Whether it’s a lack of games to watch or another nostalgia boom sparked by the pandemic, sports fans have been focusing on trading cards, ticket stubs and gear of their favorite teams and personalities more than any time in recent memory.
“What we’re experiencing today I have never experienced my entire life, let alone in my career at PSA and Collectors Universe,” said Joe Orlando, CEO of Collectors Universe, the largest grading and authentication company in sports memorabilia. “At some point in the past there was a surge targeted in one segment or another. But today everything is affected, at every level—modern cards, vintage cards—and not just baseball but football, basketball, hockey and everything else…. It’s the most exciting time that I’ve ever been a part of this hobby.”
Collectors Universe and its PSA division, which examines and grades trading cards and other memorabilia for a fee, have seen booming collector demand. In a typical week last year, the company was receiving about 68,000 cards a week. In the recent weeks since its operations have reopened after being closed due to COVID-19 concerns, they’ve been receiving 250,000 cards a week, according to Orlando.
Investors have taken notice too. The publicly traded Collectors Universe has seen its stock surge this summer, touching a new all-time high of $53.67 yesterday—a three-fold gain from its 2020 low hit on March 16. The increase isn’t a fluke of the market crash either: With prices firmly over $50, the company shares are changing hands at double any prior peak they’ve seen in their 21-year history. Collectors Universe generated revenue of $78.9 million and net income of $10.7 million in its latest fiscal year, ended June.
“Prior to COVID-19 the sports card business was already doing very, very well—PSA has been growing for 10 consecutive years,” Orlando said. That’s because of structural changes that benefit collectors, such as a reduction in companies producing cards and disclosure by those companies of just how many of certain cards are printed, he said. “The fire was already burning, but the fallout from the COVID crisis has thrown gas on that fire, from the perspective that more people have come back to the hobby.”
Basically, sports-starved fans started pulling out their dusty boxes of cards and scouring online auctions to pass the time. Ebay reported its quarter ended June 30 was its best in 15 years, in terms of dollar value traded on the site, and it was driven in part by growth in collectibles, according to the company. In July, Ebay shares also hit an all-time high, though they have since declined due to concerns about business divisions unrelated to memorabilia sales. In last month’s auction market, a Mike Trout rookie card sold for $3.39 million—a record price paid for any card.
The boom in sports memorabilia signals to some that now is the time to bring a Wall Street approach to the market. A fractional ownership site, Collectable, launched last week with its first offering: shares in a mint 1953 Mickey Mantle Topps card. The company, which previously focused on collecting and providing memorabilia sales data, is offering 40,000 shares in the Mantle card for $25 a piece. As of Monday, the site had sold two-thirds of the offering to 282 investors.
“The problem in the space is that it’s a very small amount of people who are able to partake in the market,” said Ezra Levine, CEO of Collectable Sports Assets. “If this card were sold anywhere else, only one person could own it. Now 281 additional people own shares of Mantle and a piece of history.” According to a filing with regulators, the consigner is Evan Mathis, an ex-NFL player and well-known card collector. Mathis is keeping 60% interest in the card, valuing the item overall at $2.5 million. It’s one of just two mint 1953 Mantle cards known to exist.
Collectable today started offering shares in a signed LeBron James rookie card for $25 each, valuing the card at $50,000. Levine says the company has another $30 million in inventory to come, including a Wilt Chamberlain game-worn jersey and the baseball that killed Ray Chapman. The company also has signed a deal with football Hall of Famer Emmitt Smith to begin offering some of his memorabilia. Levine says his company will charge about 7.5% to sellers, half of what auction houses charge sellers (and buyers) for memorabilia sales.
In the longer term, he expects to develop a secondary market—a stock exchange—where collectors can buy and sell their fractional ownership at will. The company has been working with regulators to ensure its card ownership and stock exchange operations comply with the financial services industry’s levels of transparency, Levine added. “The memorabilia industry has been plagued for a long time by inaccurate data, unreliable information and fraud. Collectable can provide a lot of transparency, a lot of regulation and keep everything above-board. We’re creating a market for things that previously has no market before.”
Cards are also just the start, says Collector Universe’s Orlando. The next burgeoning market is in original photographs—prints made at the time of a star’s prime rather than new prints from an existing negative or digital file. There is demand not just for originals of Babe Ruth or Ty Cobb, which can sell for more than $100,000, but originals of players from the 1970s and 1980s, like Michael Jordan. His prints have sold for tens of thousands of dollars, Orlando explains.
“Go back even just 10 years ago and some of these photos could be picked up for a fraction of what they’re selling for now. If you and I had a time machine…” Orlando said, echoing what every memorabilia collector has said to themselves at one time or another.