Beanie Babies Go Bust with Ian Karmel and Brian Moller | 35

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Speaker 1 Francis and Harold Mountain just want their divorce over and done with.

Speaker 1 Four grueling months of bitter disputes, weeks of going back and forth about assets. They just have one issue they can't seem to settle.
Who gets the babies?

Speaker 1 No, not the children. The beanie babies.
It's 1999 and society has lost its collective mind over these pellet-stuffed toys.

Speaker 1 Francis and Harold have grown emotionally attached to their dozens of beanies worth somewhere between $2,000 and $5,000.

Speaker 1 Depending on the volatile collector's market, but you wouldn't understand.

Speaker 1 The divorce decree was simple. It said the ex-couple had to divide their collection equally.
And they can't.

Speaker 1 Francis has refused to cough them up. So Harold has filed a motion to get his share.
The Mountain family has made a mountain out of a pile of playthings.

Speaker 1 And Judge Gerald Hardcastle can hardly believe he's going to have to take the court's precious time to figure this out. They really need a bailiff and a guy in a robe in the room for this?

Speaker 4 Okay.

Speaker 1 Hardcastles ordered Frances to haul in all of the beanies, spread them out onto the dirty courtroom floor, and for her and Harold to squat down and each claim a beanie until no more remain.

Speaker 1 It's impossible to figure out which part of this is the most embarrassing, but at least now, if the beanies don't appreciate over time, their shame sure will.

Speaker 1 small understuffed plush bean bag dolls called beanie babies they sell for about six dollars you know if that retires that bare alone will cover the price of everything Ty Warner had to take the tie heart off of shipping boxes because they would assault UPS drivers i Incorporated announced that it's over.

Speaker 7 Beanie Babies are dead. Millennium, no more beanie babies.

Speaker 7 We

Speaker 7 are on

Speaker 7 a single king

Speaker 1 From Wondery and At Will Media, this is The Big Flop, where we chronicle the greatest flubs, fails, and blunders of all time.

Speaker 1 I'm your host, Misha Brown, social media superstar and always searching for weenie at Don't Cross a Gay Man. And today, we're talking about how the billion-dollar beanie bubble burst.

Speaker 1 On our show today, we have a comedian, a writer, a podcaster. He's the host of the amazing podcast, All Fantasy Everything.
It's Ian Carmel. Welcome to the show.

Speaker 2 Thank you, Mayisha. So happy to be here.

Speaker 1 We also have an actor, a writer, and comedian who you may know as B-Mo the Prince on TikTok.

Speaker 4 It's Brian Mahler. Welcome.
Well, hello. Thank you very much for having me.

Speaker 1 So I don't have to tell anybody here that the 90s were a golden age for kids, specifically kids' toys. I mean, there were Tamagotchis, Pogs, Power Rangers.

Speaker 1 I personally was a black market gigapet trader myself.

Speaker 4 Yes, gigapets.

Speaker 1 But there was only one that caused mass hysteria, financial blunders, robberies or robbies, if you're into the beanie baby slang, and shootings. Wow.

Speaker 1 Question: Did either of you get into beanie babies?

Speaker 2 My little sister, I watched her get like super into them, and she got them for everything, like good grades as a reward, bad grades because she was feeling bad about herself.

Speaker 2 Going to the dentist, you would get like beanie babies because you could get them. Like, they were fairly inexpensive, you know.

Speaker 2 And so, my mother would use them for like anything that popped up and she had them lined up all around her room, like a gallery piece, basically.

Speaker 4 So, I had a few, I didn't know it was like a phenomenon, and literally, maybe a year ago or two years ago, when we were clearing out my mom's old house where I grew up, we found a massive tub full of beanie babies.

Speaker 4 And I was like, oh, we're loaded. We're going to make so much.

Speaker 4 Guys, this is it. We've done it.

Speaker 3 We've cracked the code.

Speaker 4 But now it's still in my basement.

Speaker 1 Before we unbox how the world lost its collective mind over adorable, poseable stuffies, let's meet the beanie daddy.

Speaker 1 Ty Warner, now a mysterious, elusive billionaire, is born in 1944 to a homemaker and a jeweler-turned toy salesman in suburban Chicago. In college, Warner discovers his passion, acting.

Speaker 4 But he's not good.

Speaker 1 He's overly theatrical, unlike myself.

Speaker 1 One critic for the school paper writes that Warner's dramatic acting style is to be praised for his near and sometimes completely successful acting. And also, his voice was a bit tiring.

Speaker 2 My voice is kind of tiring over the course, would be over the course of an entire play. So I can actually sort of relate to him on that.

Speaker 2 My voice sounds like if a trumpet could be Jewish, so I totally get what that comes from.

Speaker 1 Alas, Warner's days as a college thespian are brief. He can no longer afford the tuition.
So he moves to Hollywood to be an actor.

Speaker 1 But after five years of busing tables and selling cameras and encyclopedias door to door to make ends meet, Warner still hasn't gotten his big break.

Speaker 1 So he returns to Chicago, where his dad helps him get a job with a stuffed animal company called Dakin Toys.

Speaker 1 Warner starts out as a sales representative for Dakin in Ohio, a role that actually suits him pretty well. It allows him to embrace his theatrical side.
What does that look like, you ask?

Speaker 1 Well, he arrives to sales meetings in a white Rolls-Royce wearing a top hat, fur coat, and a cane.

Speaker 1 So what would you think if a guy showed up looking like that to sell you stuffed animals?

Speaker 4 I'm definitely listening. Yeah.
I'm like, you know what? This story needs to be told. Whatever this is about to be, I need to know what it is.
This needs to be told.

Speaker 2 If Dakon Willy Wonka is rolling up to my house, I'm not shutting the door. He's like, please come in.

Speaker 2 I need to at least hear more of your backstory.

Speaker 1 I mean, apparently, though, the Royce and the look works. Warner knows full well that his eccentricity helps him sell toys.

Speaker 1 And as Dakin grows, Warner becomes their highest paid employee, even outearning the CEO.

Speaker 1 Warner then meets a woman named Catherine Zimmy. The two become professional partners and more.

Speaker 1 And according to Zimmi, they become life partners, although they never marry. And the importance of that will become clear a little later on.

Speaker 1 In 1980, after a full decade of being Dakin's top dog, a Dakin executive claims Warner gets fired and that he's been undercutting the company by selling his own knockoffs to Dakin's clients during his sales meetings.

Speaker 1 As you do. As one does.
And after that little whoopsie, Warner flees to Italy for three years to live La Dulce Vita. So while there, he comes across these lifelike toy cats and gets an idea.

Speaker 1 Warner starts envisioning his own version of the cats. They would look similar, but be understuffed with plastic pellets, giving them a floppy look.

Speaker 2 To his credit, there aren't a ton of great stuffed cats.

Speaker 4 No.

Speaker 2 Without understuffing it with pellets, it's hard to get that sort of floppy nature of a cat. Like a dog is rigid.

Speaker 2 You know, you can overstuff a dog, but a cat is all just like, it's like a pile of wet spaghetti. So he's onto something there, even if it's crazy.

Speaker 1 I mean, it also doesn't hurt that understuffing them makes them cheaper to produce, and he can sell them for less than other stuffed animals.

Speaker 1 So, with this idea, in 1986, Warner starts a company called Ty Inc. Ty Inc.
is a very small company at first, so what does Warner do?

Speaker 1 He dates his employees, of course, like Patricia Patty Roche, who helps Warner with trade shows.

Speaker 1 Terrible boundaries aside, Ty Inc. is on the toy scene and they introduced their first line of semi-stuffed toy cats.
At trade shows, Warner pretends to groom the stuffed cats.

Speaker 1 He blow dries them, even tweezes the hairs around their plastic eyes.

Speaker 1 But the crowd eats it up. And the cats are a huge hit.
At one trade show in Atlanta, Warner sells $30,000 worth of cats in one hour.

Speaker 1 What?

Speaker 4 Imagine being that easily impressed.

Speaker 4 What a life to live. Man.

Speaker 1 Things are going well. And in 1993, he debuts an offshoot of his floppy cats, miniature, slumpy, stuffies called beanie babies.

Speaker 1 There are only a handful of types, including Patty the platypus, who some claim was named after Warner's friend with benefits, Patricia Roche.

Speaker 2 Platypus is not what you want to be named after, by the way.

Speaker 4 That's the last one.

Speaker 4 Babe, don't worry, don't worry. I'm going to name one after you the platypus.

Speaker 4 That's not peak romance.

Speaker 1 So the beanie babies premiere at the World Toy Fair in New York City, and they're met with a big

Speaker 1 meh. Beanie babies don't really take off until Warner and company make two big innovations.
Do you have any idea what ends up setting beanie babies apart from other stuffed animals?

Speaker 2 Scarcity.

Speaker 1 Yes, Ian. That's exactly right.
So at a trade show in Atlanta, Warner overhears one of his sales reps say that a beanie has been, quote, retired instead of, quote, discontinued.

Speaker 4 Oh.

Speaker 1 Warner loves this language. If he frames less popular beanies this way, he can make it sound like they're a collector's item and give them this feeling of scarcity.

Speaker 4 Oh, I already feel cheated.

Speaker 1 Yeah, and Warner decides not to sell beanie babies at popular retailers like Walmart or Toys R Us. He favors small and independent businesses, especially gift shops.

Speaker 1 Like, where do you remember them being sold?

Speaker 4 I never saw one at any place of value. Like, it was always in like sneaky little boutique kind of spots.
The son of a gun. What a hustler.
Yeah.

Speaker 2 They always ended up having a big Thai heart sign like in their window to let you know that like, this is where you can get them.

Speaker 2 And then they also sold like little candles and like picture frames and greeting cards?

Speaker 4 Like maybe Hallmark? I don't know. Yeah, Hallmark.

Speaker 4 It was Hallmark.

Speaker 1 That's where my sister would always get them was at the Hallmark in the mall. Also, the stores that do sell them can only offer some of the beanie babies.

Speaker 1 So nobody can get the entire collection in one place. So when people spot a toy, they're not sure if they'll see it again.
Oh, man. That's savvy.
So, what do you think about this strategy?

Speaker 1 Would this work on you as a consumer?

Speaker 4 You know, I'd love to say no.

Speaker 4 I would love to say no, but I've seen how I act in a Target or anywhere with adult money. Like, Smash Cut to Me in My Living Room with my wife, like, babe, no, listen, they had three left.

Speaker 4 And this is the only place globally that it's sold. Think about the resale of it god

Speaker 1 that second idea comes from lena trevetti one of the company's first employees who was something of a computer whiz she pitches an idea to warner that is going to change everything

Speaker 1 brace yourself because it's a website

Speaker 4 yeah

Speaker 1 at the time In 1995, only about 14% of adults in the U.S. had access to the internet.
Sensing an opportunity, Lena takes about a week to build a Beanie Babies website.

Speaker 1 You could buy the toys directly off of the site, but it was more. It became a hub for fans and a treasure trove of extra intel.

Speaker 1 An online catalog of each of the different beanie babies, their birthdays, and news about upcoming releases was on this website.

Speaker 1 Some sources cite this as the first business to consumer sales site on the internet.

Speaker 1 According to Lena, many people bought their first computers just to use the website and figure out which beanie babies are available and where.

Speaker 4 Wild.

Speaker 1 Wow. Let's take a look at the early version of the site.

Speaker 4 I think my laptop got a virus just from looking at this. Like, this is wild.

Speaker 2 It's got Lisa Franke aesthetics to it. Yeah.

Speaker 4 In classic Comic Sans, which really

Speaker 4 gets you.

Speaker 2 How do we let people know we're having fun? There's six fonts currently, so let's go with that one.

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Speaker 1 It's Easter of 1995. With the help of Lena's site, the beanie babies craze is underway and sales start to skyrocket.
In fact, demand is so high around the holiday that Thai Inc.

Speaker 1 needs to import three 737s full of beanie babies from Korea.

Speaker 4 This is bananas. Stop.

Speaker 2 Are they in the seats, like seat belted and everything? Like, how do they transport them?

Speaker 4 First-class tickets, yeah. Have to be.
It'd be disrespectful for them to fly any other way. They're just flopped over.
Drink?

Speaker 2 No, no, nothing for you. Champagne? Water?

Speaker 4 No. Okay.

Speaker 1 By the end of the year, warehouses are receiving 15,000 orders daily.

Speaker 4 Wow.

Speaker 1 Thai Inc.'s estimated sales for the year are about 28 million. And what does anyone do once they get that kind of money?

Speaker 1 You trick out your house, which for Warner means another opportunity to mix business with pleasure.

Speaker 1 In the early 90s, Warner starts dating Faith McGowan, who's hired to design the lighting in Ty's new house.

Speaker 1 By the time the house is finished, Ty asks Faith and her two daughters to move in with him.

Speaker 4 Oh, and two daughters. Oof.
I know.

Speaker 1 Would it be cool if your mom started dating a rich eccentric toy maker?

Speaker 4 Yes.

Speaker 4 Yes. Yeah.
Sure would.

Speaker 2 My mother had an affair with Jeffrey the Giraffe from Toys R Us during the late 1990s.

Speaker 4 And let me tell you, it's not all it's cracked up to.

Speaker 4 It was pretty dark at times. Let me tell you.

Speaker 2 Long neck, short temper.

Speaker 6 That's what I say about Jeffrey the giraffe.

Speaker 1 Back to the beanie babies, why we're really here. What distinguishing feature have we touched on but not talked about?

Speaker 4 They all had a name and a birth date for whatever reason. Well, then you found one with a birth date near you, and you were like, Oh, we're spirit animals, literally, me and this beanie.

Speaker 4 Yeah, there was storytelling in there, right?

Speaker 2 Didn't each of them have like a little description, too, so you could get like emotionally attached to them

Speaker 2 via their tag, which many people then put in little like uh tag protectors so they didn't get bent.

Speaker 1 Guess whose idea that was?

Speaker 1 Lena again. Whoa, she writes herself 138 poems for the Beanie Babies tags.

Speaker 4 She wrote them herself?

Speaker 1 She wrote them herself.

Speaker 1 Let's take a look at one. So I'm going to need one of you to do something easy and one of you to do something hard.

Speaker 4 Who wants what? I'll do something hard. Love that for you.
Yeah.

Speaker 1 Brian, could you read the poem for Stripes the Tiger? Oh.

Speaker 4 Stripes was never fierce nor strong. So with tigers, he didn't get along.
Jungle life was hard getting by,

Speaker 4 so he came to his friends at Tai. You know, back in the day, like, I thought this was American literature,

Speaker 4 like mind-blowing poems. And just reading that, I was like, oh, they were just poems.

Speaker 4 These words rhymed. That's okay.

Speaker 1 Well, Ian, imagine you are Lena for a minute. Take a look at this ghost named Spooky.
Could you please write a poem for Spooky and make it snappy? These things are selling fast.

Speaker 4 Okay, yeah. Um,

Speaker 2 it's scary out this time of year, even if your heart is full of cheer.

Speaker 2 And of his ribbon, he'd love to boast.

Speaker 2 The only thing spooky is that he's a ghost.

Speaker 4 Oh, banger. Yeah.
Bars. Oh,

Speaker 4 bars. Wow.
Yeah.

Speaker 1 Well, you might have a future at Thai Inc.

Speaker 2 I hope so because the television industry is collapsing and I can honestly use parachute.

Speaker 1 So these things they are selling fast, and there is a massive secondary market on eBay. For example, Batty the Bat was worth $9,500.

Speaker 1 Fleece the Lamb goes for $20K.

Speaker 1 And our friend, Spooky the Ghost, $33,000 or about as much as a luxury car back then. Man.

Speaker 4 Yeah.

Speaker 1 What could possibly make you spend $33,000 on a beanie baby?

Speaker 4 I would need those beans to be like, what's that story of the Jack and the Bean stocks? I would need them to be magic beans in there. I need more than just a ghost in a cute poem.
Yeah, right?

Speaker 2 Yeah. The poem would have to be a screenplay that I could then turn into a motion picture.

Speaker 4 Yeah.

Speaker 1 By 1997, full-blown beanie mania takes hold of America. Newsletters, pricing guides, and fan tributes bubble up across America.

Speaker 1 So let's take a listen to one fan named Janine Tortis talk about her contribution to beanie baby culture in the HBO Max documentary, Beanie Mania.

Speaker 1 I wrote a song, it's a beanie rap.

Speaker 1 People have told me it's catchy.

Speaker 1 Oh yeah.

Speaker 1 Let me tell you a story about a tidy tie. Since he created these beans that make me hot.
Little beans in their bodies and cute little faces. And he addicted to them, been to all kinds of places.

Speaker 1 Beanie rap.

Speaker 1 It's a beanie rap.

Speaker 1 It's a beanie wrap.

Speaker 1 I'm all tied up.

Speaker 2 The length of the pause before someone said catchy must have been extraordinary. Like, what do you think?

Speaker 4 It's

Speaker 4 catchy.

Speaker 4 I need that exact rap dubbed over the clip of eight miles. Just the whole situation.

Speaker 4 It's beanie. And you see the crowd.
Yes, yes, it's beanie rap. It's beanie.

Speaker 4 Love it.

Speaker 1 So in May of 1997, beanie collectors spend $500 million

Speaker 1 on eBay auctions for beanie babies. That's half a billion dollars.

Speaker 1 in one month in one month in may of 1997 500 million dollars on ebay oh boy boy and warner loves pulling the strings when he announces the retirement of kiwi the toucan ebay traffic jumps 3500 percent what right this was a craze like people are buying everything on there and that alone that one my god yeah that amount of power wow so i mean collectors get careless as they stampede into stores and trample or injure small children.

Speaker 1 At a beanie swap in Guilford, Connecticut, one little girl gets a bloody leg after a shopper crashes into her, rushing towards a beanie tent.

Speaker 1 Ian, could you please read this quote from another Connecticut parent?

Speaker 4 Yeah.

Speaker 2 During several beanie baby quests, my son was trampled by a herd of women racing to the shelves to capture an endangered animal. The last Ziggy the Zebra, perhaps.

Speaker 2 And I have witnessed younger children, near tears, leaving shops empty-handed while someone else's grandma carried home a bag bulging with her latest beanie bounty

Speaker 4 so i had a ziggy the zebra i think my mother must have been in that story she must have been one of the ones trampling people now i know yeah and i was thinking when i read that i was like back in the day remember black friday was a thing like people were going crazy over furbies yes

Speaker 1 the furby craze tickle me elmo yeah you know this was kind of par for the course back then, but a responsible CEO might try and cool things down a bit.

Speaker 1 But Warner seems to be doing everything he can to stoke the mania.

Speaker 4 Big surprise from a guy in a top hat and a roll.

Speaker 1 Yeah, raking in billions.

Speaker 2 Sitting in a throne made out of the bones of children who died in the Black Friday trample.

Speaker 4 Oh, yes, more chaos, please. Retire the toucan.
But soon, retire the toucan.

Speaker 1 So think back to 1997. Is there any event that you could try and exploit for maximum exposure?

Speaker 2 Being on Friends or Seinfeld, I guess what was that? Like Must C T V era?

Speaker 4 A little darker than that. It's a little darker.
Oh. Oh,

Speaker 2 I know where you're going. Yeah.

Speaker 1 In October 1997, Ty Inc. announces that in the honor of the recently deceased Princess Diana, they will release a commemorative purple beanie bear called Princess.
Which I have.

Speaker 1 Which we all still were like, gonna get it.

Speaker 4 Guilty as charge.

Speaker 1 So while Warner announces that the proceeds will go to Princess Diana's foundation, the bears instantly become a collector's item. They're supposed to be sold for about $7,

Speaker 1 but some places gouge customers charging anywhere from $25 to $350 for Princess.

Speaker 1 Many people are convinced that this bear is going to be worth a fortune someday. So, how do you feel about people's reactions to beanie babies at this point? It's a little over the top.

Speaker 2 They were kind of like NFTs of their time, right?

Speaker 4 Where it was like, yes, crazy.

Speaker 2 You know, they saw other people getting rich off beanie babies, selling them for, you know, $30,000 or whatever. And they're like, I don't want to get left out.

Speaker 2 This is going to the moon, as it were, you know? So I guess I understand that sort of like economic insecurity aspect of it.

Speaker 4 This was that GameStop moment.

Speaker 4 Wow. This is crazy.
Yeah.

Speaker 1 So by this point, the beanie craze is spawning actual crime. People smuggle beanies over the border from Canada.
A McDonald's employee steals $6,000 in teeny beanies and goes to prison.

Speaker 4 Imagine, what are you in for? Like a match.

Speaker 4 Contraband.

Speaker 4 No further questions. He said, no further questions.

Speaker 1 There was a store clerk in LA robbed at gunpoint for 40 beanie bears.

Speaker 1 A former co-worker shoots a man who's borrowed $150 worth of beanies to start a beanie trading company.

Speaker 1 And this may not be a literal crime, but folks invest criminal amounts of money in beanies in hopes that they can buy expensive cars with them or even pay for their kids' educations.

Speaker 4 Good luck with that.

Speaker 1 By 1998, 65% of American homes have at least one beanie baby. And Ty Inc.
has set a toy industry record with sales of more than $1.4 billion.

Speaker 4 Oh, boy. Yeah, that tracks.
Yeah.

Speaker 2 $6 at a time, too, you know? Yeah.

Speaker 4 Wild. Yeah, that's the crazy part.
Like, that's the part you can't forget. Is it six bucks to get that much money?

Speaker 1 So did anyone get, I don't know, super rich off of this? You bet.

Speaker 1 Warner himself is swimming in wealth, and he wants people to know it. When Forbes leaves him off of the 1998 Wealthiest Americans Who Make Lots of Money list, it pisses him off.

Speaker 1 He buys a full-page ad in the Wall Street Journal to let everyone know that Thai Inc. made $700 million the previous year, more than Hasbro and Mattel combined.

Speaker 1 The next year, in 1999, Forbes lists Warner with an estimated net worth of $4 billion.

Speaker 4 Wow.

Speaker 1 So while Warner is raking in absolute scumbag levels of cash, not everyone else is. Remember Lena, the creator of the website and the tag with the poems? Oh, no.

Speaker 1 How much do you think she's getting paid?

Speaker 4 Well, I'm willing to bet she's not diving into money like Scrooge McDuck over there.

Speaker 1 $12.50 an hour.

Speaker 4 Shut up.

Speaker 4 Whoa.

Speaker 2 I was going to say like $100,000 a year. And even that would have been not enough.

Speaker 4 $12.50 an hour?

Speaker 1 Yeah, not even salaried.

Speaker 4 I made that much cutting deli meat for a grocery store. Like,

Speaker 4 that's what?

Speaker 1 Yeah. She asks the Thai Inc.
board for a raise and is denied. She quits.

Speaker 4 Right move. Yes.
Correct move.

Speaker 1 Correct move. And she probably got out at the right time because things are about to go south for Ty.
Here we go.

Speaker 1 Three months before that year's big Christmas shopping season, without warning, Warner announces that all beanies will be retired.

Speaker 4 Dun, dun, dun.

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Speaker 1 On December 31st, 1999, Warner promised he would end all beanies, and his last beanie would even be called the end.

Speaker 4 That's aggressive.

Speaker 1 Let's listen to a news clip.

Speaker 10 So, is it official? It's official. Shop owner Joe Diamond had to post the news.
Beanie babies are dead. It's over.
December 31st. Millennium.
No more beanie babies.

Speaker 10 No, no more Quackers the Duck or Pinky the Flamingo. The company says every last one will be retired.

Speaker 4 Wow. Uh, that's a choice.

Speaker 1 Yeah, what do you think's going on here? Why would Ty Inc. stop making beanie babies?

Speaker 4 Maybe he doubled down thinking that, you know, the world's going to end. Yeah.
Why 2K? At this point, it's a new millennium, so I guess we'll just end it now.

Speaker 2 Millennium Death Cult. That can be the only answer.

Speaker 1 The only answer.

Speaker 1 Well, it turns out it's actually just another marketing stunt to drive up interest and demand.

Speaker 1 But the stunt had the opposite effect. Collectors go nuts and try to sell off their inventories as fast as possible.

Speaker 1 Beanie babies had lost their shine to new collectibles like Pokemon, and this was seen as a sign the aftermarket was crashing.

Speaker 1 So, whether he realized his mistake or had planned this all along, Warner announces a kind of takesy backsies on Christmas Eve.

Speaker 1 He creates a poll asking fans to make the decision on whether Beanie Babies would live or die. And in the ultimate money-grubbing move, Ty Inc.
makes people pay money to vote.

Speaker 4 Oh, this guy.

Speaker 2 Like early American Idol rules, right? Where you had to like pay like 25 cents a vote kind of thing.

Speaker 4 Yeah.

Speaker 1 And is there a more self-selecting group of voters in the world? Like, who is going to pay to vote? No?

Speaker 4 Yeah. Yeah, it's true.
That is

Speaker 4 just haters.

Speaker 4 Yeah.

Speaker 4 Enjoy this money. No, kill it.
I fucking hate beanie babies.

Speaker 4 I want to see the beans die.

Speaker 1 So, of course, the vote comes in for Warner to keep making beanies, but the craze has clearly passed, which is terrible news for people who've invested heavily in beanies.

Speaker 1 Janine Marin Tuardis, the woman who writes the beanie rap and happens to be a former cryptological technician for the FBI, goes bankrupt.

Speaker 4 Oh.

Speaker 1 Racking up credit card debt to support what she calls an addiction. Wow.

Speaker 1 There's one dad, Chris Robinson, buys hundreds of beanies for his five kids and loses $100,000 that could have been spent on, I don't know, college tuition.

Speaker 1 And then there's a couple that needed a judge to divide up their beanie horde in a bitter divorce battle. They've squandered the court's time and haven't gained a cent.

Speaker 4 I'm that petty, though. Yeah.
I am that petty. I'd be like, no, no, I get ziggy.
My mother trampled children for this.

Speaker 4 Give me it.

Speaker 2 There was 100% scotch in that judge's coffee mug

Speaker 4 during that trial.

Speaker 4 Yeah, just take what you want, whatever.

Speaker 1 So while the value of Warner's precious beanies are tanking, Warner goes on a spending spree. He buys the Four Seasons Hotel NYC for $275 million,

Speaker 1 plus a compound in Montecito, California for $200 million,

Speaker 1 a nearby country club, a ranch, another Four Seasons Hotel in Santa Barbara, and whatever else he could find. By 2002, he is worth $6 billion.

Speaker 4 Oh man.

Speaker 1 2002 is also the year when Warner finally proposes to longtime partner Catherine Zimmi. But I have to add a big allegedly here, and again, you'll find out why soon.

Speaker 1 By the 2000s, beanies are cratering in popularity. In 2009, Ty Inc.
makes an attempt at recapturing the magic by releasing beanie boos, which are like like fluffier beanie babies with bigger eyes.

Speaker 1 Let's look at a photo.

Speaker 4 Yeah, my niece had a few of those. She used to like ask for them for Christmas or whatever.
And I was like, these things are creepy.

Speaker 1 From Hallmark to any CVS you walk into.

Speaker 4 Literally every CVS.

Speaker 4 Every single one. Just a stack of them down there.
Just with the big beady eyes staring you down once you walk through the sliding doors.

Speaker 2 They're hoping your flu is bad enough that you will accidentally buy one.

Speaker 4 That's the entire business model.

Speaker 1 Yeah.

Speaker 1 So, this may come as a shock to you, but nobody wants to buy these abominations like they did the original beanies.

Speaker 1 I have to give a shout out to flop legend, the great recession, because she and COVID are neck and neck for who's contributed to the most flops in human history, honey.

Speaker 1 So, yeah, the financial crash erases half of Warner's wealth, but he's got another problem. Turns out, Warner has a naughty little secret that is going to cause problems for him.

Speaker 1 Do you have any idea what a super wealthy man might be in trouble with?

Speaker 2 Big Pokemon card collection.

Speaker 1 He's just blown all of his money collecting Pokemon.

Speaker 4 What a turn that would be.

Speaker 1 Well, we're talking a secret Swiss bank account.

Speaker 1 The financial crash spurs the IRS and the DOJ to find money that's been hidden around the world, and Warner has made millions in interest over this undisclosed account. So he's in big trouble.

Speaker 4 Whoopsies.

Speaker 1 In October of 2014, Warner pleads guilty to tax evasion and hiding over $20 million from the government.

Speaker 1 Warner is ordered to pay $80 million in taxes and penalties and to do 500 hours of community service.

Speaker 1 To work off his time, Warner helps fabricate mascot costumes for high schools in the Chicagoland area.

Speaker 4 The degree to which this story is screaming for a musical on Broadway is like

Speaker 2 off the charts. It's perfect.
The sad song where he's like sewing, you know, like a gorilla head or whatever.

Speaker 1 Well, there's there's one final embarrassment for Warner. Remember all the weird caveats about his relationship with Catherine Zimmy, his life partner?

Speaker 1 Well, in 2021, Zimmi files a lawsuit against Warner for half of their Montecito estate. Zimmi says she's aided Warner throughout his career without receiving her fair share.

Speaker 1 Zimmi also says the relationship has been abusive, alleging that Warner physically threatened her in the Four Seasons Hotel, scolded her for using a cane, allegedly hid the cane so she couldn't use it, and even stole her identity to obscure some of his assets.

Speaker 2 The nerve of this man who had a cane and a top hat and a coat when he didn't need it, only to sell toys to scold someone who medically needs a cane.

Speaker 1 She also alleges that she had to flee their home in 2020.

Speaker 1 Now, we have to add a huge asterisk to this, though, because Warner's lawyers deny Zimmy's accusations, and the lawsuit is quickly settled without Warner admitting any wrongdoing.

Speaker 2 So he's innocent, of course.

Speaker 4 Naturally. Yeah.

Speaker 1 So let's do a little, where are they now? Since the financial crash and Warner's indictment, we haven't seen a lot of Ty Inc.

Speaker 1 There was a recent film, The Beanie Bubble, loosely based on fact, and starring Zach Galifatnakis Galifatnakis as Ty Warner.

Speaker 1 But the movie was largely overshadowed by another toy-based movie that came out last summer. You might have outsold Mattel back in the day, but not today.

Speaker 1 Ty Warner is still the CEO of Ty Inc., and that's about all we know. He is very secretive.
Ty Inc. HQ doesn't even have a sign out front.

Speaker 4 All of a sudden, they find out about your Swiss bank account.

Speaker 4 That's a big humble pie, isn't it? Oh, please respect my privacy.

Speaker 1 Lena Trevedi, the web designer/slash poet who gave the beanies their birthdays, hit a rough spot after leaving Thai, serving jail time and even experiencing homelessness.

Speaker 1 But now she is a tech entrepreneur working with an AI startup. Hell yeah.
She describes her time at Thai Inc.

Speaker 1 like a whirlwind romance and seems grateful to have been quote at the right place at the right time.

Speaker 1 By the way, tai.com recently announced its line of 30th anniversary commemorative beanies that look like the originals. And you can't buy them on the website, only at select retailers.
So it's time.

Speaker 1 Get out your beanie guides. These are going to be a great investment, I can tell.
Yeah.

Speaker 4 Well, they do say if you don't learn from history, it will repeat itself.

Speaker 4 We are back.

Speaker 1 But you know what? I looked up.

Speaker 1 They are still really trying to sell some of these beanie babies for five figures on ebay to this day that's bananas but most of them are ones that have an error on the tag so there's like there really are only a couple out there

Speaker 2 well here on the big flop we do like to try to end on a high note so is there any silver lining that you can muster up from ty warner and ty ink you know even if your beanie baby isn't being played with and it's just in some corner of your basement that's basically like a beanbag chair for the rats that live down there so at least somebody is getting something out of this.

Speaker 2 There it is.

Speaker 4 Yeah. There it is.
I have all my beanies, which means I have all those memories. And that's just about it.
That's all they're worth. That's all I've got.

Speaker 1 You know, I was thinking, like, I don't know how many times we need bubbles to burst to say we've learned our lesson about overvaluing collectibles.

Speaker 1 I mean, at this point, nobody would pour tens of thousand dollars into something as ridiculous as, say, I don't know, digital images of bored monkeys, right?

Speaker 1 So now that you both know about beanie babies, would you consider this a beanie baby flop, an oversized beanie flop, or a mega beanie boo flop?

Speaker 4 Is D, all of the above, an option?

Speaker 2 I think this dude is still rich, right? I mean, he's still rich, even though he got in legal trouble. I think it's just kind of a mini baby flop.

Speaker 1 Yeah, I mean, the company's still around, still making money.

Speaker 2 The company's still around. It had its moment.
You know what I mean? It served its purpose. What toy has stayed hot forever? Pretty much just the aforementioned Barbie and then I guess Lego, right?

Speaker 2 But those are almost more genres of toy.

Speaker 4 And even though they're not like selling and like the boom that happened, and I've got a whole bin downstairs, and they're not going anywhere. Mm-hmm.

Speaker 1 Well, thank you so much to our fun-filled guests, Ian Carmel and Brian Mahler, for joining us here on the Big Flop. And thanks to all of you for listening.

Speaker 1 If you're enjoying the show, please leave us a rating and review. We'll be back next week with another eccentric CEO who didn't quite work out.
It's the co-working flop you've all been waiting for.

Speaker 1 We work.

Speaker 4 Bye. Bye.
Bye.

Speaker 1 The Big Flop is a production of Wondering and At Will Media, hosted by me, Misha Brown, produced by Sequoia Thomas, Harry Huggins, and Tina Turner. Written by Anna Rubinova.

Speaker 1 Engineered by Andrew Holtzberger. Our story editor is Drew Beebe.
Our managing producer is Molly Getman. Our executive producers are Kate Walsh and Will Milnotti for At Will Media.

Speaker 1 Legal support by Carolyn Levin of Miller, Korzynik, Summers, and Raymond. Producers for Wondery are Matt Beagle and Grant Rutter.
Story editing by Brian Taylor White.

Speaker 1 Senior story editor is Phyllis Fletcher. Coordinating producer is Mariah Gossett.
Music supervisor is Scott Velasquez for Freesong Sink. Our theme song is Sinking Ship by Cake.

Speaker 1 And executive producers are Lizzie Bassett, Morgan Jones, and Marshall Louie for Wondering.

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