VOLUME 2, NUMBER 159
HOT*BUTTON*STORY
(TOY RECALLS HAVE MATTEL WISHING FOR THE GOOD OLD DAYS!!!)
** PROXY FIRMS LINE UP AGAINST TOPPS
** NEW MEMORABILIA INNOVATION LOOKS GOOD
** MATTEL CEO TESTIFIES BEFORE CONGRESS
** ANOTHER FRAUD SUIT AGAINST EBAY
** ETOPPS SIGNS REGGIE BUSH
** NEW LICENSING GETS CHAOTIC 4KIDS
** SIRIUS RADIO GETS SERIOUS ABOUT COLLECTING
DETAILS ON THESE STORIES AND MORE IN TODAY'S TBR: THE BRILL REPORT...
EDITORIAL COMMENT: RECALLS COULD RUIN CHRISTMAS
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(TWO MORE FIRMS OPINION TOPPS/EISNER DEAL; ONE FOR & ONE AGAINST)
One proxy firm is standing by it's former stance while another is coming down on the side of Topps management in the deal to sell the baseball card maker to a group led by Michael Eisner. Egan-Jones Proxy Service says the deal to sell to Eisner is a good one and is the lone proxy consultant company to back the sale with three others saying to vote no.
"The merger consideration is all cash which provides certainty of value to stockholders," Egan-Jones stated in it's release. "The $9.75 per share cash offer is 13.1 times Topps EBITDA for fiscal 2007 which is good value for stockholders ... and it is the only real offer received as a result of an extensive and thorough value-maximization process that started two years ago."
(Less than seven days for stockholders to decide the fate of the grand daddy of all card makers.)
The deal is the only one on the table now that Upper Deck backed out after feeling rebuffed at $10.75 per share. Topps failed to provide the information UD wanted saying UD was not serious and just wanted to gather all the inside information on contracts and distribution it could before bailing out anyway.
Dissident stockholders are pushing hard to kill the deal and three proxy consulting firms say they are right. Glass, Lewis Proxy and Proxy Governance joined Institutional Shareholders Services in saying the deal is not good enough to vote for. Then this week ISS re-affirmed it's stance on the deal.
"We note Topps currently is trading approximately at the midpoint of its trading range for the past five years," said ISS. "While recognizing the challenges the company faces, we believe the Tornante offer does not offer compelling value in light of the past and potential improvement in the company's operations."
Topps was obviously disappointed in the re-affirmation by ISS.
"It is unfortunate that ISS, having witnessed the withdraw of the tender offers by Upper Deck, did not take this opportunity to make the right recommendation to it's clients that the $9.75 per share cash offer represents certain and good value for all Topps stockholders," Topps shot back. "Combined with the perplexing withdraw of Upper Deck and current credit market turmoil, Topps shareholders should not expect a higher offer in the near term."
Meanwhile another fund operator spoke about the issue on TheStreet. Thomas Kirchner is portfolio manager of the Pennsylvania Avenue Event Driven Fund. He was on The Street TV talking about mergers and the recent changes in the market when asked about Topps and the proxy fight.
"Management knows that if Eisner buys them they will keep their jobs but if Upper Deck bought them they would lose their jobs," said Kirchner. "I hope management will lose and the company remains public because I believe in the end the overall value of the company will be more than what they will get in the merger."
The vote to decide the issue is less than a week away with stockholders to cast votes September 19. A vote to kill the deal will also likely be a vote to replace the old Topps board with new dissident members, and this would very likely lead to key executives losing their jobs as well.
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(MEMOTHENTICS MOST RECENT NEW COLLECTIBLE WITH A FLAIR)
Kelly Johns and his pals have come up with a truly unique collectible with a twist. Memothentic features memorabilia and photos of a specific moment in sports history. Not unusual by any means but the twist is also framed with the items is a personal letter from the player detailing the sports moment with their own thoughts.
(Memothentic Joe Montana signed item.)
"We tried to create something with some real memories in it, that told a story, sort of like having NFL Films on your wall," Johns, CEO of Memothentics, told The Brill Report in an exclusive interview. "We sent Joe Montana a bunch of pictures of the moment, he picks the one he wants and writes what he was thinking about at the time."
There are signed and unsigned versions of the "memo's" which range in price from about $150 to $350 on a retail level. A signed Joe Montana version for instance retails for $347 while the unsigned version is $147. Among the players already signed to participate are Montana, Barry Sanders and Jerry Rice to name a few.
(Jerry Rice is a popular seller as well.)
The company hopes to get a large number of these in larger chain stores such as Wal-Mart and Target as well as hobby stores. Johns has sent his crew to Costco Stores around the country as sort of a road show to sell the Memothentics and reception has been good.
"Consumers loved it and they like the fact it is all in one piece, everything is together but the biggest thing is they love the written story; to read what Jerry or Joe were thinking at the time really sets it off," said Johns. "We didn't just go after the marquee names either, we went after other players who had great moments such as Rod Martin with three touchdowns in the Super Bowl."
Johns said an item such as this appeals to Raider fans and while they won't find Martin in most collections they are happy to get him in this type of collectible.
The company has signed nearly 25 athletes with more on the way. It is to the point where athletes are approaching the company to be in the series because they like the product so much. Johns secured a license from USC and will release items based on Trojan greats, including a Heisman Series. He's working with other schools as well. Johns hopes to have a complete college series for the holidays.
The items are limited to 1825 in the larger versions and much less in other series. For dealers the time is short to get in on the 50-percent off pricing.
"That will likely change soon as we are getting ready to make some big deals for the mass market and we are taking it to the next level because dealer response has been 'wait and see,'" said Johns. "One thing we don't allow is for sellers to put the items on eBay at below Suggested Retail Price because we are already giving them something at a great price, there is no need to undercut the SRP."
He said aside from doing something which has never been done before he wants to keep it affordable and the current price structure is just that.
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(MATTEL TELLS CONGRESS IT WILL BETTER POLICE CHINESE PRODUCTS)
The CEO of Mattel told congressional leaders his company is taking steps to protect American consumers from Chinese toy makers who put elements in toys which made them dangerous to children. Robert Eckert told a congressional panel looking into the massive recalls of toys made in China, the company is doing several things to ensure child safety.
(Mattel saw Barbie accessories at the heart of one recall.)
He said it appears contractors and sub-contractors "deliberately avoided doing what they knew they were required to do," and an investigation continues into these contractors. Mattel already cut ties with several of them.
Among the changes going into effect; suppliers must now have a dedicated area to store approved paints, and sub-contractors can no longer sub out work to other sub-contractors from now on. Lead in paint has been the main culprit in the recall.
An official at Toys R Us said he would not be surprised to see more recalls of toys from China in the not too distant future.
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(MORE SUITS FILED AGAINST EBAY IN EUROPE)
L'Oreal, the fragrance firm is suing eBay in five European countries over counterfeit fragrances sold on the auction web site. L'Oreal joins Louis Vuitton, Dion Couture and others in taking legal action against eBay for counterfeit goods.
"L'Oreal has been facing an increasing volume of illicit trade in fake fragrances and fake cosmetic products on some on-line auction sites," said L'Oreal in a statement.
(Over 2000 items currently list on eBay under the L'Oreal brand name but few perfumes.)
The company cited an increasing number of fragrances sold by unauthorized dealers and the suits take place in Germany, France, Belgium, Britain and Spain. Ebay was not happy about the deal since the two sides had been talking.
"We are truly disappointed," said an eBay spokesperson.
Hobby dealers have been after eBay for a long time to stop the sale of counterfeit goods on the web site. Rather than slowing down the activity has been increasing according to eBay watchdog Christopher Williams who has a web site dedicated to stopping illegal activity on eBay and other sites.
He's also seen an increase in the number of non-sports autographs and sent emails like this one to eBay's fraud department.
"Okay this is the third autographed guitar which has failed Quick Opinion (eBay's own security system offered to those questioning the authenticity of an item) in the last 72 hours. I do believe by now I have proven that he is selling forgeries. Please remove all of this seller's autographed entertainment items. Thank you."
The FBI notes the entertainment field is more rampant with bad signatures than the sports field. Williams says threats against him have also been increasing.
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(ETOPPS REGGIE BUSH AUTOGRAPHS $129)
Reggie Bush is the latest to ink a contract to sign 100 of his eTopps cards. Collectors who have Bush in their on-line portfolio can have Bush sign the cards for $129. There will be only 100 offered.
(Reggie Bush eTopps card.)
As always the card must be in your portfolio already and the race begins Wednesday, September 19. Meanwhile hot rookie Adrian Peterson is being offered by eTopps this week.
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(4KIDS LICENSES CHAOTIC TO JETIX)
The game, Chaotic from 4KIDS Entertainment is doing very well in the marketplace and should really pick up now the company signed a TV licensing deal with Jetix. Already on the Fox network in the 4KIDS Block the new cable deal means more exposure.
"We are extremely delighted to forge this important relationship with Jetix that will ensure significant added broadcast coverage in the United States for the Chaotic animated series," said Brian Lacey, executive VP for the international division of 4KIDS. "We are confident the series will develop a strong and loyal kid audience with Jetix in the States as well as Latin America."
(4KIDS betting on bigger things from Chaotic.)
Chaotic will continue to air on Fox as well as internationally. It already appears in English language in Canada with a French language version expected soon. The Jetix version airs starting in October.
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(SIRIUS RADIO ADDS TWO COLLECTIBLES SHOWS TO ALL SPORTS PROGRAMMING)
Brandon Steiner will host a sports collectibles show every Monday from 1-3 p.m. eastern time on the new Sirius all sports satellite radio network. The show will have a heavy emphasis on memorabilia. Steiner is the head of Steiner Sports collectibles.
The other show on channel 123 will be the Collector Speaks on Saturday mornings from 8-9 a.m.
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(SPIDERMAN AND RITZ A PERFECT PAIR, TIMES THREE)
Collectors who are into Spiderman cards are all over the latest Ritz Bitz crackers selling for about $4 at the local grocery store. The lenticular or magic motion style cards feature one of three scenes involving the web slinger.
The cards are selling for a few dollars on eBay but can be purchased at the store with the crackers still inside the box. The box features the card tucked inside but visible so it's easy to get all three cards.
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(THE BRILL REPORT JOINS THE DOCTOR)
The past week TBR and Doctor Wax Battle of the BackStop in Tom's River, NJ, decided to join forces to present The Brill Report on Doctor Wax Battle's "Live" show each Wednesday. Bob Brill, publisher of TBR, will join the Doc and his crew shortly after 7 p.m. Eastern Time for a preview of what's coming up in the Thursday edition of The Brill Report.
Join Bob, the Doc, Jersey John, Fast Eddie and the rest of the Jersey crew down at the shore. There is a link on the left hand side of the page or click on www.thebackstop.net.
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