Jason Masherah, who has been at Upper Deck since 2005, remembers how people used to react when he’d tell them he worked in the trading card industry: “They’d say, Why?”
Some would even follow up: Does anybody collect anymore? “I mean we used to hear that all the time,” Masherah, now the president of Upper Deck, said over Zoom. “‘They still make trading cards?’”
Over the last two years, he’s heard it a lot less. Since 2020, sports cards—and collectibles generally—have caught fire, with individual cards selling for record prices and chain stores pulling products from their shelves for fear that shoppers might duke it out over the last $20 box of cardboard. Collecting has evolved, too. Fresh boxes of wax are opened around the clock on Twitch and Instagram, while new startups make it easier to buy and sell singles or even trade fractional shares of high-dollar cards.
“If you only went back like five years ago, people would look at trading cards as this archaic, dusty, kind of crusty, uninnovative sector,” OneTeam Partners VP of business development and licensing Ricky Medina said. “And now it’s cool.”
But the future has also brought its own forms of collectibles, like NBA Top Shot’s video highlights and DraftKings’ coming gamified NFTs. It remains to be seen, then, whether the tech advances that have helped fuel the trading card boom could ultimately spell its doom.
It wasn’t that long ago that the now-traditional trading card companies were considered the disruptors. Upper Deck debuted in 1989 and fueled that era’s card boom with new designs and memorabilia inserts. More recently, it launched the e-Pack program in 2016, allowing fans to open packs online and have select cards shipped to them. Masherah said that e-Pack and other digital products could make up 50% of Upper Deck’s business in a matter of years.
Panini disrupted the market again when it grabbed exclusive NBA licensing rights in 2009. In January 2020, the company launched its blockchain platform, which has hosted nearly 300,000 transactions since. Then, this year it was Panini’s turn to be surprised by a newcomer, as Fanatics grabbed future MLBPA, NFLPA and NBPA trading card licenses.
While Panini America CEO Mark Warsop said his company was “bitterly disappointed” not to extend its deal, Fanatics’ interest signaled long-term belief in the physical hobby, even as the company builds its own NFT offering under the Candy brand. The market quickly backed up that belief with a $10.4 billion valuation.
“Physical sports trading cards, there’s always going to be a place for those,” Medina said. “It’s going to continue to be optimized, and that market’s going to continue to grow.”
Even if NBA Top Shot helped popularize the idea of digital assets among sports fans, its makers at Dapper Labs are still looking to get more involved in the physical world too.
“Rewarding people with a digital-only item for owning a digital-only item would be a really limited view of it,” Dapper Labs head of partnerships Caty Tedman said while discussing the possibility of NFTs being tied to physical objects or in-person experiences. “It feels like there’s a match there.”
It was the blockchain that got Evan Vandenberg back into cards. Vandenberg came from the digital side of things, serving as the director of business development at WAX, a platform for trading virtual items. Through his work getting Topps onto the platform, he reconnected with cardboard, and quickly saw the pain points collectors dealt with: shuttling their cards between security deposit boxes, managing eBay listings, worrying about packaging. “I was just like, This doesn’t need to be this way,” he said.
So he co-founded Dibbs, which uses tokenized representations of physical collectibles to allow for fractional purchases and trades. The startup recently raised a $16 million Series A round and took investment from Amazon. To date, the vast majority of Dibbs’ users were already card collectors. “I think there’s incredible synergies between the two spaces,” Vandenberg said. “Our business is built on that principle.”
The lines are likely to get blurrier once Fanatics, given its e-commerce and marketplace background, makes its presence felt. As NFT adoption grows, additional categories like gaming and betting will only further complicate the picture. With fans expanding their physical troves with digital holdings and using online tools to collect or showcase hard cards, the bigger divide might not be what buyers are after, but why.
As hobbyists have clamored for new physical or digital releases, they’ve been joined by investors attracted to—and partly responsible for—explosive price increases. A growing group wants cards (and other collectibles) to be seen as an asset class.
When it comes to the philosophical battle among collectors and investors, Nat Turner explains what side he’s on by pointing to the name of the company he helped take private earlier this year, Collectors Universe. “We believe that collectors are what drives this hobby,” he said, “Not investors.”
But he also sees the benefits of the money flowing into the sector. On the one hand, speculators are pricing out some collectors, including potentially the next generation. Yet on the other, they’re driving up the values of existing collections, validating the whole activity and helping to fund companies and investments that can improve the hobby’s infrastructure for everyone.
Already, certain secondary market prices have come down from their pandemic-fueled peaks or leveled off. For some, that might be a sign of encouragement. For others a cause for concern. For Mike Jaspersen, it’s just the latest twist.
“I have to sit back, you know, I’ve been doing this 50-some years,” Jaspersen said. “There’s always this roller-coaster ride.” Jaspersen spent the 1990s watching card prices fluctuate while at Beckett, and then worked 14 years at Topps. More recently, he and his son Nick have turned to online box breaking, with a host opening products live online for customers. And he doesn’t see why he wouldn’t someday add digital openings to the mix, if there was demand for it. “I mean, I’ve sold so many different things,” he said. “It’s whatever really creates an interest in sports and collecting. I like collecting.”
When fans come into Jaspys’ brick-and-mortar location in California, there’s often talk about the hobby’s future. After so many changes, with more on the horizon, Jaspersen said, “There’s a lot of trepidation the next couple of years.” In particular, he’s hoping that the brand names he and others have grown to cherish don’t disappear.
Over at Panini, Warsop offers a bit of confidence. “We’ve been telling ourselves and partners that, no matter what happens with blockchain and NFTs, we’ll be the last people standing,” Warsop said. “I truly believe that.”