GAAP Year

I've been going over some previously trod ground with a keener eye of late when it comes to Bowman and its various corporate reshufflings from 1951-56, much of it involving John Connelly, who assumed control then sold the company in fairly short order. One thing that I noticed doing this was the low figure offered by Bowman for its 1953 baseball card sales, which are described in some of their legal proceedings against Topps.  Bowman's overall sales and those of their "baseball gum" look like they would have peaked in 1951 at $3,050,000 and $973,000 respectively (no prior figures are available but it makes sense given the large size of the 1951 set vs. 1950).  There were probably some vending and cello sales as well but I doubt they approached even 5% of the baseball card sales figures overall.

In 1952, no doubt affected by the new Giant Size Baseball cards issued by Topps, sales trended down a little at $2,750,000 overall and $731,000 in respect of baseball gum.  The decline in overall sales was $300,000 which seems almost entirely driven by their baseball cards dropping off by $242,000.  Then in 1953 the bottom blew out with a thud.  $2,140,000 in overall sales reflected only $301,000 worth of baseball product. The $610,000 drop in sales year over year is massive, almost 25%!  Baseball gum was down $430,000 all on its own, so 70% of the loss in 1953 was related to that specific category. 

It seems odd and the Bowman color cards were gorgeous of course, so why didn't they sell?

(courtesy Robert Edward Auctions)

Well, I'm not sure they were marketed as they should have been. As it turned out, Bowman's parent company, Haelan Laboratories, mentioned in their annual report, which slightly refined some of the numbers from their lawsuit, that they lost $116,440 in 1952 due to "necessary and realistic adjustments preparatory to our entrance into newer and more profitable fields... inventory write-downs were substantial." The profit in 1952, despite better sales all around, was only $22,000, so there were two consecutive years of considerable "meh" going on for sure. 

Cash flow woes may certainly have played a part in all of this since a write down occurs when your inventory drops below its book value.  It seems to me then (and I am very much not a person who understands Generally Accepted Accounting Principles that well) that they couldn't sell their 1953 cards and the problem had a knock on effect throughout all their lines and businesses in 1953.  Some of that may have been due to almost 30 percent of their baseball product being issued in black and white. I don't have the actual report, only a small excerpt, but assuming the write down represents what they could have sold at wholesale (58 to 60% of the retail price if they operated like Topps) and using the overall write down of $116,440, that projects to around $80,000 or so of unsold baseball gum inventory. And I'd say that's the minimum possible loss given the sales drop off for the baseball cards..

So that's something like 125,000 boxes of cards (over 5,000 cases, assuming five cent packs) that never sold and was probably the best case scenario. But it doesn't explain the enormity of their overall loss - remember the provided figures were representative of sales, not profits - or the loss on baseball gum in '53 and it's strange for sure. It may also explain how John Connelly (see last week's post) managed to get on the Haelan Laboratories board as it seems his business success was at least partially linked to theirs, especially in light of his plant burning down in January 1953. Maybe Bowman could not source enough shipping cartons, even as Connelly got his plant back up to speed?

What I'm not seeing in any of these numbers how this inventory boondoggle is related to the oft-repeated story that production expenses manufacturing the color cards drove Bowman's demise, unless those losses extended to royalty payments. But there were certainly other issues going on that went well beyond their trading card lines. In fact, I think it bolsters my theory that they dropped the color cards in order to avoid paying royalties to Joe DiMaggio, their spokesman for the color set, shown on this five cent wrapper over at Wax Pack Gods:

Joltin' Joe was on the color display box too and there were also ads featuring him:

(courtesy Robert Edward Auctions)

Compare these to the Black & White set's livery on this one cent pack:

The wrapper is more colorful than both the color version's wrapper and also the cards within! As is the box:

(courtesy Robert Edward Auctions)

If Joe. D was promised royalties based upon sales and Bowman was having financial problems, it sure makes sense to they would have made the switch. It also suggests that John Connelly was able to impose some degree of influence as he was a master belt-tightener in times of turmoil but I need to dig into that a bit more to be sure. I have to think the young purchasers of Play Ball, a brand last used by predecessor company Gum Inc. in 1942, did not in the least like getting black and white cards after Bowman took their Kodachrome away.

Bowman sales did bounce back quite a bit in 1954, overall they were at $2,480,000 that year and baseball gum amounted to $602,000 of that.  I can't find sales figures for baseball gum in 1955, presumably due to the Topps buyout rendering the need for them to be provided to the court moot, but a short blurb in a contemporary financial publication indicates overall Haelan Laboratories sales were was about the same as in 1954. Haelan seems like they were rebounding quite nicely from their 1953 nadir, certainly they were not reeling in the face of competition from Topps but John Connelly was already making plans to sell Bowman off as 1955 ended and bubble gum cards were not his area of expertise and interest. He needed cash to relaize his ambitions and selling Bowman to Topps certainly gave him a lot of that.

Flame On! And On!

I've touched upon Philadelphia businessman John Connelly here previously and have been looking into his background in deeper detail as I slowly work on the second edition of my 2013 guide to the early days of Topps. I've got an almost ridiculous amount of updates and corrections to make to the book and work continues slowly apace. But I digress.

To refresh your collective memories, Connelly Containers produced the corrugated cardboard shipping cartons used by Bowman (essentially renamed Haelan Laboratories in 1952 with the old brand names retained). It's possible they produced their retail box flats as well but I've not been able to corroborate that yet.  In connection with this, BFF o'the Archive Jeff Shepherd passed along, a long, long time ago, a piece (recently rediscovered by moi) from the March 23, 1953 issue of Life magazine and indicated Connelly was about to join the Haelan board when the article came out but I've got it in my head (and book) that he did so in 1952. I need to do more research obviously, despite the dates being relatively close, but no matter for the purposes of today's post.

Early in the morning of January 24, 1953, a watchman noted a fire burning at the brand new, and still not-quite-finished Connelly Containers plant, located between 51st and 53rd Streets at Botanic Avenue in the heart of a greater-Philadelphia industrial neighborhood.  The blaze quickly engulfed the two blocks long building - no surprise given all the paper pulp and cardboard stored there - then spread to several adjacent business (including a Firestone tire factory).  Thanks to a stiff wind blowing in from the Schuylkill River that day, the fire quickly jumped some railroad tracks and engulfed four tank cars, getting perilously close to a fuel depot after an explosion took down a firewall and almost lit up a nearby ammo dump (!).  News reports described a "spectacular" fire that took took hours to get under control.  Amid suspicions of arson the FBI was called in due to Connelly doing some production work under a government contract but it ultimately turned out a vapor leak from the fuel depot had sparked the fire. It seems that absent the massive firefighter response (it was an 8 alarm fire) the entire lower part of the heavily industrialized neighborhood would have been consumed.

A huge rainstorm hit the area just after the fire was controlled (bad timing, that) and made a quagmire out of the now former factory and environs. According to several news reports, the only thing saved was a picture of Connelly's wife (I think a massive PR spin happened here!) but later that day he had already set up a temporary headquarters across the river at a local hotel and was receiving offers from heavy equipment manufacturers for replacement machinery.  Local competitors allowed already their ordered machinery to be diverted and also manufactured cartons for Connelly as he regrouped. The "all hands" response was inspiring but perhaps no surprise given John Connelly's philanthropic efforts and community support in the city over the years.

Here's some pictures of the carnage:

Despite all the water from fighting the fire and the storm that hit later, there were still smoldering pockets scattered throughout the area that required an around the clock fire watch for weeks-yikes! Damages to Connelly's plant and equipment were ultimately determined to be $3,000,000.

John Connelly, unhesitatingly, quickly bought an old Carnegie Steel plant, known locally as the Pencoyd Iron Works, at the foot of Righters Ferry Road for $500,000, several miles north of the old location. Quite impressively, it was up and running on March 3rd, less than two months after the fire.  Connelly though, wasn't to stay there long.  Following his acquisition of Haelan Laboratories in 1955 he moved his company from the Pencoyd works, heading further north to Bala Cynwyd, a suburb of Philadelphia and all the remaining Bowman and Haelan Labs manufacturing and packaging equipment soon followed from their old Stenton Avenue factory. 

Bowman's plant was only a mile or so away from Bala Cynwyd but the move had a lot more to it than convenience. Connelly had big plans and some Haelan products aligned with his larger vision that resulted in him ultimately taking over Crown Cork & Seal (now Crown Holdings). Prior to this he sold Bowman's remains to Topps in early 1956 while retaining a good chunk of Haelan Labs and making several interesting and inter-related business moves. He sure seems like he was a titan of industry, old school division.

As for the Pencoyd Iron Works, it is no longer old school and looks pretty swank now-check it out!

Mantle-Pieces

It's looking like a pretty good year for Bowman ephemera, based upon a couple of unique and interesting bits that recently hit the auction block.

The first item to catch my attention was this shot of Joan Crosby (whozat? you ask) from June of 1953, offered by RMY Auctions:

To fill you in, Joan Crosby was one of the agents used by Bowman to secure players for their baseball cards; her territory covered the Northeast US, including Philadelphia and New York.  It turned out her inability to access the MLB clubhouses of the time provided a major opening for Sy Berger at Topps, who of course had access to players in the clubhouses and who was also the son-in-law of Jerome Karpf, Managing Editor of the New York Evening Post which, I am assuming, also helped.  

Ms. Crosby worked for an outfit called Art Flynn Associates, which also employed a fellow named Jack Tanzer who covered their more western territories. Berger of course, eventually hired a MLB scout by the name of Turk Karam to assist him in his signing efforts.

The copy on the reverse is Mad Men-esque:

For reasons I will get into momentarily, I don't believe she wrote card backs as that was, by all accounts I have read, the province of Bowman's art and ad agency run by George Moll.  Perhaps she worked for them at some point although I doubt it. Also dig the Woody Gelman red crayon at the upper right, likely referring to his filing system at Topps, which must have ended up with a trove of Bowman documentation post purchase.

If that wasn't enough, Heritage Auctions recently offered up Mickey Mantle's 1951 and 1955 Bowman contracts and a couple of other related items.  I suspect a collection of Bowman related ephemera is being dripped into the hobby, with the choicest pieces now appearing.

Herewith the Mick's agreement to be Bowman-ized:

That stamp on top means this document was a deposition entered into evidence in the original lawsuit Bowman filed against Topps, asserting the right to use the phrase "baseball" in selling bubble gum cards was solely Bowman's. I've got a cancelled check Bowman wrote out to Whitey Lockman in 1949 that also has the same stamp.

Turns out Mickey got some steak money four days earlier to start the process:

The 1956 end date is interesting, isn't it?  I wonder if a number of the early Bowman signees had contracts ending that year; it may help explain why Topps was able to buy Bowman out from John Connelly in February of that year if he didn't want to get into a low rent bidding war as he was preparing to greatly expand his other business, Crown Cork & Seal.

If there was any question as to who Mantle signed with, it was memorialized in this acknowledgement:

Topps prevailed in the original suit filed against them by Bowman but appeals and new suits emerged and in early 1953 a ruling came down asserting ballplayers (and everybody in the United States) had the right to control how their image and name was used by third parties. Ongoing legal actions seem to have dragged things out even further until, in the early days of 1955, this document was signed.

All of this gives more insight into a very important and interesting time in the early 50's for Topps and Bowman. Hopefully more Bowman documents leak out soon.

Philadelphia Storied

I've recently been able to close a loop concerning the sale of Bowman Gum to Topps in early 1956. When I was researching the Modern Hobby Guide a few years ago, it was a surprise to me that Warren Bowman had left his namesake company in May 1951 to develop real estate in Florida. The Board of Directors ultimately changed the name of the company to Haelan Laboratories a year later and by the end of 1952 a local Philadelphia businessman named John Connelly was added to the board, likely because he provided capital to the company. Here is the face of the man who sold Bowman to Topps:

You can see the Haelan branding on the back of this 1952 Pee Wee Reese:

This was contracted and initialized to B.G.H.L.I. by 1953:

I've covered most of the story in my book and in a Wrapper article a while back but a lucky break put a thread about a 1948 Blony (Bowman's flagship bubble gum brand) shipping carton in front of me the other day over at Network 54's Vintage Non-Sports Forum and with a quick response from Mike White, who owns the carton in question, I was able to get a scan of the bottom:

My research had previously found Connelly had a stint as vice president and sales manager during World War 2 at Container Corporation of America (CCA) before starting Connelly Containers.  I had always wondered how he stumbled onto Bowman and the connection with CCA certainly seems to answer that question. Connelly ultimately used his haul from the Bowman sale to gain control of Crown Cork & Seal in 1957, which made cans and bottle caps and made him a very wealthy man. When he stepped down in 1989 the company was worth almost $2 Billion dollars. He passed away in 1990 but his charitable foundation lives on to this day.

I also was able to find an article from this past January in a magazine called Mid Atlantic Thoroughbred about the Connelly family horse farm in New Jersey (still there) that dug into his background a little more as I was googling CCA, so all in all it was a pretty fortunate turn of events