A Sports Card Recession Guide

The sports card industry may be primarily a hobby. However, it is also an investment. As a consumer-driven industry, sports cards are susceptible to all the highs and lows of the rest of our economy. The economy is still growing, and unemployment is spectacularly low. But serious headwinds are coming. For example, inflation is at a 40-year high, and the Federal Reserve is tightening interest rates. That economic environment is often associated with a recession or a severe slowdown. Therefore, we have prepared the sports card recession guide to help you through what could be a difficult time.

Is There A Recession Coming?

Want a recession-proof classic? Look on eBay for Mickey Mantle cards that always seem to appreciate in value. 

That is a question for our top economists rather than a sports card website. However, there is an increasing sense of pessimism in the country. A poll taken among CFOs found that none of the individuals participating believed that the slowdown could be avoided. Pessimism can be a self-fulfilling prophecy. After all, it becomes real when everyone acts as if there is a recession. During a full-on recession, Hiring stops, investments dwindle, and consumer spending slackens.

Why so much pessimism? The high inflation plaguing our country is the main problem. The Federal Reserve has made clear that they plan to wage war on inflation by raising interest rates repeatedly and consistently. Historically, this policy has been associated with recessions.

Is The Sports Card Hobby Recession-Proof?

Depends on what we mean by recession-proof. Inflation is already curtailing demands for cards. At least anecdotally. We will look at some prices to see how profound the effect is.

A recession will be worse. The definition of a recession in the United States is a fall in GDP in two successive quarters. Negative GDP growth means people have less discretionary income to spend. It also feeds a pessimistic outlook which makes people less likely to spend and more likely to save.

You don’t need a Ph.D. in economics to see why this would influence the sports card market. There will be less money to buy that Joe Burrow auto when families struggle to pay the heating bill.

However, the sports card industry is recession-proof to the extent that it is going nowhere. Moreover, it has a loyal core base of customers. So, many passionate collectors will remain even if some flippers and breakers abandon the hobby.

Inscription recession, currencies dollar and declining chart as risk of global financial crisis caused by coronavirus. Covid-19

The Pandemic Sports Card Boom

During the pandemic, sports cards became more popular than ever. Every product seemed worth flipping, and people lined up outside retail stores to get even the least desirable releases. Scoring retail in any shape or form became an art form.

Prices for wax and single cards skyrocketed and peaked in 2020 and 2021. Mainstream media outlets were filled with reports on the vast amounts of money spent on cards. But the downside to that boom is that the crash will see values plummet from a higher point. That makes the shock of adjustment more difficult for collectors.

Sports Card Recession Guide To The Current State Of The Market 

Let’s look at the prices of some cards right now, compared with their performance over the last two years. We will keep an eye on two things: is the market softening? Is there a significant difference in the performance of different levels of cards?

High-End Cards

What are the eBay prices for a 1987 Michael Jordan Fleer? Only one way to find out. 

Let’s look at some iconic cards and how they have fared in recent months. Unfortunately, the absolute biggest cards don’t have enough sales data to compare. So I went with a couple of very popular cards that sell for over $20,000.

Card Early 2021 Late 2021/Early 2022 Mid-2022
Michael Jordan 1987 Fleer Rookie (PSA 10) $738,000 $285,896 213,628
Tom Brady 2000 SP Authentic (PSA 9) $39,200 $31,250 $27,900

As you can see, it is a myth that high-end cards only grow in value. A Jordan rookie is worth about a third of what it was 18 months ago. Meanwhile, the Brady has lost over a third of its value. In both cases, the significant erosion to the price came during 2021. Therefore, the dip in price was not due to the inflationary pressure of 2022.

Want an SP Authentic Brady rookie card? Check out the supply of this rare card on eBay. 

Middle-End Cards

Do we see the same sort of movement with middle-end cards as well? Let’s take a look at a few examples.

Card Early 2021 Late 2021/Early 2022 Mid-2022
Patrick Mahomes 2017 Donruss Holo (PSA 10) $2,000 $1,284 $1,175
Mike Trout 2011 Topps Update Diamond Anniversary (PSA 10) $22,322 $12,722 $10,002

Mid-level cards have had the same movement as their higher-end equivalent. Both the Mahomes and the Trout suffered close to 50% value loss over 2021 and a far smaller depreciation over 2022.

Low-End Cards

What about the garden variety base rookies? Let’s take a look at a couple.

Card Early 2021 Late 2021/Early 2022 Mid-2022
2020 Joe Burrow Donruss (10) $255 $360 $140.51
2018 Luka Doncic Optic (10) $730 $232 $197.50

The Joe Burrow card jumps out as an outlier in the general trend. But of course, in early 2022, the Bengals looked poised to win the Super Bowl, and Burrow appeared ready to join the pantheon of greats. So, the excitement around that card is the exception that proves the rule. The Luka card closely conforms to the pattern we have seen. The Burrow also lost over a third of its value over the period.

Vintage Cards

One common wisdom saying in the hobby is that vintage cards hold their value better than ultra-modern cards. The source of this idea is the steady rise in the value of many sought-after vintage cards over the decades.

But how reliable are vintage cards in the face of the current economic climate? Let’s look at some prices:

Card Early 2021 Late 2021/Early 2022 Mid-2022
Mickey Mantle 1952 Topps (PSA 4) $48,500 $63,000

 

$90,133.20
Joe Namath 1965 Topps (PSA 6) $6,698.00 $5,800.00 $5,040
Lou Alcindor (Kareem) 1969 Topps (PSA 5) $2,700 $1,680 $1,755.60

The Mickey Mantle has accrued much value despite changes in the sports card market. However, it appears to be the exception. The Namath and Kareem lost a substantial portion of their value over the same period. Additionally, it should be noted that the Mantle falls into a small category of super cards that appear to defy gravity.

Joe Namath’s rookie cards aren’t quite a recession proof move. But they will likely increase in value. Get one on eBay. 

Nonetheless, vintage appears to be a safer investment than ultra-modern. The Namath rookie lost less of its value than any of its contemporary equivalents. Only the Alcindor lost similar value to ultra-modern cards. However, I believe that its value will be much higher in, say, ten years.

Why is vintage a more robust investment than ultra-modern in times of economic trouble? There are a few reasons:

  • They have a limited and known population. So no one is making new Hank Aaron rookie cards.
  • Vintage collectors tend to be more “hardcore” than ultra-modern collectors.
  • The biggest vintage stars are athletes with a popularity that has withstood the test of time. But unfortunately, current athletes always have a chance they will be forgotten in the long run.

What Do We Learn From These Numbers?

We aren’t in a recession yet, so take these conclusions with a grain of salt. However, two things jump out from these price comparisons. First, the common wisdom that the high end keeps rising in a recession does not appear to hold true. While lower-end cards may lose a more significant percentage, they lose more in absolute value. If the market doesn’t fully rebound, you can take a bath on the high-end items.

So, please don’t count me along with the prophets of doom. Your best cards will still have value during a recession. But as we have seen, the attrition can be significant even without an active recession.

How Does A Recession Influence The Sports Card Market?

The most apparent effect of a recession is lowering prices across the market. For example, the rising demand among mid-level collectors fed the sports card boom. It was also greatly assisted by the entry of new hobbyists into the market.

With less disposable income, many collectors will leave the hobby, and the demand for mid-level products will fall. High-end may be hurt to a lesser degree because the wealthy seldom feel recessions as keenly. Meanwhile, the low-end products are maintained by more committed collectors.

The Sports Card Recession Strategy Guide 

The pandemic boom ended with the rise of inflation in early 2022. Now many veteran collectors are preparing strategies to deal with the coming recession.

Prepare For The Worst

Investing in sports cards is always risky. Most notably, when we go prospecting, we can lose every cent on a bust. Therefore, a collector should remember the two rules of preparing for a downturn.

Don’t Invest Money You Can’t Afford To Lose

Fairly self-explanatory. Consider your card investments part of your discretionary spending. So budget for that after taking care of all essentials. It also shouldn’t be your principal investment. Some people are good at turning a profit off cards. However, there are better and more lucrative investments out there. So put your nest egg in those.

Some astute collectors separate their card money from their general budget by only using card-generated proceeds to finance purchases. That strategy will save you a great deal of heartache.

Buy Cards You Like

When you buy a card, especially with a recession coming, perform a mental exercise. Before buying any cards, ask yourself: would I still like these if they had no monetary value? Are these the types of cards I like?

If the answer is no, you may end up with financially and emotionally worthless items when the crash comes.

Sell Overvalued Cards Now

The recession isn’t here yet, and card prices are still up compared to the pre-boom years. Therefore, this may be an excellent time to sell some highly unlikely cards to maintain their value in a recession.

Which ones? Cards with high population counts are unlikely to hold their long-term value. So, if you have any graded base cards worth 100$ or more, now may be the time to offload them. Conversely, hold on to numbered, parallel, or autos of players with a solid potential value.

Buy The Dip

It is hard to predict which products and cards will drop the most in price during a recession. However, there is no doubt that many prices (possibly all) will go down if the recession is deep enough. That means there will be many tempting opportunities to buy at prices that would have been unthinkable a year ago. But is it worth doing?

Ultimately, the answer depends on your evaluation of the prospects for a rebound. Historically speaking, both the United States economy and the hobby bounce back from setbacks. The fundamentals of the hobby are more vital than ever, with large dependable companies in the mix. Anyone who says “the hobby is dead” gets mocked in hobby circles for a good reason.

As stated above, if you buy the dip, ensure you get low population items. No need to scoop up base, even if the price seems right.

But no one has a crystal ball. So, it is quite possible that the pandemic boom was a flash in the pan, and the hobby will return to a significantly smaller size.

This is the kind of card you will want to buy in the dip. Look for Wander Franco auto refractors on eBay. 

Bottomline Of The Sports Card Recession Guide 

The numbers are already alarming for most cards. Across the board, many desirable items have lost a third to half of their value. However, inflationary attrition doesn’t appear to be the main reason. Instead, we identified a real bubble burst in 2021, which did a lot more to lower overall values.

Unfortunately, a genuine recession will lower values further. However, there is no need to engage in doom and gloom. A recession may not come or may end up being a brief correction. More importantly, the hobby is healthier than ever and includes a large core of collectors with a genuine passion.

The value of cards will rebound from a decline. That means, just like in the stock market, you have an opportunity to buy low and sell high. We have also seen that vintage cards act as a more solid investment than ultra-modern, albeit with less dramatic short-term earnings. Think of them as you would bonds in a stormy economy. Remember, there are myriad ways to use a potential recession to your advantage.

 

Shaiel Ben-Ephraim

Shaiel Ben-Ephraim

Shaiel Ben-Ephraim is a former history and political science professor at UCLA. He has a PhD from the University of Calgary. Shai also worked as a diplomat and journalist on three continents.