By Jonathan Paglialunga
I believe that most people have felt the joy of opening a pack of sports cards and seeing their favourite player in the mix. Due to the COVID-19 pandemic, an unprecedented boom in the sports card industry has occurred, prompting people of all ages to go searching for the location of their old collection. With the pandemic shutting down stores, workplaces and professional sports, many people have found themselves facing boredom in their homes. This boredom acted as a catalyst for the expansion of various hobbies like baking or creating DIY projects.
In 1979, Wayne Gretzky’s rookie hockey card could be found in a box of O-Pee-Chee cards for a mere 20 cents. Fast forward to December 24th, 2020 where this exact card in perfect condition was sold for US $1.29 million, making it the first hockey card valued at over 7 figures.
Chris Ivy, Director at Heritage Auctions, stated, “It is not just a few people coming in and pushing the price of sports cards up, what we have been seeing is a wave — it is a movement,”
Even Ivy, an industry expert, was surprised by the rapid increase in interest and demand associated with retro cards given that they are not an essential product. Ivy said, “We are not selling anything people need to survive.”
The Texas based Heritage Auctions expected to underperform during their spring event as a direct result of the pandemic and they were pleasantly surprised after reporting US$10.5 million in sales, over US$2.5 million above their expectations. During their December auction, the Great One’s card helped the business rake in US$22 million, surprising Ivy once again.
A significant aspect of the sports card market is the condition of the card itself, which in many regards makes the cardboard cutout exponentially more valuable. Professional Sports Authenticator (PSA), the industry standard among third-party authentication companies, ranks a card from one to ten, granting it the prestigious title “gem mint 10.” For example, there are 317 Michael Jordan rookie cards that have been given perfect ratings while the Gretzky card sold in December was one of two in gem mint condition. Following the trends of supply and demand, Jordan’s card fetches US$240,000, an increase from US$40,000 just over a year ago.
This drastic change in the industry warrants two specific questions: Are sports cards now seen as a hot investment or is the market bubble going to pop in the near future?
The very Gretzky card sold in December was first purchased in 2016 for US$465,000, earning a healthy 115% profit margin. Eric Kirzner, a finance professor at the University of Toronto stated, “Ten years from now, you might sell it again at a profit, and you are going to enjoy looking at it, but we are talking about a highly specialized part of the market. Everybody has a card story.”
Author Joe O Connor reasons, “Prices are indeed skyrocketing. Profits are there to be had. But selling a treasured childhood hero can be an intensely emotional transaction, no matter how lucrative the reward.” In my opinion, I believe it is quite clear that scarce retro cards will continue to go up in price for years to come but, like all market cycles, high and low points are inevitable, making the ability to monitor volatility a crucial factor for success.
Although sports heroes might change from generation to generation, the nostalgia attached to memorabilia will continue to grow alongside a fan’s love for the game.