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Are Baseball Cards A Good Investment? - YouTube
Channel: CNBC
[4]
Sports cards are back.
[6]
People are buying and
selling cards with
[8]
enthusiasm not seen since
the heyday of
[10]
collecting in the 1980s.
[13]
I think what you're seeing
right now across the
[14]
industry is one of the
most healthy and vibrant
[18]
times that we've seen
for our industry.
[20]
It's tough to pass on the
money to be made Right
[23]
now. 20 20 has seen
record breaking numbers for
[26]
cards sold at
public auctions.
[28]
Over 10 have sold
for five hundred thousand
[30]
dollars or more. We sold
a mike trout card
[33]
limited to one the super
factor for three point
[36]
nine million. These are
the two most expensive
[38]
basketball cards in the
world that have publicly
[41]
traded. The resurgence has
been building over the
[43]
last several years, largely
driven by those in
[46]
their 30s and older who
collected as kids and are
[49]
now adults with
income to spare.
[51]
We all had this crappy
experience of the card
[53]
companies flooding the market
and then our cards
[55]
being worthless. But you
fast forward 30 years.
[57]
You kind of have a
remembrance and nostalgia for
[60]
how fun that was. With
the onset of the pandemic,
[62]
card collecting exploded and
now Wall Street and
[66]
Silicon Valley are
taking notice.
[67]
What we have never had
in the business are wealth
[70]
managers, money managers,
hedge fund guys,
[73]
alternative investment
funds.
[75]
And so what we've been
doing is just buying the
[76]
best of the best. We
created a 20 million dollar
[79]
fund. Card Collecting is
different from what it
[81]
was 40 years ago.
[82]
But the crash of the
90s is still haunting.
[84]
Card makers and collectors
are determined to
[86]
avoid repeating their mistakes
and cash in on
[89]
this popular
alternative asset.
[91]
I think cards are
definitely having a moment.
[93]
But if you take a long
term view of this, the
[96]
cards are here to stay from
a from as an asset
[99]
class.
[109]
If you were a kid growing
up in the 80s and 90s,
[112]
more than likely you
collected baseball cards and
[114]
your father told you they'll
one day be worth a
[116]
lot of money. That's because
your father saw his
[119]
card collection from when he
was a kid become
[121]
valuable in the 1970s when
a generation of boys
[124]
came of age and
rediscovered their card
[126]
collections. For example, in
the late 1960s, a
[130]
1952 Topps Mickey Mantle
card, considered one of
[134]
the greatest vintage cards of
all time, was worth
[137]
about a dollar. A decade
later, it was worth
[140]
about a thousand dollars.
[141]
In 2006, a near perfect
version of this card sold
[145]
for near two hundred
eighty three thousand
[147]
dollars. And in twenty
eighteen, a similar card
[150]
sold for just shy of
two point nine million
[153]
dollars at auction.
[155]
A lot of people in my
age in their mid 40s, you
[158]
know, we grew up in
the 1980s and the baseball
[161]
card boom and going
to going to shows.
[163]
So there are a lot of
a lot of adults out there
[166]
now in my age range
that grew up collecting
[170]
baseball cards and enjoying
it and having fun
[172]
with it. It's difficult to
put an exact value on
[174]
the card industry
at its height.
[176]
But David Liner of the
Topps Company says around
[179]
its peak in nineteen
ninety one, sales were
[181]
between one and two billion
dollars in a given
[184]
year. What's hard is if you
look back at the late
[186]
80s and the early 90s, it
was really a boom about
[189]
baseball cards.
[190]
It was less so about the
NBA, NFL and the NHL,
[193]
which today are
much bigger properties.
[196]
And then the industry crashed
all the cards ni帽os
[199]
kids collected worthless.
[201]
That bubble is
driven by oversupply.
[204]
Well, restricted
supply initially.
[206]
And then it burst when
the company said, you know
[209]
what, we're going to make
two million of these
[211]
Ken Griffey rookie cards but
tell people that it
[213]
was much fewer. Most of
my friends were similar
[216]
ages in the 30s, 40s,
like our collections are
[218]
frankly worthless from that
period of time.
[220]
And that that's why
is the card companies,.
[222]
About 20 years later, those
same kids grew up and
[225]
began revisiting their
old card hobby.
[227]
In nineteen ninety six, That's
when the junk wax
[231]
era, the mass
production era ended.
[232]
In nineteen ninety six was
the first year where
[234]
they really started serializing
our cards and you
[237]
started getting
real scarcity.
[239]
The reason that's really
important is that people
[241]
who grew up in nineteen
ninety six, they were
[243]
about eight to 10
years old collecting now
[246]
they've reached
disposable income.
[248]
Right. So all the cards that
I wanted when I was
[250]
a kid that I couldn't
afford, now that I'm
[252]
working and I have
some disposable income, people
[254]
like me are like I want
to go and finally buy
[257]
that. The industry had
seen some major changes.
[259]
In the late 1990s,
card grading became popular
[262]
for a fee. Companies like
PSA, Beckett and SGC
[266]
rate cards on a scale of
one to 10, taking into
[269]
account the quality and
rarity of the card.
[272]
The higher the grade,
the higher the value.
[274]
It's a commodity. People
know the general rating
[277]
when the age is
going to go for.
[279]
It allows a lot of people
to buy and sell trading
[283]
cards sight unseen that
change the industry more
[286]
than anything else. When I
was a kid, rating
[288]
wasn't a thing like you'd
walk into a card shop
[291]
or a card show and By
raw cards, which just means
[294]
cards that were pulled out
of a pack and they're
[295]
in some little spinny
sleeve or whatever.
[297]
You know, I got cards graded
in the late 90s when
[299]
I was a teenager, when
these companies were just
[302]
getting going the concept
of having a official
[305]
grade like its mentor
or instrument or whatever,
[308]
and then it's authentic,
I think is very
[309]
critical. The card
makers went through
[312]
consolidation and sports
leagues, signed
[314]
exclusive deals with
one card company.
[316]
Today, Topps produces cards
for Major League
[319]
Baseball. Panini has the rights
to the NBA and
[321]
NFL and the NHL is
signed with upper deck.
[324]
These brands further
increased exclusivity by
[327]
offering limited edition cards
better known as
[329]
hit cards. Finding a rare
card that includes an
[332]
autograph or a piece of
a player's jersey could
[334]
instantly be worth five
or more figures.
[337]
All of the manufacturers, we
are all well aware of
[341]
what happened in the
eighties and nineties, and
[343]
not wanting to
repeat those mistakes.
[345]
our licensors, Major League
Baseball, the NFL,
[348]
NBA, they are
all well aware.
[350]
Also, it's not over licensed
for the most part.
[354]
We're able to manage within
our lane of those
[356]
four licenses to ensure
that we're creating great
[359]
products that will resonate
for years to come.
[362]
In the early 2010s, Breaking
started to gain a
[365]
following online.
[366]
It offsets risk when
buying unopened cards and
[368]
has amassed a following
on YouTube and Twitch.
[371]
That box sells five hundred
dollars and you've got
[373]
ten packs in the box so
people can buy slots in
[376]
that box. That said, everybody
can buy a pack and
[378]
the person opens up. How
could this package for
[380]
this person got Brian
Podres, Michael S
[383]
Nationals', Kamron M Royals',
Michael C res and
[386]
it's all done online.
[387]
It's all done up front
in front of the camera.
[389]
And you don't know what
you're going to get. You
[390]
know, you're going to get
a pack in that box.
[391]
So somebody may get
something worth twenty five
[393]
dollars. Somebody may
literally get something
[395]
worth fifty
thousand dollars.
[397]
Logo man patch auto
one of one.
[401]
Look at that change.
[403]
Oh, dude, somebody has to
get rich on the stream,
[408]
breaking to the trading
card community is our
[410]
version of eSports, and
it's great and everybody
[414]
knows everybody I know.
After an injury landed
[416]
Rich Leighton at home for
an extended period of
[418]
time, he rediscovered his
card hobby and stumbled
[421]
upon breaking.
[423]
I haven't collected since I
was a kid and cards
[426]
and changed a bit, I saw a
relic of I got a relic
[429]
card with a piece of
game used jersey inside of
[431]
it. I received an autographed
card in the box and
[434]
I was blown away.
[436]
Those things did not exist in
the mid to late 80s
[440]
when I was collecting
when I was younger.
[442]
One thing led to another.
[444]
This took me
onto YouTube.
[445]
I even came across a
couple of people that called
[448]
themselves Breaker's and I saw
their videos and I
[452]
thought to myself, Man, I
feel like this is
[454]
something that I
could do well.
[456]
Rich founded Leighton Sports Cards
in 2012 and has
[459]
been breaking cards
ever since.
[461]
The company has eleven
full time employees,
[463]
boasts one of the
top YouTube channels for
[465]
breaking with over
thirty thousand subscribers
[468]
and nearly doubled their
sales each year since
[470]
the start. The jump
from twenty nineteen to
[474]
twenty twenty. This current
year we're expecting
[477]
to double our
sales again.
[480]
This year, We have not
stopped demand for our
[483]
breaks and the demand for
products and the demand
[486]
for just sports cards
in general on all
[490]
markets and all facets of
the industry as has
[494]
never been better, at
least since since we
[496]
started in 2012.
[498]
It's never been better.
[500]
This past decade, people in
the sports card world
[502]
noticed a significant increase
in value and
[505]
demand. I noticed the
industry really taking off
[507]
in twenty sixteen.
[508]
We really noticed a giant
jump in doing the amount
[513]
of breaks and doing the
amount of product really
[516]
in the beginning
of twenty seventeen.
[518]
The trading card business
has been growing
[520]
significantly the past five
or six years.
[523]
What we've seen in the
last six months during the
[525]
pandemic has been an
acceleration of that growth.
[528]
People are stuck at home
and looking for things to
[530]
do. So they're getting back
into maybe hobbies or
[533]
interest of theirs
and collections.
[535]
There's no sports on TV
at the time and they're
[538]
not spending time or money
on going out to dinner
[541]
or going on vacations
at that time.
[543]
So it looks like more
people are putting their
[545]
money into into collectibles
and in their
[547]
hobbies. I mean, heading
into before covid, if
[551]
you will, in January and
February of this year,
[553]
we were hitting record
numbers for our business
[556]
already. When covid started
and people had to
[559]
stay home, we took off
even more from there.
[562]
In a pandemic, you'd think
that business would be
[564]
slow. And right now it's
the best it's ever been.
[569]
Obviously, we would rather
have a healthy
[570]
country, but you know
we're here to take
[572]
advantage of it as much
as we possibly can.
[575]
But overall, I would say
the market, whether it's
[578]
a card and autograph game
used jersey, bat things
[583]
have gone up a lot.
[584]
Then ESPN moved the release
date of the hotly
[586]
anticipated Michael Jordan
documentary series,
[589]
The Last Dance from
June to April.
[591]
The Last Dance was a
very well timed documentary
[595]
released when we were
all starved for sports.
[598]
There was nothing, you
know, 20 plus years
[600]
removed from Jordan's kind of
his last three peat
[604]
in ninety seven, putting a
lot of his highlights
[606]
out there and kind
of reinvigorating the debate
[608]
to see the greatest of
all time missing LeBron
[610]
James. But I think the
last dance brought a lot
[612]
of nostalgia back and
really showed a new
[615]
generation how significant Jordan
was to to the
[618]
game of basketball. The
last dance became the
[620]
highest rated documentary
in ESPN history.
[623]
It brought
back nostalgia.
[625]
It brought back memories
of the greatness of
[626]
Michael Jordan and his
cards and memorabilia
[629]
started going up.
[630]
And in our industry, it
is definitely a case
[633]
where rising tides
lifts all boats.
[635]
If a Michael Jordan
rookie goes from forty
[638]
thousand one hundred
thousand, then Charles
[640]
Barkley rookies are going
to go up.
[641]
Kobe Bryant rookies are
going to go up.
[643]
LeBron James rookies are going
to go up, Steph
[645]
Curry rookies are going to go
up and so on and so
[647]
forth. Sales of Michael
Jordan cards on eBay
[649]
increased over three
hundred seventy percent
[652]
after the film's release.
[653]
And eBay has seen an
average of three basketball
[655]
cards sold every minute
on the platform.
[658]
Out of all the
stuff that's seen, significant
[660]
increases in twenty twenty
and that we handle
[663]
Michael Jordan's percentage wise
has seen them
[665]
the most. In the months
after the release of The
[668]
Last Dance, several basketball
cards sold for six
[671]
figures or more at auction,
two of them a LeBron
[674]
James rookie card and
a Giannis Antetokounmpo
[677]
rookie card for one
point eight million dollars
[679]
each the buyer leader Avodart
and Alt fund one.
[684]
For the fund, Try to
get really good lighting
[688]
this, this is the
multimillion dollar LeBron card
[691]
that we purchased. This is
the best LeBron card.
[694]
And then and this is
obviously our favorite card.
[699]
This is the Giannis's card,
these are the two
[702]
most expensive basketball cards
in the world that
[705]
have publicly traded. How much
are we holding in
[708]
your hands right now? I
would say well over five
[711]
million dollars, at least
in today's market
[713]
value. I mean, people
have been speculating that
[715]
this one is already in
its self worth over five
[718]
million dollars. Leore Avidar
has been a
[720]
collector most of his life,
owning some of the
[722]
most valuable Kobe
Bryant cards.
[724]
I am a Kobe collector,
like through and through.
[726]
So my collection is like
ninety nine percent Kobe
[729]
Bryant, I would say.
[731]
I think I have the
most high end Kobe Bryant
[733]
collection in the world.
For years, he's believed
[736]
sports cards are part of
the modern age of
[738]
alternative assets or
culture assets.
[741]
A culture asset, There's three
things that go into
[743]
it. So the first
is there's nostalgia associated
[746]
with it, right? Like, I
mean, Kobe Bryant, I feel
[748]
attached to him. I really
want something that I
[750]
can be part of his brand.
[752]
The second one, these things
are really made very
[754]
well. It's a
great picture.
[755]
It's a great pose. It
is a piece of art.
[757]
And then the last part
is like it is an
[759]
appreciating asset given the
scarcity of these
[762]
assets. And so together
you get this magical
[764]
being called what again, as
I said, a culture
[767]
asset with greater
awareness of inventory,
[769]
limited edition cards and
a formal grading
[772]
system. This new era
of card collecting proved
[774]
select cards could be a
serious way to diversify
[777]
one's investments.
[779]
Back when cards
were five dollars.
[780]
It was hard to kind of
you physically had to have
[782]
many of them to have
any sort of value, valuable
[784]
collection. Nowadays you can
have 10-20 cards and
[787]
have significant portion of
your net worth in
[790]
sports cards as
an alternative asset.
[792]
And so I think there's
also people treating it as
[793]
like a long
term investment.
[795]
One of the things that
we hear constantly is that
[799]
people appreciate people like
the idea that these
[802]
collectibles are
tangible.
[804]
They can get an item, they
can hold it, they can
[808]
enjoy it. They have some
safe store of value and
[812]
they get a little bit more
than they would out of
[815]
company stuff. Babe Ruth
isn't going to do
[818]
anything tomorrow that's going
to hurt the value
[821]
of his collectibles.
[822]
On the financial
side of things.
[823]
I think we've had such a
bull run over the last
[825]
ten years that people
are looking to diversify
[827]
their assets and also just
find ways to make more
[830]
yield or just return.
[832]
The stock market over the
long run makes around
[834]
seven percent. People want to
take a lot more
[837]
risk, especially early on
when they're young.
[839]
And so you're finding
people thinking about, OK,
[842]
I guess I can make
seven percent in the stock
[843]
market, but where can I
make one hundred percent?
[845]
Where can I make, you
know this is why
[847]
cryptocurrency became
really big.
[849]
And so you're seeing
people start speculating.
[851]
So you're seeing a lot
of people move into
[853]
alternative assets because, again,
they want to
[854]
make those
higher returns.
[856]
For Leore, He saw this
trend and realized there
[858]
was no way for people
to manage and track the
[861]
value of their
alternative investments.
[863]
So he founded ALT.
[864]
I've been investing in
alternative assets now
[866]
heavily since twenty sixteen,
and I've basically
[869]
run into all these
problems at scale.
[871]
And so ALT is really
a solution to all those
[874]
problems. So the first
problem that people run
[876]
into is what is
my asset worth?
[879]
And so you can put in
a card and they'll tell you
[880]
exactly how much
it's worth.
[882]
So you can see everything
all in one place.
[884]
It feels very
much like fidelity.
[885]
The second problem
is around insurance.
[887]
These are hard
assets, right?
[889]
So we've created a
dynamic insurance product
[891]
where you can
upload your collection.
[893]
Mostly you're just managing
it, but you click
[895]
insure and you're always insured
up to the alt
[897]
value, which is kind
of like our proprietary
[899]
estimate or Kelley
Blue Book.
[901]
And then the last
piece is around liquidity.
[904]
And so for the first
time, you can actually take
[905]
a loan against
your entire collection.
[907]
Not only did you create
the platform, but he also
[910]
created alt fund one,
a twenty million dollar
[913]
investment fund for
sports cards.
[915]
The fund has already
purchased over one hundred
[917]
cards and is up
thirty five percent since
[920]
September. You are
creating a diversified
[922]
portfolio of I would
say seventy five percent
[924]
basketball. Twenty five
percent football.
[927]
There are some speculative bets
in there as well
[930]
as people who have
already hit their career
[931]
accolades like Michael Jordan,
LeBron James, Kobe
[934]
Bryant. Majority of the
portfolio is buy and
[938]
hold, but twenty five
percent is actually for
[940]
arbitrage. So given that we
are the best at
[943]
valuing the assets, I would
say we are in prime
[945]
position to find something
that we can quickly
[948]
buy and sell or trade
and make some good money
[951]
off of. Alt fund one
is only available to
[954]
accredited investors, but
other companies like
[956]
Collectible and Rally
allow individuals to
[959]
purchase shares of
cards and collectibles.
[961]
Leore hopes to securitize the
fund so people can
[963]
trade it like a fund
of the New York Stock
[965]
Exchange and one day display
the cards to the
[968]
public. So here is one more
card that we have not
[971]
disclosed publicly that we
just purchased, which
[973]
is the 2011 Bowmen from
Mike Trout Super Tracker.
[978]
So there is one of this
in the world and his
[979]
rookie card as well.
[981]
And if you're investing in
the fund, you get to
[983]
own own this
card with us.
[986]
The sports card industry is
hot, and it seems
[988]
everyone is profiting to
some degree, our sales
[991]
in twenty nineteen were
twenty seven million and
[995]
our sales for twenty twenty
will top one hundred
[998]
million. Our auction sales
for sports in twenty
[1001]
nineteen were just
over 70 million.
[1003]
We're poised to do over
eighty five million and
[1005]
build twenty twenty ten
auctions alone and
[1008]
support an increase of at
least 30 to 50 percent.
[1013]
When you look at a high
end car that was worth a
[1015]
thousand, now it's twenty
thousand and that's a
[1017]
lot more. Collectors and
industry experts believe
[1020]
this era is different from
the 1980s and 1990s.
[1023]
It's a pure market.
[1025]
It's just it's pure
supply and demand.
[1029]
What I can tell you at
Tops is the demand today is
[1032]
so far ahead of the supply,
we're a made to order
[1035]
business. So we start
producing our products
[1038]
months in advance. And when
the demand is super,
[1040]
super high, we never go
back on press and make
[1043]
more product. And even
those sports are back.
[1046]
Card collecting is
not stopped.
[1047]
There's even a strong
chance the most valuable
[1049]
card record will be broken
in the near future.
[1052]
I can tell you this
the Luka Don膷i膰, Logoman just
[1054]
sold privately for thirty
three point two dollars
[1056]
million and not a lot
of people know about.
[1058]
So they're accelerating
pretty quickly.
[1061]
I will say we will
see our first ten million
[1063]
dollar card in the
next two years.
[1065]
There's no market that's just
going to only only
[1068]
go up. And so are
there going to be corrections
[1070]
in this market? I suspect
there will like any
[1072]
other, but I don't think
I don't think that the
[1075]
corrections are going to
be as significant as
[1077]
they will be in
more traditional markets.
[1079]
Whether you are an
investor, collector or breaker.
[1081]
It's a good time to be
in the business of small
[1083]
pieces of cardboard.
[1085]
It's always hard to say
where does this industry
[1087]
go? The pandemic has
definitely helped have a
[1090]
step change in
the growth.
[1092]
And I think as long
as the manufacturers do a
[1095]
good job of creating products
with value that are
[1098]
high quality, that resonate
with consumers, I
[1101]
think we'll do a much
better job of sustaining
[1103]
this growth for many
years to come.
[1105]
There aren't as many shows as
there used to be in
[1107]
the eighties or as many
brick and mortar stores.
[1109]
But the shows that are
left and the brick and
[1111]
mortar stores that are left
are using the digital
[1114]
platforms to involve the
same amount of people,
[1118]
if not more people that
were involved in this
[1120]
hobby in
previous generations.
[1122]
So all those things are
coming together to really
[1125]
make it a vibrant
and good market.
[1127]
But I think it really
traits back to this just
[1130]
cycle of collecting. Things
become vintage every
[1132]
year. Thirty, twenty five,
thirty years ago,
[1134]
whatever was produced then is
now vintage and it
[1138]
cards isn't the aren't
immune to that.
[1140]
The cards that you're opening
today with your son
[1141]
or daughter that I'm
opening, I can't imagine
[1143]
they'll be worth anything
in twenty years, but
[1145]
they probably will be.
So keep them.
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