It’s been a roller-coster for the sports card industry (likewise for gaming cards). With the onset of COVID, card prices boomed. But, they have since cooled. With that said, not too many folks are trying to put down an exact number on how much prices went up (and how much, since, they have come down). So I will try to do a little of that today.
Average Price Movements by Type of Sport: Basketball, Baseball, Football and Hockey
I leveraged my database on card sale prices from COMC to come up with a few interesting findings. Using cards with 3 or more appearances in the data, I built an index of average card price movements; I controlled for the average price of individual cards, and just focused on tracking whether prices, on average, are going up or down (and by how much).
Let’s take a look at my first finding. Here, I just broke down price movements by broad category of sport: price fluctuations in baseball, basketball, football, hockey, and “all else” (which includes other sports — such as golf, tennis, soccer — but also non-sport — such as Magic, Pokemon, Marvel, Star Wars, etc.).
The data begins in early-March, with basketball cards at the beginning of their downturn. Notably, football cards kept going up in price for a while yet, before taking a dive also. Curiously, hockey and baseball demonstrated the most stability — limits on the upside, but the downside also.
The graph suggests basketball prices have roughly halved since their peak. Football managed to squeak-out another 30% before falling back to early-pandemic levels.
Price Movements by Price-Levels (Does “Top-Tier” Collectibles Hold Their Value Better?) {The Example of Basketball Cards}
We see the bubble for basketball cards deflating above.
When confronted with the challenge: “aren’t collectibles in a bubble?” many proponents of sports cards — particular, the new genre of “collectibles-as-investments” advisors — suggest that collectors should be okay if they focus on “the top of the market.” That is, buying high-end collectibles, rather than more low-to-mid-ranged product. We can theorize all day long about whether that ought to work or not… but we can also just dive into the data. So, taking the example of basketball cards (which have experienced the most notable deflationary trend amongst the major sports categories) here is my main finding… and some rather modest conclusions that I believe may be safely drawn. (Once again, I control for the mean value of each individual card in the dataset, then I track average movements in prices for each individual card.)
In the above, we see that the relatively expensive cards in the dataset (over $100) managed to keep their steam longer than the other price-brackets, but ultimately fell back down to their early-pandemic price-levels. In general, prices for basketball cards lost around 40% of their value for cards over $20 (they have lost around 50-60% of their value for cards under $20). While faring marginally better, an individual buying “high-end” product would not, on average, have fared well as an investor.
I don’t want to be a false-prophet, who promises much on thin evidence, so let me keep my conclusions to the obvious: even if your high-end investments might fare marginally better than your lower-end items, your immunity will still wane to downward market pressures. The bubble-bursting, it seems, will get to them too, in time.
Price Movements for New Releases: The Hype-Factor Appears all to Real {The Example of Hockey Cards, and Especially their E-Packs Format}
Finally, I split my dataset into “New Releases” and “Past Releases” to draw some modest conclusions about one final observation: it really seems that cards get a major boost just by virtue of being recent releases. But recent releases eventually become old news. So, what is the premium that collectors are paying to get the latest and greatest?
In the following, I look at hockey cards. The choice of hockey cards is intentional: my data is pulled from COMC, which has an agreement with Upper Deck E-Packs to allow cards to be transferred from E-Pack to the COMC platform for purpose of selling. As such, COMC is especially well-placed to list “hyped-recent-releases” rather quickly (relative the other sports).
Crucially, the trendiness demonstrate a serious premium to buy into a recent release. Products from the 2020/21 release years are shown to dive in value, whereas hockey cards from pre-2020 are shown to have held steady across the sample.
The size of the penalty is especially notable. Recent releases have lost approximately half their value since the beginning of the time-line, whereas older releases have held steady, and even made some marginal gains (again, I am looking at hockey as the subset of cards).
Final Notes: Be Wary those Over-Confident
Yes, some folks have done well by investing in sports cards. And perhaps you are especially astute too. But be careful. Maybe the are a good investment… I am not so smart as to tell the future. But some proponents of sports card investing seemingly do claim privilege over knowledge of the future. Ultimately, I want to make one key suggestion: the most important piece of data is missing.
A will write a future, in-depth, article on this very point: if cards are to be a steady, long-term, investment, then I very much suspect they need to be moving into the hands of long-term collectors — not short term flippers who can only drive short-term speculative bubbles. So, what is the first priority question that the industry should be surveying through a reputable pollster: “How much money do you [the interviewee] spend annually on collectibles that you intend to hold onto for the long-term?” The second priority question: “Given your economic outlook in the near-future, how much do you intend to spend in this coming year on collectibles to hold for the long-term?”
Making the (big) assumption that sport card companies will keep their supply-levels relatively constant, it would be tremendously useful to estimate how many dollars in demand exist, with which to buy-up the existing stock.
Once again, I’m just sharing a quick thought. I’ll aim for a more intensive article on the subject in the near future.