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A Blast From the Past: Sports Card Trading
Do you remember the excitement of swapping baseball cards of sports stars like Ken Griffey Jr., Sammy Sosa, and Mark McGwire? Remember the taste of gum from the packet, the scent of fresh cards, and the delight of finally obtaining a card of a player you admired? While the goal for youngsters wasn't necessarily to 'invest' in these cards, they did hold an immense attraction for them.
Surprisingly, those cards you collected, assuming they've been well-preserved, could be valuable investments today.
The Continuing Popularity of Sports Card Trading
The trading of sports cards hasn't lost its appeal; it remains a significant industry. In fact, an eBay report from 2021 revealed a whopping 142% rise in U.S. trading card transactions on the platform from 2019 to 2020. eBay even predicts an influx of new investors, considering sports cards as a way to diversify their financial portfolios. But is it wise to invest in sports cards at present?
An Overview of Sports Cards
Collectible or trading cards have been in existence since 1886 when Goodwin Tobacco, a cigarette brand conglomerate, initiated a set of baseball cards featuring 12 New York Giants players, known as the N167 set. These cards were sold in cigarette and candy packs to provide rigidity.
Fast forward to today, each of the four main U.S. sports leagues—the NFL, NHL, NBA, and MLB—has exclusive contracts with individual card manufacturers. Panini America produces cards for both NBA and NFL, with the contract set to expire in 2026. The NHL has partnered with Upper Deck since the 1990-1991 season, which now also covers non-fungible token (NFT) cards. As of 2022, MLB switched its partnership from Topps to Fanatics for baseball card and NFT production.
It's noteworthy that Fanatics secured exclusive agreements with MLB, NFL, and NBA for card production starting in 2026, stirring speculations about potential volatility in the sports card market.
Most sports cards adopt a similar layout: the player's image, name, team, and occasionally, stats on the front. The card's rear might contain decorative elements, extended bio and personal details, and additional statistics.
Autographed cards began gaining popularity in the 1970s with baseball cards and soared during the '80s. Signing events often charged an admission fee, where collectors could bring their baseball card for autographing or have a signed photo taken with their favorite player. This trend notably inflated the worth of cards for popular players such as Mickey Mantle and Joe DiMaggio.
The Dynamics of the Sports Card Market
According to a 2021 report by Research and Markets titled "Sports Trading Card Market Size by Type, by Application, by Geographic Scope and Forecast," the international sports card trading market was valued at over $13 billion in 2021. This figure is predicted to exceed $49 billion by 2032, marking a compound annual growth rate (CAGR) of 13% over 11 years.
Despite these impressive figures, this market is not without its hurdles. The popularity of sports card collection has diminished over recent years with the advent of the internet. The younger generation, a major market segment in the past, has shifted their interests towards Pokémon and other video games featuring their favorite real-life players. Additional factors such as inflated card prices, market saturation, and declining interest have contributed to this trend.
Nonetheless, the return on investment from sports cards remains strong. Baseball card collection is a large part of the card trading industry. Its ongoing popularity is fueled by collectors who still invest in cards, driven by nostalgia for their childhood hobby.
How to Buy and Sell Cards
If you're contemplating investing in sports cards, it's crucial to familiarize yourself with the industry. Your decisions will mostly be guided by your preferences, interest in sports leagues, and their leading players. It's essential to decide whether you're aiming for long-term card holding or short-term profits. For instance, in 2021, a 1952 Mickey Mantle rookie card fetched a whopping $5.2 million, while a 1997-98 game-worn jersey patch card from Michael Jordan sold for $2.7 million at an auction.
Sports card investment, however, isn't always lucrative. Card values can vary, and the absence of tangible value for these cards can pose an investment risk. Thus, diversifying your collection is recommended. Concentrating your investment in a single series of baseball cards, for instance, could be equivalent to putting all your eggs in one basket.
You can buy cards at trade shows, eBay, online auctions, or in person. Some large cities also house retailers specializing in card collectibles.
It's also suggested to have a specific sports card investment strategy. You may want to consider trading rookie cards, cards with printing errors, autographed cards, or investing in cards from certain sports or players you believe will gain value over time.
Various Strategies for Sports Card Investment
Investment in sports cards can take several forms:
- Card flipping, which involves buying a card with the intention of selling it for a profit soon.
- Purchasing a card and retaining it for an extended period, potentially up to 10 years.
- Buying cards you're passionate about, of players you admire or those you predict will appreciate in value in the future.
Conclusion
Ensure you set an investment budget to prevent overspending when you encounter a rare card on the internet or at an auction. Similarly, to safeguard against fluctuations or a decrease in sports card value, the majority of your investments should be in traditional assets such as stocks, bonds, and real estate. Only a minor portion of your investment funds should be tied up in collectibles like sports cards.
