Baseball may be America’s Pastime. Baseball is also the pinnacle for sports cards and sports collectibles. Football cards have now been overtaken by basketball cards in popularity, particularly if you take a middle-aged guy named Tom Brady out of the equation. Modern era baseball card collectors now face big risks due to the MLB lockout. The good news: this is not yet set in stone. A work stoppage and lockout does not equate a baseball player strike, but it could all add up to the same disaster fans and for modern era sports collectors.
The 2021 MLB lockout has arrived. No one yet knows what this lockout will mean for the 2022 baseball season. Collectors Dashboard is a site dedicated to collectibles as an alternative asset class. Simply put, our main focus is what the impact may be to the hobby of sports collectibles. And by wanting more transparency it also means being honest about what this could mean for collectors.
It is important to keep in mind that the crazy prices that were logged in February of 2021 have significantly come under pressure in modern era and current player sports cards over the course of 2021. There are exceptions of course, and no collector or modern era sports investor should have ever thought that card prices can only go up in value. You don’t get any guarantees investing in stocks and bonds, so cardboard hero chasing gets no assurances either.
Modern era baseball card collectors paid a major price by overpaying for the mass-produced cards in the Junk Wax Era in the 1990s. That Ken Griffey Jr. “rookie chase” has so many cards graded (and a massive phantom population under the graded cards) that it is amazing anyone bothers to still buy the card. So, what about the countless numbers of graded cards of Shohei Ohtani, Mike Trout, Vladimir Guerrero Jr., Fernando Tatis Jr., Juan Soto and a dozen other players who are still playing the game and have some rookie cards with astronomical values? Max Scherzer’s $43+ million annual value just blew past Gerrit Cole’s value, and player salaries at the top keep setting astronomical values.
Make no mistake here. The players do have some very legitimate arguments. The owners also have legitimate arguments. The MLB minimum pay for any player on the roster is now $570,500 and some players clear more than $10 million per year. This seems to get lost in the case of CEO pay and when politicians bring up the wealth of Jeff Bezos and Elon Musk. Baseball teams collectively lost billions in 2020’s abbreviated pandemic season as games were played with no fan revenue at all. Many teams still faced issues locally early in 2021 depending on their state’s COVID guidelines.
This lockout is not about handing out participation trophies, nor is about coaches offending grown men when they are being yelled at over performance. This is all about money. Of course it’s all about the money. How will fans and collectors react if this lockout goes well into 2022?
The Tampa Bay Times listed a basic “key proposals” list that is up for debate in the negotiations. Forbes’ Mike Ozanian noted that MLB Teams lost $1 billion in 2020, on a $2.5 billion profit swing. He also noted that players saw base wages for their 40-man rosters fall by $2.5 billion in that year.
With this being December, there is still a long time until the 2022 season begins. That means this could have no impact at all for fans and The Hobby of baseball cards and sports memorabilia. Then again, what if the 2022 season is shortened again? or what if it is missed entirely? How will season ticket holders react if they get caught holding the bag?
This all sets up a precarious situation for those of you who wheel and deal in modern players who are in the 20s and 30s. These players are all at risk of injuries, suspensions, scandals and other things that can make the value of a PSA 10 grade go from $500 to $200 in a short period of time.
The good news here is that vintage baseball cards should hold up better than modern era cards if baseball is impacted in 2022. The bad news is that it can never be good for collectors and fans if the public decides that they don’t want to support their favorite teams and/or their favorite players.
Public sentiment may swing. The public doesn’t really feel sorry for a bunch of billionaire owners, and the current wealth bashing trend is already being seen in social media posts. That same public may just as easily not be very sympathetic when a player’s minimum pay is $570K and when some players are making tens of millions of dollars. That frustration is also being seen on social media postings.
Collectors Dashboard has published the letter issued by Robert D. Manfred, Jr., MLB’s Commissioner in full. We have also published the rather short statement from MLBPA Executive Director Tony Clark, as well as the MLBPA Tweet. Before getting into all that, let’s look at an image I took at the Baseball Hall of Fame in 2019 with a reminder about what can happen to card prices in general.
(MLB Manfred) To our Fans:
I first want to thank you for your continued support of the great game of baseball. This past season, we were reminded of how the national pastime can bring us together and restore our hope despite the difficult challenges of a global pandemic. As we began to emerge from one of the darkest periods in our history, our ballparks were filled with fans; the games were filled with excitement; and millions of families felt the joy of watching baseball together.
That is why I am so disappointed about the situation in which our game finds itself today. Despite the league’s best efforts to make a deal with the Players Association, we were unable to extend our 26 year-long history of labor peace and come to an agreement with the MLBPA before the current CBA expired. Therefore, we have been forced to commence a lockout of Major League players, effective at 12:01am ET on December 2.
I want to explain to you how we got here and why we have to take this action today. Simply put, we believe that an offseason lockout is the best mechanism to protect the 2022 season. We hope that the lockout will jumpstart the negotiations and get us to an agreement that will allow the season to start on time. This defensive lockout was necessary because the Players Association’s vision for Major League Baseball would threaten the ability of most teams to be competitive. It’s simply not a viable option. From the beginning, the MLBPA has been unwilling to move from their starting position, compromise, or collaborate on solutions.
When we began negotiations over a new agreement, the Players Association already had a contract that they wouldn’t trade for any other in sports. Baseball’s players have no salary cap and are not subjected to a maximum length or dollar amount on contracts. In fact, only MLB has guaranteed contracts that run 10 or more years, and in excess of $300 million. We have not proposed anything that would change these fundamentals. While we have heard repeatedly that free agency is “broken” – in the month of November $1.7 billion was committed to free agents, smashing the prior record by nearly 4x. By the end of the offseason, Clubs will have committed more money to players than in any offseason in MLB history.
We worked hard to find compromise while making the system even better for players, by addressing concerns raised by the Players Association. We offered to establish a minimum payroll for all clubs to meet for the first time in baseball history; to allow the majority of players to reach free agency earlier through an age-based system that would eliminate any claims of service time manipulation; and to increase compensation for all young players, including increases in the minimum salary. When negotiations lacked momentum, we tried to create some by offering to accept the universal Designated Hitter, to create a new draft system using a lottery similar to other leagues, and to increase the Competitive Balance Tax threshold that affects only a small number of teams.
We have had challenges before with respect to making labor agreements and have overcome those challenges every single time during my tenure. Regrettably, it appears the Players Association came to the bargaining table with a strategy of confrontation over compromise. They never wavered from collectively the most extreme set of proposals in their history, including significant cuts to the revenue-sharing system, a weakening of the competitive balance tax, and shortening the period of time that players play for their teams. All of these changes would make our game less competitive, not more.
To be clear: this hard but important step does not necessarily mean games will be cancelled. In fact, we are taking this step now because it accelerates the urgency for an agreement with as much runway as possible to avoid doing damage to the 2022 season. Delaying this process further would only put Spring Training, Opening Day, and the rest of the season further at risk – and we cannot allow an expired agreement to again cause an in-season strike and a missed World Series, like we experienced in 1994. We all owe you, our fans, better than that.
Today is a difficult day for baseball, but as I have said all year, there is a path to a fair agreement, and we will find it. I do not doubt the League and the Players share a fundamental appreciation for this game and a commitment to its fans. I remain optimistic that both sides will seize the opportunity to work together to grow, protect, and strengthen the game we love. MLB is ready to work around the clock to meet that goal. I urge the Players Association to join us at the table.
(MLBPA Clark) Statement:
“This drastic and unnecessary measure will not affect the Players’ resolve to reach a fair contract. We remain committed to negotiating a new collective bargaining agreement that enhances competition, improves the product for our fans, and advances the rights and benefits of our membership.”
The MLBPA Tweet does have more meat to it than the official statement on the MLBPA site and the link to it and the image have been provided here.
