馃攳
Why Investing in Sports Cards Is Taking Off | Niche Markets | WSJ - YouTube
Channel: unknown
[0]
(dramatic music)
[2]
- [Narrator] The market for
sports trading cards is booming.
[5]
- Sports is a lot of people's escape.
[7]
Why not invest in a player as opposed
[10]
to investing in stock?
[11]
- [Narrator] The top
25 most expensive cards
[13]
in history were sold
in the last two years,
[16]
including an Honus Wagner card sold
[19]
for over $6.6 million.
[21]
- A lot of us were holding
on these cards for 30 years,
[23]
hoping some day that
they'd be worth something,
[25]
hoping some day I could say I told you so.
[27]
- [Reporter] Big time
investors like hedge funds
[29]
are also in on it.
[31]
They've begun buying trading cards
[33]
as alternatives to equities.
[35]
- It's culture as an asset,
it's nostalgia as an asset.
[38]
- [Narrator] So how did
trading cards balloon
[40]
into a multi-billion dollar industry?
[43]
And why are both everyday people
[45]
and big name investors
turning to trading cards
[47]
as investment assets?
[50]
This is Niche Markets,
[51]
a series that examines
small, lesser-known markets
[54]
that despite their size,
punch well above their weight.
[58]
- In front of us, we
have a bunch of cards,
[60]
one of 'em being as early as the 1934.
[64]
A famous card called the Goudey,
[66]
all the way down to Honus
Wagner and Joe DiMaggio.
[69]
We believe that they are authentic.
[70]
We'll send them in to get graded.
[72]
- [Narrator] To verify
a card's authenticity
[74]
and determine how much it's worth,
[76]
today's card owners rely on
a practice known as grading.
[79]
Collectors send their
raw or ungraded cards
[82]
to grading agencies where
their cards will be examined
[85]
and assigned a 1 through 10 grade.
[87]
Card scores are based on
four different factors:
[90]
centering, corners, edges and surface.
[94]
- So we ended up getting them all graded.
[95]
They all came back real.
[97]
One is the lowest grade you can receive.
[99]
That is as terrible as it comes.
[103]
There's a crease right down
the entire middle of it,
[105]
corners are all peeled up,
edges are all dinged up.
[109]
This card's probably around
a 100 to $200 card raw
[112]
but once you get it graded, it's real,
[114]
it's authenticated, it's now a one.
[116]
We now know the value.
[117]
It's around 800 to $1,000.
[119]
To know that its value is worth X or Y
[121]
because of its grade is what
really turned this hobby
[124]
into what it is now as a stock market.
[127]
- [Narrator] In the past, buyers
had to take a seller's word
[130]
on the legitimacy of a card's condition
[132]
but today thanks to
grading companies like PSA,
[136]
Beckett and SGC acting as
neutral arbiters of quality,
[139]
a card's price is much easier to verify.
[142]
- One of the things my mom always said
[144]
that I couldn't really have an answer for
[145]
was that card's not worth
$20 until you get someone
[148]
to give $20 for it.
[150]
And that's no longer true.
[152]
(pensive music)
[154]
- [Narrator] Burt Deveau, Jesse Deveau,
[156]
and Jeffrey Ferraro are the owners
[158]
of FRESHPULLZ, a trading card shop located
[161]
in the outskirts of Boston.
[163]
The three friends opened the store in May
[165]
after making a small fortune
auctioning cards online.
[168]
- We did $2 million in sales.
[170]
We should break the $3 million mark
[172]
within the next month
by the end of September.
[175]
- [Narrator] Since the
trio started their business
[177]
in March of 2020, they've
all left their jobs
[180]
in the hospitality industry,
[181]
and seen their material
circumstances transformed.
[185]
- I used to work 70 hours a week
[186]
in a kitchen and be absolutely miserable.
[188]
Now I can work 150 hours here
[190]
and it doesn't seem like 150 hours.
[194]
- [Narrator] FRESHPULLZ's
story is but one example
[196]
of card owners striking
it rich in today's market.
[199]
Since the pandemic began,
[200]
reports of former hobbyists
digging up their old collections
[203]
and discovering a windfall
have not been uncommon.
[206]
Sports cards have existed
since the early 1900s
[209]
but in the 1980s and 1990s,
[212]
prices for newer cards cratered
[214]
after manufacturers flooded the market.
[216]
- Ken Griffey Jr., his
rookie card is known
[219]
for being one of the
most mass-produced cards,
[221]
and it's just not valuable.
[223]
- [Narrator] The pandemic
also triggered a string
[225]
of deals and acquisitions that
have shaken up the industry.
[228]
Earlier this year, the investment
firm The Chernin Group,
[231]
along with celebrities like
Mark Cuban and Kevin Durant
[234]
invested $40 million in one
[236]
of the industry's
best-known auction houses,
[238]
Goldin Auctions.
[239]
This July, Goldin was acquired
[241]
by the investment group
Collectors Holdings.
[244]
- It's an exciting time for
everybody here at Goldin.
[246]
It's an exciting time for
the industry as a whole.
[249]
- [Narrator] Also in July,
[250]
Blackstone acquired a majority stake
[252]
in the grading company
Certified Collectibles Group,
[255]
which values CGC at
more than $500 million.
[259]
- These people have people to tell them
[261]
where to invest their money.
[263]
They're not telling
them to invest billions
[264]
of dollars into the card
market for it to just collapse.
[269]
- Right now I'm holding two
of my most favorite cards.
[272]
They both are a 1997 Kobe
Bryant Precious Metal Gems.
[276]
The red version, there're
100 of them in the world.
[280]
This is a PSA 5.5, this one's a PSA 4.5.
[283]
This card right her I bought for $13,000.
[285]
It's probably worth
between 160 and $200,000.
[289]
- [Narrator] Leore Alvidar
was an avid card collector
[291]
when he was younger,
[292]
especially for Kobe Bryant cards
[294]
but he didn't return to
the hobby until 2016.
[297]
- I went on eBay,
[299]
and the first box of cards that I went
[301]
and looked for was the E-X2000.
[303]
I had never gotten that
Kobe Bryant green card
[306]
that I really wanted when I was young.
[309]
And I saw that there were
different price points,
[311]
like some were selling for $30,
[313]
and there was one that
was selling for $3,000.
[315]
And I was like why is one
30 and why is one $3,000?
[320]
- [Narrator] Alvidar, who
has a background in finance,
[322]
saw opportunity in the inefficient way
[324]
in which pricing was determined.
[326]
- And I remember seeing
that the probability,
[328]
the expected value was positive,
[329]
meaning if I kept buying the boxes,
[332]
and probabilistically, I
will get the Kobe Bryant card
[334]
and then I sell it on eBay,
[336]
I'll make 10 to $20 a box.
[338]
- [Narrator] After five years
of buying and selling cards,
[341]
Alvidar turned his
passion into a business.
[344]
In March of 2020, he launched Alt,
[346]
which aims to be a sort of
Coinbase for collectibles
[349]
where users can buy and sell cards,
[351]
just like more conventional assets.
[353]
Alt brands itself as a
modern financial institution
[357]
that allows people to invest
[358]
in things they're passionate about,
[360]
just like stocks.
[361]
- When you log into Alt,
[362]
it feels a lot like Coinbase
or Robinhood or Fidelity.
[365]
In real time, you can actually see
[366]
how much your portfolio is worth.
[368]
- [Narrator] Similar to how
Zillow uses its Zestimate figure
[371]
to track home prices,
[373]
Alt created the Alt Value
to track card prices.
[376]
- The number one question
when people start getting
[378]
into cards is how much are my cards worth?
[381]
The whole point of the Alt Value
[382]
is to give people confidence
around the values,
[384]
and just increase some of the transparency
[386]
that exists in the ecosystem
[388]
but just hasn't been brought out
[390]
and democratized on the internet so far.
[393]
- [Narrator] Alt is just one of a new crop
[395]
of digital services catering
[397]
to the rapidly growing
trading card market.
[400]
Collectable and Dibbs allow users
[402]
to buy and trade
fractional shares of cards.
[405]
StarStock brands itself as a stock market
[408]
for sports cards.
[410]
- All right, guys, good
luck, good luck, good luck.
[412]
FRESHPULLZ has made most of its money
[414]
by hosting a relatively new type
[415]
of online auction called Case Breaking.
[418]
- Patriot Julian Edelman
and a Kid Reporter.
[422]
Nothing there to start.
[422]
- [Narrator] Case breaking
is essentially gambling
[424]
on unboxing videos.
[426]
A break involves groups of
collectors co-investing in a case
[429]
inside of which are packs of cards,
[431]
and then watching a
livestream of the unboxing.
[435]
- Paton, my boy, Manning, rookie.
[437]
Nice card, that's how we start off.
[439]
First box, Mojo, baby.
[441]
So there's a $2,000 box of NBA Basketball.
[444]
10 of us spend $200 and we
each get three random teams.
[448]
So let's say you have
the Celtics, the Knicks
[451]
and the Wizards.
[452]
I open up the box,
[453]
every Celtics, Knicks and Wizards cards
[455]
in that entire box all goes to you.
[457]
- [Narrator] Days later,
collectors receive the cards
[459]
they won in the mail.
[461]
Two packs left, two packs left.
[463]
- One of the things that
people asked us at first,
[464]
like why would somebody pay
you to open their cards?
[467]
And it's not that they're
paying us to open the cards,
[469]
they're having an experience.
[470]
If you take the pack home
and open it by yourself
[472]
in your bedroom, you're alone.
[473]
When you do it with us,
you're in a room full
[475]
of your friends.
[476]
- In the grand scheme of
things, it's a casino.
[478]
You're coming in here, and gambling.
[480]
Most of the people in
this world love sports,
[482]
and Fantasy Football, and gambling.
[486]
Those are the things that
aren't going anywhere.
[488]
Joshua, Kelly, Rookie.
[490]
Too bad it wasn't a damn Herbie.
[493]
I don't see the card market going anywhere
[495]
for a long, long time.
[497]
Van Jefferson.
[498]
The card, Purple Star.
[502]
That is fresh.
- That is dope.
[505]
(pensive music)
Most Recent Videos:
You can go back to the homepage right here: Homepage