Sports collectibles conventions fulfill an incredible role in the hobby of collecting sports cards and non-sports cards. These are fun-filled gatherings that bring together collectors, card dealers, service providers and flippers all under one roof. There are also trade nights for those who want to wheel and deal cards to others. Each show features millions upon millions of dollars worth of cards from vintage, modern, common, super-stars, and even incredibly rare cards you just might not see that often. These shows are an absolute blast. But…
After the economy was completely reopened in 2022 the sports collectibles promoters flooded the calendar with big card shows. And as 2023 comes into a keen focus, the reality is that there are just too many card shows! Some cities and regions are flooded with card shows. Others remain underserved, and some of the states that had overly restrictive pandemic policies in place are now getting more shows lined up for 2023.
There Really Can Be Too Much of a Good Thing!
After attending what will have been 18 card shows (spanning about 40 days) in 2022, there is a recognizable pattern that emerged. Modern cards prices have splattered after falling off the roof in 2021. Now many dealers are hoping that vintage cards will act like “blue chip stocks” and hold their value. But, regardless of what genre you collect, what do the mathematics look like when there are too many card shows in the same region all stacked together? Card prices do not have flop going forward. Some will absolutely rise. But they cannot all rise at a blistering pace and there may be too many card shows for dealers and buyers to be able to choose from.
Deja Vu All Over Again!
The first thing that happens is that collectors are now seeing the same cards over and over at dealer booths. It’s not just the economy slowing down and it’s not just that groceries and gas cost way more after 8% inflation. The community of collectors is still active but they have gone back to spending more on events and being out rather than staying in and spending endlessly on their collectibles and their hobbies. Just look at any of the “stay at home stocks” and how their stock prices did in 2022 — likely in the toilet! Going to the same card show every two months or so leaves you with a constant feeling of Deja vu. The reality is that you have seen those cards before, probably more than once.
The Math of Impossible Prices
Many of us in the hobby feel that sports cards and collectibles, particularly at the high-end, have become an alternative asset class. Frankly, it’s undeniable at this point. Dealers have to operate at margins that are arguably between 20% and 30%. Some margins are of course much higher, like on low-priced cards. And some margins are much lower, like in high-priced cards. But by and large do the math of any one specific card starting out at $100.00 magically being bought, sold and traded four times in a year at a 20% profit. Without the math including any taxes, transport and shipping costs.
In January the card sells for $100.00 and it then sells for $120.00 in March or April, the dealer keeps $20.00 as a gross profit. The next person in line who bought the card because the it seemed cheap sells the same card looking for a 20% profit in April, and the $144.00 price tag implies a $24.00 profit to the first buyer. The second buyer who paid $144.00 also feels like he got a deal decides that he wants to unlock the value in his card and in July decides to sell to another buyer for $172.80 and unlocks a $28.80 gross profit. Now this third buyer decided that his card price of $172.80 was still a good deal even though prices sure have risen a lot – so he wants to make a 20% profit and sells the card back to a dealer in October and this dealer, who is certain the card will sell for more, pays the card owner $207.36 knowing that he can sell it for $250.00 next year. Now keep doing this math even at one or two flips per year. Does any asset rise like that indefinitely?
Losses are Happening
You already saw the math of a card flipping 4 times at a 20% implied margin. On top of that being unsustainable, many card prices have fallen. Sure, there are many cards which are very scarce and have only risen in value each time they are bought and sold. But modern era cards and many “lesser Hall of Famers and common cards” within vintage have also seen prices and demand soften. Some dealers may not have price tags that reflect it, but that is happening in auction and sale prices. This means that collectors and dealers made the wrong bet on some of their cards this year or last year. And if you buy and sell any asset for a very long period of time, you just have to accept that losses are part of the game. But what happens when you are facing losses hand over fist and this is your primary source of income?
While Babe Ruth, Ty Cobb and Honus Wagner cards have remained firm, the losses in some modern cards have been staggering. Players like Michael Jordan, LeBron James, Kyler Murray, Fernando Tatis (Jr.), and many others have witnessed drastic price drops and this hurt many dealers. This was even true for the great Tom Brady and Patrick Mahomes.
Junk Wax Redux?
The public by and large does not know exactly how many modern cards are being printed. One common estimate is that the Topps 2022 baseball card set, for base cards only, had a print run of about 750,000 cards each. That means that any hot player in baseball could have 750,000 cards for the public to absorb. There is never just one hot player, and there will be newer and newer hot players each and every year going forward. The print runs are simply overwhelming.
Oh, and for manufactured scarcity, there are often 15 or 17 parallel cards with shiny surfaces or different colors. Some are signed, some are not. It’s a daunting task to even keep up with, so many collectors and dealers in the hobby simply stopped trying to keep up with the universe of parallels.
This may not really be a problem that is specific about there being too many card shows, but it is a problem for the hobby and dealers and collectors are having a hard time keeping up with the supply of new cards. Some of us have even given up trying!
Is Fewer Flippers Good or Bad?
At shows in 2021 and earlier in 2022 there were countless numbers of people who simply buy and sell cards in rapid-fire transactions at shows (and online and elsewhere). There are still many people doing this, but the number of flippers sure looks lower throughout 2022. Perhaps the cost of gasoline, food and hotels has a role in this. Either way, one common theme is that many of the flippers know they cannot show up to 5 or 6 shows at the same venue in the same year and be successful. And before you bash the flippers, what do you think is a huge source of supply for card dealers looking for new inventory — it’s from flippers.
Dealers Are Complaining
I have asked dozens of card dealers what they think of the hobby right now. There is not any single unanimous view, but one common complaint from dealers is that they just cannot keep with 4 to 6 shows at the same venue in the same year. There are many great shows around the country, and the frequency of some shows is now interfering with dealers from being able to go to other shows. What happens when a great show is happening in Texas the same weekend that a show is happening in the Northeast and the Midwest? You can only be in one place at any time.
One dealer even joked about it in this way — “Man, I am seeing everyone here more than I am seeing my family!” If you do not live in the same city, you are likely to spend $75 to $100 in gasoline, $200 or more for a safe hotel room each night (times 3 or 4) and then there is the cost of food and the high cost of the tables. It all adds up and it’s easy to see how one venue could become a $10,000 or much more annual expenses.
Grading Companies Are Starting to No-Show at Shows!
We all knew about the grading craze and backups in 2020, throughout 2021, and well into 2022. That is not entirely over, but prices for grading have begun to almost normalize gain. Grading times have come down drastically. And the public has become smarter and more discerning knowing that not every card will get a high grade just because they are hoping for it.
This all means that the major grading companies have figured out they simply cannot attend every card show in a profitable manner and logistically. And if it’s not profitable, they aren’t even using a show as a loss-leader to keep their brands front and center to collectors. This is a service that many collectors need. But what does a no-show from major grading companies at the shows tell you?
Slower Card Flows for Dealers
Outside of flippers, there are other sellers who may have been sitting on cards in a box or a binder for years. Some of those cards were sent in for grading over the last couple of years. And virtually now all of those cards have more or less been returned from the grading companies to their owners. The owners of these cards probably read a few hundred times that cards and other collectibles surged in value after the start of the pandemic. Many of these people know that prices have come down for many cards and collectibles.
Some dealers are voicing now that they are seeing fewer quality cards (key point is quality) being brought to their tables to be sold. Others are still seeing great quality cards and items being presented to them. And in that theme of quality, if the supply isn’t being hurt the sellers have unrealistic price expectations because they are hanging on to 2021 prices.
Stars Flopping and Being Injured Doesn’t Help
In modern cards, a player’s weekly performance can greatly impact the price of their cards. Dealers and collectors alike cannot control a player’s actions on and off the field. That means that injuries, scandals, suspensions and outright disappointing performance can make card prices crater. Some dealers currently will outright refuse to buy certain player’s cards because they have lost enough money in them.
Bad seasons happen. Injuries happen. And let’s just say that athletes have a reputation of getting into their share of scandals and trouble with the law when they are not at practice or in a game. That of course has nothing to do with how many shows are being held, but some of these superstar player card prices have come down 60% to 80% from their peak a year earlier. And some dealers are betting on the fallen angel players too — let’s see if those show prices work out in their favor in 2023.
More Empty Tables
Dealers know that some sports collectible shows have more sellers wanting space than the venue can allow. That may be from others seeking new venues and it may be from newer dealers. This doesn’t sound like there are too many shows on the surface, but… What is being seen more often now is that some dealers are simply paying for their table (or tables) and they are not showing up at all or they are only setting up for a lower number of days.
Some shows are Thursday night through Sunday, and if you have a career outside of collectibles and a family it’s just not feasible for some people to be able to set up. And dealers do not want to be bumped from the list of dealers for the next show, so they are often willing to pay for their spot and eat the expense rather than showing up at every single show at the same venue.
Inflation and a Recession?
Some of us have been using the argument that a recession was already underway in 2022. Others argue that perhaps the recession is really more of a 2023 issue. Either way, the slowing economy has not been up for debate. And drastically higher prices have become an issue for many aspects of discretionary spending. If dealers and collectors know there is another show in the same city or are in 6 to 8 weeks, they may justify skipping a show to have more cash and cards for the following show.
Recessions are generally not good for discretionary spending items, and having too many shows may only cause some of the price/demand issues to stand out more than if there were fewer shows creating much more hype.
What’s on the Books for 2023?
There is a lot to look forward to in 2023. There is also a lot to worry about in 2023. Will some of the fallen angel athletes get their wings and halos back? Will the economy hold up? Will rising unemployment translate to fewer card buyers (or more sellers)? Will grading costs and timelines be fully normalized throughout 2023? All of this remains to be seen. What doesn’t remain to be seen is that there are already over 60 large scale sports collectibles shows on the books for 2023, and there will likely be dozens to hundreds of other card shows in smaller venues and smaller cities that are trying to get on the books right now.
In the End, Does It All Matter?
OK, so I have laid out my case and points and some general issues in the hobby right now at the end of 2022. This all comes with an admission that some people (not even the show promoters) will take issue with some or all of what was laid out. That’s what makes a ballgame right? And I could have also mentioned auctions, stores, events and so on. I personally feel there are too many sports cards and collectibles shows as we get a picture of what 2023 will look like versus what the economic forecasts look like. Some cities are now overly represented with card shows. Other cities and regions are under-represented in the number of shows in a given year.
I am personally looking forward to hitting the shows around the country in 2023. That said, I am planning to drastically lower the number of shows I attend in Texas and intend to visit more shows in other states and regions in 2023 to expand my base of dealers and collectors who have to remain closer to their home bases. I already have 10 shows scheduled for the first half of 2023, and I hope to load another 10 shows on the books by the time 2023 actually gets here.
Stay tuned for a preliminary 2023 show calendar. And if you are a show promoter or card dealer attending a show please feel free to reach out with the show’s information and website so I can get it on the 2023 full calendar. Send an email to editor at collectorsdashboard dot com to get your shows on the calendar.