Contributor: John Dudley
Joe Biden recently gave the State of the Union address as part of his duties. While this column will never delve into politics, it did get me wondering about the state of the card world. You know you spend too much time with your hobby when you relate everything to it, but such is life.
With the release of 2023 Topps Series 1 (the hobby’s official new year, or it should be), I figured now is the perfect time for a State of the Card World address. There is no president of the card community (maybe we should hold elections), but I’ve got enough ego to take it upon myself to analyze the state of the card industry and I won’t even demand you stand up and clap after every sentence. So, consider this your first-ever State of the Card Union address. Without further ado, let’s jump to the elephant in the room.
Pricing
2022 was the annus horribilis for card prices. Ultimately, most collectors saw the value of their collections decline last year. The chatter on the message boards, social media, and my own experience confirm this, but the measurable numbers show large declines too. When the data and narratives line up, truth is often found.
Some think that card values are not as easily tracked as the stock market, but CardLadder’s indices do a great job of simulating that. They track myriad staple cards in each of their indices to show changes in the market over time. Their indices are not that much different than the Dow Jones Industrial Average or the Nasdaq.
Table 1: % Change in Card Indices Over the Last 12 Months
| Type | % Change in Last Year |
| Baseball | -4.69 |
| Basketball | -40.8 |
| Football | -43.7 |
| Hockey | -1.9 |
| Pokemon | -22.1 |
Table 1 shows the yearly drops in the CardLadder indices. Baseball was actually not that bad. You know it is a rough year when a four percent drop is a good thing. Remember it was boosted by the red-hot Julio Rodriguez and a few other heralded rookies and had Judge and Ohtani producing historic seasons. Even so, baseball was far and above healthier than basketball or football.
Hockey is having a moment, but the big story is the precipitous fall of basketball and football. Losing over forty percent of your value in a year is simply not good. The big question I have is why did these two plummet and baseball hold its own.
Explanations
What is going on with those markets? Many have argued that the decline in card values is a result of a decline in the economy overall. To test that, I plotted the CardLadder Indices against both the Dow Jones Industrial Average and the value of Bitcoin.
Graph 1: Card Ladder Indices, the Dow, and Bitcoin
This graph uses just one data point a month to allow for a smoother graph and for data entry reasons (I’m lazy). The scale makes it a bit hard to see the large declines in Basketball and Football. Judging from the graph, it looks doubtful that changes in the Dow are related to the card market. Looking at correlation coefficients (how strongly related two things are) supports this. On the other hand, Football and Basketball show a strong relationship to changes in Bitcoin value. The correlation coefficients are presented in Table 3.
Table 3: Correlation Coefficients for CL Indices, Bitcoin, and the Dow
| Sport | Dow | Bitcoin |
| Baseball Index | -0.11 | -0.66 |
| Basketball Index | 0.12 | 0.8 |
| Football Index | 0.03 | 0.71 |
Correlation coefficients run from -1 to 1 with numbers close to 1 showing a positive correlation (they move together) and numbers close to -1 showing a negative correlation (they move opposite of each other).
Here, we see fairly strong correlations between Basketball and Football values and Bitcoin values. Many have argued that there is a lot of overlap between card collectors and crypto-investors and this data supports that. Interestingly, their values have almost no relationship with the movement of the Dow. The finding of a negative relationship between baseball cards and the dow is possibly a product of a small time frame and a strong baseball season. Still, it is consistent with the idea that investors look for alternative investments during times of high inflation.
A Change Blowing in the Wind?
While the drops might be slowing, there is still a downward path for football and basketball. With positive news in the grading markets and strong future rookie classes, I expect them to both bounce back to some degree. I’ve heard a lot of collectors plan to buy into both as soon as prices hit the floor. Right now, all of those collectors are locked in a game of chicken, but once buying starts back up, it could be a quick rise.
Table 2: % Change in Card Indices Over the Last Month
| Type | % Change in Last Month |
| Baseball | 0.2 |
| Basketball | -6.3 |
| Football | -3.7 |
| Hockey | -4.6 |
| Pokemon | -2.1 |
Grading
The great news is wait times and service prices are down across the board from this time last year. The other good news is that demand still seems high for graded cards. Overall almost 18% more cards were graded in January 2023 than in January 2022. That’s fantastic! Sadly, all that growth belongs to PSA. PSA is now regularly grading 1,000,000 cards a month with no signs of slowing down.
The other companies also performed well given the downturn in the market. BGS and SGC are close to the same spot they were at the end of last year (see Graph 2 below). I am still expecting major sales soon as these companies are going to want to see more growth, or t least perform at capacity, with their newly expanded capabilities.
While overall grading volume is up, it is impossible to tell how much demand has been lost. The increase in grading volume for 2023 likely represents more of an increase in grading capacity rather than an increase in demand for grading services.
Graph 2: Non-PSA Grading Volume
Production Quality
The number one thing one hears online these days on sports cards group are complaints about overproduction. The good news is we might have hit the end of print run increases for a while. 2023 Topps has fewer hobby boxes and jumbo boxes based on the odds stated. To be fair, it does look like there is an increase in retail product to balance things out. It does not appear that there was a major increase though. The more important point though is that the market seems more than capable of consuming highly-printed quality products (Topps Update flies off shelves).
The biggest issue all producers have currently are delays. Unfortunately, this seems to be a global issue affecting multiple industries dealing with printing and is outside of their control. Hopefully, the delays will end, but there is some thought that the printing industry woes will continue in 2023. This means that the companies will need to factor this in. A predictable release calendar is a boon to the hobby but it might be another year or two until we get one.
Both Panini and Topps seem to be having issues producing chrome-style cards currently. Outside of 2022 Topps Sapphire (and no one opened that), every recent chrome release has seen scratches, dimpling, poor centering, miscuts, and outright mangling of cards. Paper-based releases do not seem to have as many issues though. One does wonder if the uptick is a bit of a frequency illusion fueled by social media where once you start noticing it you find it everywhere. Personally, I’ve been finding it (bad quality) in my boxes so I’m skeptical of the frequency illusion argument here.
Production Innovation
Collecting is more than just card values and complaints. It’s also about the awesome cards. 2022 was a strong year for cards with some great new trends, innovations, and some new must-have designs.
Topps introduced some wonderful new products this year that were well-received. Cosmic, Logofractor, and Gilded lead the pack for their new offerings. While some might argue that we do not need new versions of the base Topps design, the success of Logofractor and Gilded show that to be false as long as the new versions are high quality and innovative. The Gilded Blue Refractor Autos might be the nicest-looking cards produced in a decade IMO, but it’s got a wannabe snooty aesthetic that appeals to me. Cosmic added a bit of fun and also benefitted from coming out at a time with relatively low levels of other releases. I’d be shocked to not see Cosmic, Gilded, and Logofractor in 2023.
Design-wise, Topps introduced the Home Field Advantage insert set which is a clone of the Downtown inserts but still has a ways to go in beefing up the overall quality of their inserts. Scarcity seems to be what collectors want, but strong designs are needed to make one-per-box or even one-per-pack inserts desirable.
Panini had little in the way of new successes but continue to push the envelope in their higher-end sets. They’ve been great at adding to National Treasures, Flawless, and Immaculate each year causing these to be the standard for higher-end products. The new shoe laces cards are a thing to behold. Panini also continues to dominate the industry in terms of desirable inserts. They’ve figured out the formula of scarcity and strong design equals a hit and they’ve stuck to it.
More importantly, Panini still is capable of producing buzzworthy cards. While Topps had some lovely new products, the hunt for the LeBron Triple Logoman from Flawless received FAR more attention. Undoubtedly, they will create some must-have legendary cards in 2023 that will be the talk of the card world. I’m not sure Topps can say the same yet.
Customer Service
Panini and Topps both get points for creativity in 2022, but they both need some work in dealing with customers and providing consistent quality service.
Panini’s redemption program remains broken (that’s the kindest way to phrase it). Multi-year waits have gone from the exception to the norm. They’ve shown both difficulty in procuring autographs and much larger issues in shipping them out. While Panini has continued to blame Covid for the problems, the real issue seems to be a desire to not hire new staff for the program as their licenses expire. While customers have numerous complaints, there are no Panini employees available to hear them. There used to be a few email addresses floating around in the card world that could get responses from Panini, but silence seems to be the new policy either on purpose or inadvertently. Expect more of the same in 2023.
Topps has had their own issues with customer service. Most of their larger missteps have come from their direct-to-market products like Topps Now or products made for the Montgomery Club. While they have made mistakes, they have been diligent in fixing them. This has included having to get limited sets back from customers (with coupons for their troubles), mistakes in labeling (twice for J. Rod rookies), and overselling and subsequent cancellation of orders (this often has ended well for collectors with Topps accidentally sending out a lot of free Finest Flashbacks boxes).
2023: A Look Ahead
2022 saw a decline in the market, but baseball proved resilient and hockey proved a revelation. I expect more innovations in 2023 along with a print run around the same as 2022 for most products (Wembanayama mania might change that). In fact, all of the major sports have strong rookie classes that bode well for 2023. I fully expect the market to reach the floor, if it is not there currently, and a strong grading environment along with strong rookie classes has me optimistic for a nice rebound. That said, the link between basketball and football and Bitcoin is troubling and declines (or gains) in that market are worth watching. Regardless, it should be a great new Hobby Season. Here’s hoping this year is our Annus Mirabilis.
Also, if you haven’t checked out the insanely useful Card Shop Live app, what are you waiting for? It’s great for breaks, personal rips, singles, and hobby info. The breakers are all heavily vetted so no shenanigans here.
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