Aronstein was able to reach a deal that allowed SSPC to distribute the Pure Card Set to anyone who had ordered it on or before February 20, 1976. Aronstein was thrilled—SSPC had sold some three million cards (distributed as complete or team sets), which allowed them to cover the printing costs and claim a tidy profit. The deal also permitted SSPC to produce cards of current players in sizes other than the standard 2½” x 3½” size, which led to SSPC’s creation of fully sanctioned 27-card uncut sheets that the Phillies and Yankees included in their 1978 yearbooks.             

Closing out the 1970s

In 1976, Topps and Fleer began to lose market share with their flagship hard bubblegum products (“Bazooka” and “Dubble Bubble, respectively) due to the introduction of “Bubble Yum,” a soft bubblegum product. Despite its new competition, revenue remained healthy for Topps through 1978, with total sales about $67 million (roughly $290 million today), $9.2 million of which (approximately $40 million today) originated from the sales of baseball cards. With revenue of $15.2 million in 1978 (about $66 million today), Fleer surely salivated at the opportunity to issue baseball cards as a way to close its revenue gap.

In 1978, royalty income for the MLBPA approached $1.1 million (approximately $4.7 million today). Topps’ royalty payments accounted for about $847,000 (approximately $3.65 million today) of that total. That Topps payment comprised more than 75 percent of the MLBPA’s total licensing revenue neatly explains why the MLBPA was reluctant to cross Topps.

The Bubble Bursts

Fleer’s antitrust case against Topps and the MLBPA rolled on for the better part of four years in Pennsylvania without much publicity until the defendants were dealt a massive blow on June 30, 1980. After trial on the matter, the district court issued its decision finding that Topps and the MLBPA had acted in concert to exclude Topps’ competitors and were in violation of the Sherman Antitrust Act by having restrained trade in the baseball card market. Damning to be sure.

In order to arrive at its decision that Topps and the MLBPA conspired to monopolize, the court had to find a “specific subjective intent to gain an illegal degree of market control.” As a result, Fleer was entitled to monetary damages and the court was empowered to grant equitable (non-monetary) relief that could levy restrictions on Topps and the MLBPA and/or impose mandatory injunctions that would require defendants to perform specific actions. The equitable relief granted by Judge Clarence Newcomer would change the baseball card landscape forever. 

In order to calculate any monetary damages owed to Fleer, the court assumed that, absent the conspiracy to monopolize, “the MLBPA would have granted Fleer a non-confectionary license for some product” at the market price. The court, however, considered the realities of Fleer’s chances for success in the market, “Fleer has never had a great deal of success marketing trading cards of any type (Topps and Donruss are the leaders in the field), and had it obtained an expensive license, its expertise would have been greatly tested. Fleer’s distribution system is not as effective as that of Topps (Topps uses its own sales force; Fleer works through brokers and wholesalers), and Topps could have been expected to have beaten Fleer to the shelves in the spring. Finally, Topps’ product has a great deal of market acceptance among retailers and consumers.” The court admittedly could not find that “Fleer would have been the company to succeed at the endeavor,” but it at least should have had the opportunity to try.

Damage, Inc.

Generally, monetary damages must be provable in order to be recovered. Unfortunately for Fleer, the court found that trying to quantify Fleer’s losses depended on “an unacceptable amount of speculation,” especially because Fleer was “not a particularly robust company at the moment.” Its sales were roughly a fifth of those of Topps and both companies were suffering loss of market share at the hands of soft bubble gum products sold by larger competitors. Moreover, Fleer had never sold a trading card item that achieved $750,000 in sales.

Even without any conspiracy between Topps and the MLBPA, “Fleer would have faced two obstacles between it and its first dollar of profit. First, it would have had to obtain a license from the MLBPA to market a set of cards. Second, it faced the significant market power of a firmly entrenched competitor.” Because of this uncertainty, the court awarded Fleer symbolic damages of $1 (which was trebled to $3 pursuant to statute). The defendants were also ordered to reimburse Fleer its attorneys’ fees—likely hundreds of thousands of dollars incurred to pursue the protracted litigation.

More importantly, the court permanently enjoined Topps from enforcing the exclusivity clause in its player contracts and prohibited Topps from entering into any player contract that gave Topps the exclusive right to sell that player’s photograph. Wow.

The MLBPA was ordered to carefully consider any applications it received for licenses to market baseball cards and was explicitly required to enter into at least one such licensing agreement before January 1, 1981 “to market a pocket-size baseball card product, to be sold alone or in combination with a low-cost premium, in packages priced at 15 to 50 cents.” Fleer was granted right of first refusal as to any such license. The MLBPA was also cleared to grant as many similar baseball card licenses as it chose to.

Fleer and Donruss Enter the Fray

1981 Topps Bill Buckner (#625), 1981 Fleer Mark Fidrych (#462), 1981 Donruss Pete Rose (#131)

Following the court’s decision in June 1980, Fleer scrambled to assemble its 1981 set. At 660 cards, it was by far the largest set the company had ever produced. President Donald Peck was downright giddy, “I don’t know why we succeeded this time. I guess our case was just presented better. . .We’re just having a lot of fun competing in this area.” He predicted Fleer would sell less than Topps, but “more than Topps thinks.”

In 1980 the standard Topps wax pack contained 15 cards and a stick of gum for 25 cents. Topps included 15 cards and a stick of gum for its 1981 set but increased the price to 30 cents per pack. It also added “The Real One” tagline to its boxes and wrappers for the first time.

1981 Topps Wax Box

Fleer tried to outdo Topps by inserting 17 cards and a stick of gum in its 1981 wax packs, sold for 30 cents. It also included two extra packs in each wax box, promising retailers “60 cents extra profit”! Fleer’s 1981 issue was the first to market.

Donruss was an experienced player in (mostly non-sport) trading cards but had to scramble to produce a set once it was granted a license by the MLBPA in September 1980 (reaping the rewards without having to engage in expensive litigation. Although not a party, Donruss personnel was involved in the Fleer case only as witnesses).

Donruss’ president Stewart Lyman reached out to New York sportswriter Bill Madden, who was hired to write the backs for the 1981 set. Mike Aronstein was granted the exclusive right to sell complete hobby sets that year. Donruss sold its wax packs, 18 cards and a stick of gum, through its established distribution channels.

Unfortunately, the 1981 Fleer and Donruss issues were plagued by errors as they rushed to produce their sets, prompting collectors to question whether the errors were included intentionally to stimulate publicity. Fleer corrected some of its errors in its second printing, some more in its third. By June 7, Donruss was in its third printing and had made corrections to most of the errors that dogged its hastily assembled set. Lyman denied Donruss had intentionally included the error cards as a way to increase sales, “I’m embarrassed we made any errors, but I’m proud so few were made considering the timetable we had to put out the set.”

Can you spot the errors?
1981 Fleer Fernando Valenzuela (#140) and Graig Nettles (#87), 1981 Donruss Bobby Bonds (#71)

Interestingly, the district court observed that as of 1980, “no baseball cards are marketed which include statistics on stolen bases or fielding percentage, game winning hits, successful sacrifice attempts, or any number of other statistics which a competitor might choose to offer to attract baseball card purchasers.” Perhaps it is not a coincidence that Topps and Fleer both included stolen bases on their card backs in 1981.    

The Appeal

Despite having prevailed, Fleer was not fully satisfied and appealed the district court’s decision. Fleer wanted the court to bar Topps from the baseball card market for at least one season and to require Topps to deal only with the MLBPA rather than through its exclusive individual player agreements. In addition, Fleer sought reconsideration of the award of nominal damages ($3). Topps appealed as well, seeking a reversal of the court’s findings of liability, damages, and injunctive relief.

In a bit of déjà vu, the Third District Appellate Court found that the agreements in place between Topps and the MLBPA “were neither unreasonable restraints of trade. . .nor monopolization of the relevant market.” Topps had won the appeal (again). The court held that just because Topps had managed to obtain licensing agreements with the overwhelming majority of major league players “did not make the aggregation of these contracts an unlawful combination in restraint of trade.” They noted further that Fleer chose to leave the trading card market in 1966 and sold all its existing licensing agreements to Topps.

In addition, Fleer had admitted it could compete against Topps for license agreements in the minor leagues, but it would take several years before it could produce a marketable product. The court found that this argument simply “identified a characteristic of Major League Baseball, rather than an illegal restraint of trade” or “an indictment of Topps’ licensing agreements.” While a Fleer may not have been able to sign major league players already under contract to Topps, it could still compete for player licenses at the minor league level. That this might take six or seven years to bear fruit did not make Topps’ agreements anticompetitive.

An examination of licenses granted by the MLBPA for the sale of trading cards with non-confectionary goods demonstrated that the fear of decreased royalty payments did not stop the MLBPA from licensing products competitive with Topps. As a licensor, “the MLBPA is free to grant licenses to any competitor, or none at all.” Ultimately, appellate court held that Fleer had not proven any intent on the part of Topps and the MLBPA to monopolize the trading card market.

In 1982, the U.S. Supreme Court declined to hear Fleer’s appeal, which made final the Third District’s decision.

Restitution in Delaware

No longer free to market their cards with gum, Fleer and Donruss set about to distribute their cards in 1982 with a non-confectionary premium to exploit the loophole in Topps’ exclusive rights to market cards alone or with gum, candy, or confectionaries. (Fleer did not resurrect the cookie packed with cards in 1963.) Though Topps presumably protested to the MLBPA that Fleer’s team logo stickers and Donruss’s Babe Ruth puzzle pieces were simply “sham” products tantamount to selling cards alone, the MLBPA continued to officially sanction Fleer and Donruss, presumably content with the fruits of the royalty arrangements with each.  

In May 1982, shortly after Fleer’s appellate recourse was exhausted, Topps filed a lawsuit in Delaware’s chancery court alleging Fleer was unjustly enriched by “sales of products to which Topps had the exclusive rights to manufacture and sell.” Topps sought to recover the profits Fleer realized on its $4 million in sales (approximately $12.4 million today) of 1981 cards. Fleer president Donald Peck dismissed the charges as meritless and assured that Fleer had no intentions of pulling its 1982 cards from the market. Regardless, in the course of the lawsuit Fleer acknowledged that did owe some amount of restitution but urged that disgorgement of its profits was unreasonable.   

While the Delaware case was pending, Topps filed a separate lawsuit against Fleer in the Southern District of New York on March 29, 1983 seeking to recover all of Fleer’s profits for 1982 and 1983—along with $3 million in punitive damages—claiming that Fleer’s team logo sticker was a “sham product.” This lawsuit was settled confidentially in 1985, with Fleer given consent to “continue with the baseball cards and team logo stickers, as before.”

Back in Delaware, Fleer filed a motion asking the chancery court to declare that Topps was not entitled to recover Fleer’s profits “because those profits were earned under the protection of a court order and not as the result of any illegal infringement of Topps’ exclusive contract or licensing rights.” The court denied Fleer’s motion, finding that even though Fleer had legally marketed its 1981 cards in accordance with the Pennsylvania district court’s order—once the decree was reversed by the appellate court, it was as though Fleer had infringed on Topps’ exclusive rights all along.

In 1988, the Delaware Supreme Court affirmed the lower court’s ruling that Fleer had issued cards in 1981 under a wrongfully issued injunction and were responsible to reimburse Topps damages equal to the “net profits received by Fleer arising out of Fleer’s use of Topps’ previously exclusive license agreements.” The matter was returned to the lower court for an accounting. It is unclear how the chancery case ultimately resolved, but it seems likely that the parties reached confidential settlement. (No newspaper articles reporting on the resolution of the case have been located and no information is available remotely from the court.)

1988 Topps Jose Cruz (#278), 1988 Fleer Edgar Martinez (#378), 1988 Gregg Jefferies (#657), 1988 Sportflics Wade Boggs (#50), 1988 Score Bo Jackson (#180)

Otherwise, the MLBPA began preparing in 1988 for a potential work stoppage in 1990 when the collective bargaining agreement with MLB expired. At the time, baseball card royalties paid into the MLBPA garnered each player roughly $18,000 per year in additional income (approximately $43,000 today). The MLBPA used those royalty payments (only $5000 of the $18,000 total was distributed to the players) to fund a war chest, which proved a savvy move when the owners implemented a 32-day lockout that delayed the start of the 1990 season.

Also in 1988, newcomer Score joined Topps, Fleer, Donruss, and Sportflics (who began producing sets in 1986) as a major set manufacturer. Deep in the throes of the junk wax era, Dr. James Beckett expected some five billion cards would be manufactured in 1988. Predictably, more industry players would mean more fighting.

To be continued…

Sources/Notes:

Websites

www.baseball-reference.com

www.retrosheet.com[JS27] [JR28] 

www.tcdb.com

www.mlbplayers.com

Cases

  • In re Topps Chewing Gum, Inc. 67 F.T.C. 744 (1965).
  • Flood v. Kuhn, 407 U.S. 258 (1972). In January 1970, Curt Flood filed a lawsuit in the Southern District of New York against the Commissioner of Baseball (Bowie Kuhn), the presidents of the two major leagues (Joe Cronin and Chub Feeney), and the 24 major league clubs after he refused an October 1969 trade from the St. Louis Cardinals to the Philadelphia Phillies. Flood’s complaint alleged violations of federal antitrust laws, civil rights statutes, and the imposition of a form of peonage and involuntary servitude contrary to the Thirteenth Amendment, which had abolished slavery. Flood refused to report to the Phillies in 1970, despite a $100,000 salary offer, and sat out for the season. He appeared in 13 games for the Washington Senators in 1971 but left the club, and organized baseball, for good on April 27 unsatisfied with his performance. On June 19, 1972, the United States Supreme Court issued its opinion in the Flood v. Kuhn matter, holding that, in accordance with Federal Base Ball (1922), the business of baseball—including the reserve clause—was exempt from antitrust laws. No other business (i.e., vaudeville, professional boxing, National Football League) that had sought antitrust exemption in reliance on Federal Baseball had been successful. Accordingly, MLB had (has) the only legally sanctioned monopoly in the United States. Despite candidly admitting that “professional baseball is a business and it is engaged in interstate commerce,” a majority of the Supreme Court ruled against Flood, imploring any change to the law be had “by legislation and not by court decision.” 
  • Fleer Corp. v. Topps Chewing Gum, Inc., 415 F.Supp. 176 (E.D. Pa. 1976).  With regard to the FTC matter, “Fleer’s representatives were star witnesses and, in proportion, carried the burden of making the record in this proceeding. They were in constant attendance throughout the hearing. . . In retrospect, much of the struggle for contracts with ballplayers seems to be Fleer’s private struggle with Topps . . .The Hearing Examiner is, however, of the opinion that the delegation of the Commission’s ‘adjudicative fact-finding functions’ does not embrace a policy question going to the public interest.”
  • Fleer Corp. v. Topps Chewing Gum, Inc., 501 F.Supp. 485 (E.D. Pa. 1980). The only trading card product ever to outsell baseball cards was Wacky Packages in 1973-74. The court noted that the slab of gum weighed “4.30 grams” in 1978. Fleer had a net operating loss in 1978 and its net income (loss) was as follows: 1977—$346,621; 1976—$502,257; 1975—$720,274; 1974—($309,261); 1973—$382,354; 1972—$268,926; 1971—$148,494; 1970—($200,016). Roughly two thirds of baseball cards purchased are purchased by “heavy” buyers (i.e., those who purchase more than 200 cards per year.)  
  • Fleer Corp. v. Topps Chewing Gum, Inc., 658 F.2d 139 (3rd Cir. 1981). The number of players included in each licensing agreement varied. Some contracts, like those with Coca-Cola and Kellogg’s covered all the players, while others included “not less than 72, and not more than 300.”
  • Fleer Corp. v. Topps Chewing Gum, Inc., cert. denied, 455 U.S. 1019 (1982).
  • Topps Chewing Gum, Inc. v. Fleer Corp., 547 F.Supp. 102 (D. Del. 1982).
  • Topps Chewing Gum, Inc. v. Fleer Corp., 799 F.2d 851 (2nd Cir. 1986). Fleer’s contract with the MLBPA required that the production cost of the logo sticker had to be “not less than 15 percent of the production cost of the baseball cards in a package.” No evidence was presented to show the production costs for the team logo stickers.
  • Fleer Corp. v. Topps Chewing Gum, Inc. 539 A.2d 1060 (Del., 1988). “Restitution serves to ‘deprive the defendant of benefits that in equity and good conscience he ought not to keep, even though he may have received those benefits honestly in the first instance, and even though the plaintiff may have suffered no demonstrable losses.’”

Articles

  • “Mickey’s Bubbles Busted by Ol’ Case,” The Sporting News, September 23, 1953: 17. Mantle was redressed by Yankees manager Casey Stengel for having the audacity to blow a bubble while playing in the outfield.
  • Dick Young, “Young Ideas,” (New York) Daily News, December 2, 1967: C26.
  • Richard Wright, “Off-Season Paydirt for Pro Stars,” Detroit Free Press (Detroit, Michigan), December 8, 1968: 59.
  • “Lawyer Probed on Ballplayers’ Complaints,” Detroit Free Press, November 2, 1970: 30.
  • Don Lenhausen, “Lawyer Linked to Tigers Is Accused of Misconduct,” Detroit Free Press, December 17, 1970: 16.
  • “Bad Check Charge Lawyer Sentenced,” Detroit Free Press, July 28, 1971: 17.
  • “Competitor Sues Topps Over Players’ Pictures,” Wilkes-Barre (Pennsylvania) Times Leader, July 10, 1975: 4.
  • “Gum Firm to Pop Rival’s Bubble,” Detroit Free Press, July 10, 1975: 25.
  • “The battle of the baseball cards,” The Record (Hackensack, New Jersey), March 10, 1976: 62.
  • Mike Aronstein, “The Great Card War,” Collectors Quarterly, Summer 1976.
  • “The Topps-sponsored Bubble Gum Blowing Championships of 1975,” The Tampa Tribune, September 5, 1976: 118. In 1976, Topps issued a card honoring Milwaukee Brewers infielder Kurt Bevacqua as the “Joe Garagiola/Bazooka Bubble Gum Blowing Champ.” The win netted Bevacqua a first prize of $1000 ($5200 today) for his 18¼” bubble. Phillies catcher Johnny Oates was second with a 14½” bubble that won him $500. 
  • Andy Lindstrom, “Kids still trade their baseball heroes,” News-Pilot (San Pedro, California), September 10, 1976: 11.
  • Michelle Mitkowski, “Baseball Card Collectors Have Field Day at Show,” Daily Record (Morristown, New Jersey), January 12, 1981: 19.
  • Paul Marose, “Just like runs and cards, errors part of the game,” The Dispatch (Moline, Illinois), June 7, 1981: 13-14.
  • “Bubble gum game goes into extra innings,” Baltimore Sun, June 1982: 38.”
  • “No Hits, Runs, Errors Yet in Chewing Gum Lawsuit,” Scranton Times-Tribune, March 30, 1983: 11.
  • “Topps gum firm agrees to buy-out,” Philadelphia Inquirer, November 17, 1983: 121.
  • “Gumming up the works,” Santa Fe New Mexican, April 8, 1985: 11.
  • “Investment in Baseball Cards is Topps,” Record-Journal (Meriden, Connecticut), April 18, 1988: 14.
  • Claire Smith, “Players saving for strike in ’90,” Hartford Courant, June 18, 1988: 191, 194.
  • Frank Litsky, “Frank Scott, 80, Baseball’s First Player Agent,” New York Times, June 30, 1998: Section B, Page 9.
  • Mark Armour, “The 1967-68 Player Boycott of Topps,” SABR Baseball Cards Committee Blog,  https://sabrbaseballcards.blog/2017/01/03/the-1967-68-player-boycott-of-topps/, January 3, 2017.
  • Michael Haupert, “Marvin Miller and the Birth of the MLBPA,” Baseball Research Journal, Spring 2017.

Interview

Mike Aronstein, telephone interview with author, March 10, 2022.

Miscellaneous Notes

  • The players’ first choice for Executive Director was Milwaukee County Judge Robert Cannon, who turned down the offer because his request to place the MLBPA office in Milwaukee or Chicago was refused and the association would not guarantee him a pension equal to what he would have received as a county judge.  Cannon was later instrumental in moving the Seattle Pilots franchise to Milwaukee. The licensing deal with Coca-Cola was $60,000 per year for two years and was instrumental in securing funding needed to keep the MLBPA solvent until dues were first collected in May 1967. Topps agreed to pay an 8% royalty on the first $4 million in sales and 10% thereafter.
  • The MLBPA group licensing program applies to any company seeking to use the names or likenesses of more than two Major League Baseball players in connection with a commercial product, product line or promotion must sign a licensing agreement with the MLBPA. The license grants the use of the players’ names and/or likenesses only and not the use of any MLB team logos or marks.
  • Presumably a deal was reached between Topps and Major League Properties considering team logos appear in every set of the 1960s, but the terms of this deal have eluded the author.
  • The author has been unable to identify any products marketed under the name “Sports Promotions, Inc.” although this appears to be a company linked to Livonia, Michigan attorney Edward P. May, who along with Tigers pitcher Joe Sparma sold Tiger player caricatures in 1968 and had attempted to “merchandise bubblegum cards on a nationwide basis.”   May had represented Al Kaline, who complained to the Wayne County prosecutor’s office that May had defrauded him out of $14,000 tied to a health club named for the slugger.  Denny McLain complained he lost $100,000 on an ill-fated paint company venture May arranged. The MLBPA complained May had not paid royalties on baseball cards sold and accused him of forging the signature of a printing company executive on a document that guaranteed those royalties. In 1971, May was placed on three years’ probation for writing bad checks and suspended indefinitely from practicing law in Michigan.
  • Before 1981, Topps had only included stolen base statistics on the backs of its 1971 cards.

Special Thanks

Special thanks to Jason Schwartz for reviewing this article and offering several helpful suggestions.

Author: John Racanelli

John is a Chicago lawyer with an insatiable interest in baseball-related litigation. When not rooting for his beloved Cubs (or working), he is probably reading a baseball book or blog, planning his next baseball trip, or enjoying downtime with his wife and family. He is probably the world’s foremost photographer of triple peanuts found at ballgames and likes to think he has one of the most complete collections of vintage handheld electronic baseball games known to exist. John is a member of the Emil Rothe (Chicago) SABR Chapter and Co-Chair of the SABR Baseball Landmarks Research Committee.

13 thoughts on “Death and Taxes and Baseball Card Litigation [Part II, 1965-1988]”

    1. At the time General Foods was including baseball cards on its packages of Post Cereal (1961 to 1963) and Jell-O (1962 to 1963), Topps’ contracts with the players gave Topps the right to use the photos on baseball cards sold “alone or with gum, candy, or confections.” Accordingly, Topps could not object to the cards on the boxes because those were being sold with cereal or gelatin.

      However, Topps took issue with the Post Cereal promotion that offered a sheet of ten cards (not attached to a cereal box) for two box tops and ten cents, alleging this was an infringement on its right to sell cards “alone.” Topps subsequently entered into agreement that Post would pay a license and royalty fees in connection with its distribution of cards alone under the offer.

      Liked by 1 person

  1. Fascinating article – can’t wait for the next one! Love the Mickey Mantle newspaper clip. And who knew that “The only trading card product ever to outsell baseball cards was Wacky Packages in 1973-74.” I remember those things, but mine are long gone.

    Liked by 1 person

  2. A nice definative history of what happened in the baseball card hobby we have always wondered about. Cannot wait wait for more.

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  3. Terrific article.

    It seems to me that Fleer turning down Marvin Miller in 1968 was likely the worst decision in the history of the baseball card industry. Yes, Fleer would have had to wait years to see the benefits, but by 1975 they would have had the field all to themselves, just in time for the hobby to start taking off. Topps likely would never have been able to get a ruling against them, if they even tried (they’d be objecting to an exclusivity they themselves had enjoyed for more than a decade), and Fleer might well have kept the baseball card monopoly for a long, long time.

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    1. Fleer turning down that deal seems a little like Coca-Cola not buying out Pepsi-Cola when offered the chance.

      On the other hand, I quite liked the years when there wasn’t an exclusive producer of baseball cards, so if it turned out that Fleer accepting that deal meant the 1980s and 1990s were more monopoly years I think we would have lost out.

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  4. Wonderful article again, John!

    As for this, “The deal also permitted SSPC to produce cards of current players in sizes other than the standard 2½” x 3½” size, which led to SSPC’s creation of fully sanctioned 27-card uncut sheets that the Phillies and Yankees included in their 1978 yearbooks.”–I wonder whether Topps expected that result. Everyone I knew cut those sheets apart to have standard-sized sets of 27 cards. SSPC also issued 27-card uncut sheet sets for 8 other teams (Angels, Rangers, Dodgers, Red Sox, Reds, Royals, Cubs and White Sox), inserted in a magazine entitled “All Star Gallery” (one version for each team, but other than the sheet and the cover, all the same) that, when combined with the Phillies and Yankees sets, created a 270-card set for 1978. A lot of big names are there–Ted Williams, Nolan Ryan, George Brett, Mike Schmidt, Reggie Jackson, etc. The Yankees sheet/set was, I believe, in the yearbook, but the Phillies sheet/set was actually sold (for $1.50) separate from the yearbook, in a magazine available at the stadium entitled “Baseball the Phillies Way: Playing Tips from the Phildelphia (sic) Phillies.” It was a playing manual for kids, containing tips from the Phillies for each position, plus hitting, pitching, and baserunning. Two questions, if you know: Did Keith Olbermann write the card backs for the 1978 sets, and were those other teams’ 1978 sets sold at the stadiums like the Phillies and Yankees?

    By the way, I clerked for the Delaware Court of Chancery in 1998-99, and I wish I had known then about the Fleer case that was decided just 10 years earlier–I would have asked to look through the archives to read about it.

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