"By the '80s, baseball card values were rising beyond the average hobbyist's means. As prices continued to climb, baseball cards were touted as a legitimate investment alternative to stocks, with The Wall Street Journal referring to them as sound 'inflation hedges' and 'nostalgia futures.' Newspapers started running feature stories with headlines such as 'Turning Cardboard Into Cash (The Washington Post), 'A Grand Slam Profit May Be in the Cards' (The New York Times), and "Cards Put Gold, Stocks to Shame as Investment" (The Orange County Register)."
-- Dave Jamieson, Author of Mint Condition (2010)
The great baseball card value bubble of the late 1980s and early 1990s burst in spectacular fashion. By 1993, vast oversupply created by a combination of an influx of new competition (Score in 1988 and Upper Deck in 1989 would join Topps, Fleer, and Donruss to make the "Big 3" a "Big 5"), multiple manufacturers with multiple baseball card products (too many to name), and print runs thought to be in the millions would render all but the new high-end issues such as 1989 Upper Deck, 1990 Leaf, 1992 Bowman, 1993 Topps Finest, and 1993 Upper Deck SP worthless.
With single-pack prices of such high-end issues in the multiple-dollar range and everything else worthless, the casual mass-market collector (i.e., kids) would be chased from the baseball card market, pushed toward more practical hobbies such as video games, pogs, and AOL. Of those collectors who stuck around, many were finished off by the 1994 baseball strike.
And by the time the dust settled from the great home run chases of 1998 (Mark McGwire and Sammy Sosa) and 2001 (Barry Bonds' 73-home-run season) through 2007 (the year Bonds passed Hank Aaron for the career home run record) -- along with the ensuing steroid scandals -- baseball card industry sales had dropped from $1.5 billion in 1992 down to $200 million by 2008, where it reportedly still sat as of April 2012.
Where there were once an estimated 10,000-plus baseball card shops in America, the latest issue of Beckett Baseball magazine lists fewer than 200 such hobby dealers with baseball cards for sale in its directory. Hobby sales of new sealed boxes or whole cases are now dominated by a few such dealers with a large online presence and competitive prices -- most notably Blowout Cards, whose online site also includes the largest online forum dedicated to sports and baseball cards -- and dealers who operate on eBay or Amazon.com.
Meanwhile, where baseball cards were once readily available at drugstores, grocery stores, and Kay Bee Toys stores (remember those?) across America, brick-and-mortar retail sales are now restricted largely to big-box retailers Wal-Mart and Target.
The price of unopened boxes of baseball cards from the late 1980s and early 1990s has fallen dramatically over the past 20 to 25 years or so, reflecting a general widespread devaluation of cards printed in that time period. Nowadays, unopened wax boxes of 1988 Donruss can be had for $6 or $7 a box on eBay, or about half what a box would have cost at retail back in 1988 -- well less than half if you account for inflation. And where packs of 1990 Leaf Series II once went for $12 a pack in search of Frank Thomas rookie cards, or RCs, worth $70 each back in early 1993 , whole sealed boxes with 36 unopened packs and an average of about two $20 1990 Leaf Frank Thomas RCs per box can now be had for $70 to $80 per box on eBay.
Not surprisingly, going back to a Feb. 6, 1993, article in The Economist titled "Throw in the Cards," virtually every article that has been written about baseball cards over the past two decades has focused on these very details. And in the past 20 years, few -- if any -- industry outsiders have dared to relate baseball cards as investments.
But these articles tend to overlook at least three key details:
- Graded baseball cards. High-grade examples of professionally graded cards from Beckett Grading Services, or BGS, and Professional Sports Authenticator, or PSA, warrant premium valuations, often well in excess of ungraded book value. That said, Gem Mint condition (BGS 9.5 or PSA 10) graded rookie cards of premium players from the 1980s and early 1990s have largely either held up well or in some cases have actually appreciated considerably, maintaining valuations far beyond those ever achieved by ungraded examples of the same cards.
- A card removal effect caused by the presence of graded baseball cards. The presence of graded cards means that the highest-quality cards have been removed from the pool of ungraded cards on the market, thus resulting in lower overall values of ungraded cards. Consequently, focusing exclusively on ungraded values will understate card values by default.
- The dramatic improvement over the past 20 years of the investment profile of newer issues. In addition to the premiums afforded to Gem Mint condition graded cards, the presence of a clear best product every year, smaller print runs, short-printed rookie cards and serialized parallels, autographed rookie cards, and an enhanced baseball prospect game lead to a more exciting hobby with a better product and better economics. Meanwhile, graded cards and eBay have brought enhanced liquidity to the cardboard stock market.