Dave Rivetto said he had a customer come into his Detroit sports card store recently and asked to buy an entire case of the new Topps Pristine baseball product that just dropped. He then offered to buy the entire store for seven figures.
The Grand Slam Sports Store has sat since 1989 in the corner of an unassuming, L-shaped mall in Sterling Heights, Mich., about half an hour north of Detroit. It is one of the few such stores left in the country.
No, was Rivetto’s answer, with two points.
He said: “I can quit my job and go on my own now, but I told him no.”
Why turn down life-changing cash – especially when small cracks are starting to appear in the card industry?
Simple answer: Because the playing card market in recent years has been a fire hose of revenue for Rivetto’s store as longtime customers line up before the store opens to get hands on the latest products. That’s too much money to pass up, even if it’s over a million dollars right now. He also doesn’t want to sell the best new cards to a single customer.
“It’s not a matter of money for me, it’s a principle. I need a product for customers, not one person,” Rivetto said. He said he expects to make more money when Topps gets NFL and NBA card licenses from Panini in a few years, because his store gets more Topps merchandise to sell.
The question is, how long will the good times last? Is the boom card starting to decline?
It is not an easy question to answer because the evidence is a combination of continued success but also some prices falling from their peak in 2020-2021.
The sports card industry has been doing very well since 2015-16. It learned its lessons about overproduction and adopted a policy of artificial scarcity to manage demand. The pandemic sent it into overdrive – consumer sales and sales but also deep-pocketed investors pouring money into credit card businesses – while fueling a wave of predictions that the economy would collapse to an unsustainable level. able to support it.
That said, there is no suggestion that the business card market is facing the deep recession of the 1990s caused by overproduction and the proliferation of card shops across the country. Much of the industry disappeared or consolidated during the recession, and the country’s estimated 10,000 card shops dwindled to 1,000.
What’s happening now, industry insiders told The Athletic, is that some cards are going down in price — market corrections, mostly sales — and the overall market is coming off a record year. of 2021 for sales and marketing.
And that’s not necessarily a bad thing, some say. Falling prices could mean more collectors and investors can get into the hobby – especially children, a consumer group left behind as the card industry focuses on more expensive products.
The multi-billion dollar credit card market is not a monolith. There are new products for sale but also many old cards that can range in price from a few dollars to millions of dollars. Demand can vary within sub-markets – that’s why we’re seeing major card industry companies add products and services, such as sorting and storage, to meet ever-hot demand .
High-end products are still in demand, more so than in the early boom times, said Adam Martin, co-owner of Dave & amp; Adam’s Card World near Buffalo, N.Y. It is said to be the world’s largest retailer of card boxes after Walmart and Target.
“(High-end demand) is still crazy. It’s still the best it’s ever been. There are absolute collectors, entrepreneurs, spenders who still have and more money to spend, and they’re looking for something better to invest their money in outside of the stock market,” Martin said. “On the other hand, things that are very cheap – unopened boxes, rare condition rookies – the market for them is very easy right now.”
Why is it easy in that part?
Martin said: “A lot of people came to have fun while they were at home. “Now the world is better. A lot of people who jumped then, they haven’t moved on.”
Inflation, gas prices and other economic factors are keeping some collectors away, and some people are worried about their financial future amid all that is happening in the country and the world.
“If we’re going to go bankrupt, and a lot of experts think we are, these are the type of collectors for whom credit cards aren’t important when they have to pay off their mortgage,” Martin said. “We see less spending on unnecessary things.”
Consumers who see cards as part of an investment like fine art, rare wines and luxury cars, continue to spend more on entertainment.
For example, Panini’s National Treasures line of baseball cards hit stores recently, which is one of the most expensive card brands on the market today. Each case includes four boxes and 40 cards in total, and the case is priced at $18,000 to $20,000, Martin said.
It’s confirmed! “High End Case Break” for Prizm VIP ticket holders at the Prizm #NFT party, Friday night at the @nsccshow in AC will be a full NT Basketball case!
There are only 10 tickets left in this category, guaranteeing a spot at the break! Tickets Here https://t.co/IiW6H5YZLh pic.twitter.com/fmQvtJBaIg
— Panini America (@PaniniAmerica) July 24, 2022
It sells, mainly to profit-making businesses (which buy cards to open streams after selling access to certain teams or players to investors).
“In the world of online trading, in high-end collectibles, this is one of the most sought-after baseball cards every year,” said Martin. “This is the best.”
Although some prices are coming back to Earth, Martin said the card industry remains healthy. That hope was confirmed by Ryan Cracknell, an editor with the famous business card industry magazine, Beckett.
“While prices appear to be slipping on some (some very popular) singles and supply appears to be increasing at the retail level, I believe that the hobby is still in a strong position, ” Cracknell said in an email. “You can probably find evidence on both sides to say that some sectors are struggling and some are thriving, but that’s the nature of the industry. There are always changes that happen.”
He explained how the change in the market is dangerous for some but opens up a way of entertainment for others.
“If there is any sector at risk, I suspect it will be those looking to make a quick profit. Margins are shrinking and collectors seem to be getting more selective about what they buy. That is not good. for competitors, so some of them can move on,” said Cracknell. “However, what’s left is a group of collectors who are here because they enjoy it. I think that’s a good thing. When the prices are too high, it reduces access. If some parts are fixed and people have an easier time finding things within their budget, that would be encouraging.
“The path that will not always be there. I think the end when some parts are still very high. The correction should make things stable and give a true reflection of where we are. Again, a good thing.”
Jason Howarth, vice president of marketing at Panini America — the main seller of licensed NFL and NBA cards until that license passes to Topps in the coming years — acknowledged soft demand in other parts of the market. but he also gave reasons for hope.
He said: “The weekly events that take place on the field, in the courtroom or in the front office have always been what drives this industry.” “There’s been no shortage of buzz lately with the NFL and NBA Drafts just completed and MLB’s First-Year Player of the Year … as well as the World Cup coming up.
“The hobby market continues to see very strong prices for wax boxes, all driven by consumer demand. Single-card sales of key rookies and shortlisted entries have maintained their strength in football and basketball. ”
Panini continues to sell top brands in hours but sometimes minutes, Howarth said.
“The retail market is still very strong,” he said. .”
Topps, perhaps the most well-known card maker, was purchased by licensed sports outfit Fanatics for $500 million in January. Over the years, Topps has tried to adapt to the market by introducing things like its short-lived Topps Now cards, digital cards, special cards created by artists, custom cards , a collection of pop-culture and a portfolio of various licenses. sports.
Class of 2022 inducted into the Hall of Fame! Catch this #ToppsNOW moment at the party and more of last night’s action!https://t.co/oXMT9CBTBO pic.twitter.com/UChWvoePxg
— Topps (@Topps) July 25, 2022
The manufacturer is also adding more hobby shops to its direct dealer program that are available outside of the long-standing hobby arrangement of middlemen, said Dave Leiner, Topps vice president and general manager. the totality of the world.
“We’ve seen a lot of healthy trends in our business accelerate,” Leiner said. “We had a very strong situation in the back half of 2020. The growth and the strength of the demand in the industry is very healthy. Day by day, the stores remain strong. There was a time when we could not keep the goods on the shelf.”
Although the market for other trading and trading cards has decreased, Topps has not lowered the prices of the products it sells to dealers or retailers.
“There’s no downside to how we do pricing,” Leiner said, noting that Topps products range from $1 cards to $30,000 boxes.
Jesse Craig, director of business development at major card retailer PWCC Marketplace, says the price drop is the right size for the market — which he sees as a good thing for the industry.
“This is the correction that PWCC is expected to see from the boom that started in 2020,” he said in an email. “It’s also a market situation that we believe is necessary to show that business cards are proving to be a viable asset class. We want to see this space perform in a way that you would expect other investments to be.” work.”
The cards most affected by the price drop are modern and high-risk offerings such as rookies or young players who have yet to establish their careers, he said.
“Cards that are considered ‘commodities’ – cards that are in short supply or rare – will also be affected. If supply is high and you know you can get the same card in a month or two, many they will stand by and monitor the market,” said Craig.
PWCC also sells multi-million dollar consumer cards. That remains untouched, he said.
“We had the same number of seven-figure deals closed at PWCC compared to the same period in 2021. In all of 2021 we had five seven-figure sales at public auctions. In months six in 2022, we had three,” he said. “Those numbers don’t take into account PWCC’s private sale, which we only announce where the buyer accepts the announcement.”
🚨Many who have ever paid Kobe card🚨
Record-breaking Kobe Bryant Green PMG sold for $2 million at private sale!🔥 pic.twitter.com/1o7cFJA5um
— PWCC (@PWCCmarketplace) February 22, 2022
Another indicator of the economy of the card market is how many consumers and merchants use services like PWCC.
“PWCC currently sees around 15,000 people sign up on the platform every month,” said Craig. “That number is increasing gradually throughout the year. We are also seeing a strong number of buyers and sellers every month and every week in all markets. This tells us that although it may not be as hot as before, the desire to participate in the market is growing. “
Craig added that PWCC believes that the health of the market is based on important internal factors. PWCC’s data shows that its tracking cards have held their value amid several recent market crashes from 2018 through the spring.
“In three recent market crashes, sports cards have held steady value. Although the S&P 500 fell an average of 17 percent and bonds took a small hit, sports cards had good returns overall,” he said. “During high price periods, sports cards have their value or yield an annual growth rate of up to 95 percent.
Not only do sports cards provide stability in the midst of economic crisis, but they have also proven to be beneficial when held over a period of a year or more. In the last five years, the value of playing cards has increased by 218 percent, which is more than every currency except cryptocurrency.”
A well-known sports card industry blogger on Twitter who goes by the name Card Purchaser (he asked The Athletic not to use his name because people in his real life don’t know he runs the account), has been monitor potential risk and identify alternatives. .
“Card enthusiasm has waned and collectors and investors have become more focused,” he said. “Collectors who joined in 2020 and 2021 are now more experienced and spend their money more carefully. Card companies have increased inventory and now cards are easily available everywhere. The general economy has not helped either. Collector the average person has higher gas prices and other expenses eating into their budget. The deals will always be there, it just takes more time to find them now.”
Although he noted that there will always be individual cards or sealed boxes that retain their value, sales prices for some products have recently fallen – in part as consumers are targeting retailers. of excess products.
“WWE Prizm hobby boxes were $800 or more when they were released … $408 (recently) in an eBay auction with free shipping,” he said. “Groups selling variable items and setting prices are leaving collectors holding the bag. Many influencers in the hobby are involved in hyping products that have no value. It’s hard for stores to compare, the goods were very hard to find last year. Are sales the same or higher because there are more products available now? People returned to stores from online shopping. ”
Prizm WWE Hobby Boxes are now under $400 on Buy Now on eBay https://t.co/KtZfV8cdE1
— Card Purchaser (@CardPurchaser) July 25, 2022
At eBay, which has become the world’s largest marketplace for card sales, sales continue to move at a brisk pace even if they’re down slightly compared to the banner year of 2021, said Bob Means, director of cards. of eBay business.
“We’re dealing with seven (consecutive) years of growth,” Means said.
Without revealing specifics, eBay said that the platform moved 4 million more cards in 2020 than during the pre-pandemic period of 2019. Last year, cards sold every second 2 on the site (some of which were not games like Pokémon and Magic: The Collection game cards).
Ebay made $2 billion in business card sales in 2020, and will match that in the first half of 2021, Means said. That pace has slowed, and Means said he would not disclose current sales estimates, but reiterated that cards remain a healthy business for the company.
“A lot of it is the quality of the cards going down,” Means said. “There are renovations going on there. The general business is good. We will be very happy when the business cards arrive at the end of the year. Nothing is happening that is worrying from a long-term perspective. ”
He called the value of eBay card sales “a kind of ski-ramp growth” that remains positive.
“We sell tons of $10 cards like we sell a $5,000 card,” Means said. “The pace is still very strong.”
Means is not Pollyanna-ish about the card market.
“Obviously we are paying attention to it; inflation hurts the consumer at this time. You hear it, it’s very real. It has to have some impact,” Means said. “I think people are more aware of their dollar bills. It can lead to people looking for more value with their cards.”
Outside of the big U.S. players. and popular card games, there are niche products that are seeing good sales numbers, he added.
“We’re seeing interesting growth in secondary sports,” Means said. That includes soccer, tennis and golf. And eBay expects sales of soccer cards to begin during the World Cup hosted by the U.S. in 2026, with the aim of increasing the list of international product cards from Japan, Australia and other places.
One of the beneficiaries of the extensive trading of the card industry is Ken Goldin, who sold his famous card and collectibles at an auction last summer to Collectors Universe owned by billionaire New York Mets owner Steve Cohen. .
Goldin, who oversees the auction site, sees what others see: price corrections, with high-end cards unaffected because they have become a popular asset class for the wealthy.
“I have seen all the problems and difficulties. I think the real high-end market has become a staple in our society,” Goldin said. “For those people, they’re not selling goods and gambling. It’s like modern art. Maybe cards. Early cigars are your van Goghs, early Topps cards are like Picassos. I don’t see an effect on that.”
Before 2019, his auction house had not sold a modern card for $500,000, let alone $1 million or more. Since then, there have been more such auctions in the seven figures. He predicted there would be 10 by the end of 2022. The auction house sold a LeBron James card for $3.2 million and a Mickey Mantle card for $4.4 million this year, he said.
“I think a lot of the high-end card market has gone private and gone back in time,” Goldin said. “The high-end card market cooled a bit.”
Goldin explained how he assesses the economic health of the card market as a whole: “I’ve always felt that it’s not the unemployment rate that affects us, it’s not the inflation. Indeed, the S&P 500 is a clear indicator,” Goldin said. “It’s a lot easier to sell a $500,000 card when the S&P is 4,000 instead of 3,000.”
For the uninitiated, the Standard and Poor’s 500 tracks the stock prices of the 500 largest publicly traded U.S. companies. with market capitalization on the New York Stock Exchange or Nasdaq. In March 2020, when the epidemic hit, it dropped to 2,300 per month. Today, it is closer to 4,000 again.
“That’s why (at the beginning of the epidemic) the modern market went up a lot. Modern card buyers tend to be young, less confident in assets, less money ,” Goldin said.
Sales last year reached $335 million for Goldin Auctions, which also sells non-sports cards and miscellaneous collectibles. He expects to surpass that in 2022.
“Goldin as a company is doing more business in 2022 than we did in 2021,” Goldin said. “We will pass it at the end of our third quarter.”
Another thing, which Goldin said was more of a blip, was people investing in non-fungible token projects like NBA Top Shot. NFTs are cool again.
“You could see the correlation in those cards starting to drop and the NBA Top Shot revenue,” Goldin said. “People thought they had found a new lottery with no chance of failure. It wasn’t real. It was very popular. That started the decline of some modern cards and wiped out part of the wealth that people had accumulated in the trading card business. It was angered by NBA Top Shot and similar products. Today, I don’t think NFTs have any effect on the business card market. ”
The supply chain crisis that has hit many sectors of the economy has affected the card industry more than NFTs.
Already struggling to keep up with demand, companies such as Topps, Panini and Upper Deck were temporarily forced to shut down production before the pandemic, then raced to find workers and buildings to meet the pressures. of the market. The card processing companies, burdened by a backlog of contributions and expenses, suspended their services while recruiting and training new students.
For example, Topps said that the country’s paper shortage and the time it took to get more machines to print and cut cards contributed to delays in getting cards to stores and supermarkets.
“We still have supply chain issues,” Leiner said.
At its worst in 2020-2021, consumers could not find cards on store shelves. There were reports of fistfights over the cards with dealers, who began limiting how many cards a person could buy.
The cards are often back in the hobby and on the shelves of retail stores, sometimes with a lot of problems – or the entrepreneurs are drifting as far as they can. How long the good times last remains to be seen, but it looks like a healthy vision of the future even if it’s not the Scrooge McDuck-swimming-in-gold of 2021.
460,000 sf of show floor is a good reason to recommend comfortable shoes. pic.twitter.com/Pgu89Z7Y9X
— The National (@nsccshow) July 24, 2022
The growing state of the card industry will be on the minds of thousands of people attending the four-day annual National Sports Collectors Convention that begins Wednesday in Atlantic City. It draws business card collectors, investors, retailers and manufacturers, as well as athletes and celebrities who sign autographs.
Last year’s event attracted an estimated 100,000 people – making it one of the biggest since it began in 1980 – another recession-era, high energy prices and global unrest.
“Yes, the market has corrected, but we believe the market remains healthy and is proving its long-term strength in another difficult economic period,” PWCC’s Craig said.
(Photo: Hunter Martin/Getty Images)
