Buy Pete Rose, Trade Johnny Bench

By David Seideman/New York

Memo to anyone looking for an outlandish but sound investment: Consider baseball trading cards. Those childhood icons, small rectangles of pasteboard often sold with a slab of pink bubble gum, have become a fast-growing, multimillion-dollar business. Not only are treasured cards of the past fueling a growing resale market but new and fancy product lines are popping up like Texas League singles -- all at increasingly over-the-fence prices. Powered by nostalgia and the consumer purchasing clout of the mid-'80s, the colorful collectibles are enjoying the kind of popularity normally reserved for the national pastime itself. Says Frank Barning, editor of a San Diego trade publication called Baseball Hobby News: "Everyone loves baseball and making money. It's so mom and apple pie."

In the past two years the sale of baseball cards has roughly doubled in the U.S., to about $100 million. The total is expected to climb again this year, to more than $120 million. Meantime, the market for old and rare trading cards has risen in tandem with that for new material, to an estimated $45 million. As literally hundreds of dealers crowd into the market, slick trade papers and magazines plot the fortunes of card assets, based on players' performances and popularity, by means of elaborate graphs and charts similar to the Dow Jones average of 30 industrial stocks. Says Harvey Brandwein, a Manhattan dealer: "The stuff people are paying for quality material has skyrocketed and keeps going straight up."

All of that is cheery news for the small handful of firms that dominate the gum-and-trading-card business, led by Brooklyn-based Topps Chewing Gum. When Topps went public in April with an offering of nearly a third of its 14.5 million shares, the firm's prospectus showed revenues generated primarily from baseball cards soaring from $30 million in fiscal 1986 to $59 million in 1987. Topps' factories are operating 24 hours a day at full capacity to satisfy demand. Two other industry leaders, Philadelphia's Fleer and Memphis' Donruss, have enjoyed growth comparable to Topps during the past two years, and share about $30 million in sales between them. Says Fleer President Don Peck: , "We've had our best year ever." Meantime, a fourth rival, Major League Marketing of Stamford, Conn., creators of Sportflics cards, boasts of a sales surge of at least 50% in the past year, reportedly bringing revenues above $10 million.

The driving force behind that business is the same as it has always been: youngsters in search of heroes. The main consumers of the cheaper cards are six- to twelve-year-olds, with a smattering of older fans. To capitalize on their voracious appetites, the top three manufacturing concerns still sell a basic candy-store staple: 40 cents packs of 15 or 17 cards with gum, stickers or other bonuses. All the companies appeal to better-heeled and older baseball nuts. Topps, for one, markets more than a dozen specialty issues, including bronze and silver replicas, through hobby dealers. The company's deluxe "Tiffany" set of glossy cards on heavily coated paper stock in serially numbered boxes sells for $125.95. Similarly, Fleer has gone upscale with its Commemorative Collectors Edition, encased in elegant gold-lacquered tin and extolled for its "meticulous detail and masterful craftsmanship" (up to $129.95). "There's no end in sight to all the different sets," says Allan Kaye, editor of Baseball Card News, a trade paper. The most novel selling approach may come from Major League Marketing. Its staple issue, Sportflics, features a polarized image process with three sequential action shots of a player on each card. A pack of three cards retails for 59 cents. Crows company President Daniel Shedrick: "Baseball cards were in the horse-and-buggy age until our product."

As usual when a flood of newly minted goods hits the market, rarities of yesteryear have become more valuable. So-called rookie cards marking the first appearance of such stars as the Cincinnati Reds' Pete Rose, for example, have jumped tenfold in price over the past five years. A Rose card is now worth as much as $450. On the other hand, images of New York Mets Pitcher Dwight Gooden have fared poorly. Gooden's recent drug disability has sent his 1984 Fleer rookie card crashing in value from $120 to $70 in a matter of weeks.

The most antique rarity of all may be an image of Pittsburgh Pirate Shortstop Honus Wagner, issued around 1910. About two dozen copies are known to exist. The king of baseball-card collectors, Larry Fritsch of Stevens Point, Wis., who claims to have more than 1 million cards stashed away, bought his Wagner for $1,300 in 1974. According to price guides, the same card would fetch $35,000 today.

No line of business is complete without a convention, and baseball cards have plenty. At one of the 65 trading shows held on a single recent weekend, some 400 hobbyists lined up in New York University's spacious Greenwich Village student center to pay $7 apiece for personalized autographs from New York Mets stars. (For a day of such work, past and present baseball stars can earn anywhere from $5,000 to $10,000.)

Between tables laden with cards, pennants and other baseball memorabilia, Greg Siegel, 14, clutched a prized possession, Catcher Johnny Bench's Topps rookie card. Greg has set aside what he calls a "baseball card account" for wheeling and dealing. After two years, he has parlayed a nest egg of $700 into slightly more than $1,000. Says he: "I think it may be better than even the stock market." And, without a doubt, considerably more fun.