New Era for Sports Cards
Having grown up collecting baseball cards with my father and grandfather, I returned to the hobby a bit in 2016 as the Chicago Cubs seemed poised to make a run and Topps had started offering this interesting new Topps Now series that offered new cards every day based on the previous day’s top events and sold them for twenty-four hours.
In July 2021, news broke that Fanatics had secured rights to produce trading cards for Major League Baseball (MLB), National Basketball Association (NBA), and the National Football League (NFL) it came as a bit of a shock as Topps had long held these rights. When Fanatics then announced in September 2021 that it had raised $350M Series A, I started to think more about what the future of trading cards might look like and it got me excited.
The Present
It was interesting to see what had changed in the hobby during my ~20 year hiatus. There was no longer competition amongst Topps, Donruss, Fleer, and Upper Deck — Topps was the only game in town, along with the Bowman brand it had acquired. However, Topps offered a wide variety of products with many tailored towards more affluent collectors.
Improved Manufacturing. Improvements in manufacturing led to opportunities for relics (cards with materials like ball, base, or uniform pieces integrated), parallels (limited edition variations), and on demand card products and inserts.
2016 Topps Now “Bryzzo” features autographs from Kris Bryant and Anthony Rizzo who connected for the final out in the Cubs’ World Series win and a piece of a base (“relic”) used during Game 7. Card is also numbered “20/99” and graded by Beckett Sports.
Manufactured Scarcity. The improved manufacturing practices have enabled the introduction of “manufactured scarcity”, where the manufacturer is able to create “1/1” variations of cards that serve as chase cards or a fun hit for customers. Parallel cards often have several variations — Topps Now for instance routinely offers /99, /49, /25, /10, and /1 versions, each with a different color template and individual numbering. Collectors will often chase “the rainbow” trying to have one of each color. Scarcer relics usually have the better parts of the base, uniform, or ball.
Card Grading. Card grading is the process of having a professional service inspect, professional protect in a sealed case, and provide a numerical grade for the condition of the card. While this existed previously, it had previously been for valuable older cards and only recently had become more popular for new cards. The leading grading services, Beckett and PSA, provide grades out of 10, and the value of a card graded a 9.5 or 10 can be exponentially larger than a card graded at 7 or 8.
Lottery. As a kid, it was fun to open packs to see if you got your favorite player or another star. This excitement remains, but now it is usually chasing autographs or rare parallels. Topps dropped unannounced Brandon Crawford autos and Pete Alonso and Javier Baez card variations into its Topps Now shipments as another twist to drive this excitement.
Status / Value Storage. Cards, similar to artwork, do also serve the function of value storage and status. Collectors love to show off their rare and best cards. Topps Nows biggest collector loves to list cards on eBay at ridiculous prices largely as an effort to display his collection. He doesn’t necessarily want to sell the card — it may be his only copy or one he wants in his personal collection (PC). In most cases, collectors are betting on their collections to hold value more so than cards of the 80s and 90s.
Listing of a Topps Now “Only 157 Printed” card on eBay. This listing is as much for show as for actual desire to sell card. In this case, might be his only copy of the card and part of a complete set.
A “Rainbow”, where a person has obtained the entirety of the parallel collection, often including a 1/1 version. Collectors are very proud to show off “Rainbows” when they have completed them. (The above is actually missing “Red” parallel, so it’s a partial rainbow.)
Community. While there are fewer local card shops and shows, there remains a dedicated community of collectors that connect through forums and Facebook groups. Particularly dedicated hobbyists have replaced local card stores / distributors in many cases and actually help manage buyers clubs to help others access on demand cards at bulk prices. Topps has rewarded many of these hobbyists with membership in their “Platinum Club” and extended them benefits like the ability to reserve Topps Now relics or member only card versions and autos.
The Future
Base Sets + Premium Sets + On Demand. Physical trading cards are likely to remain part of the mix for the foreseeable future, and Topps had largely found a good mix on base + premium sets (Topps Transcendent)+ on demand (Topps Now, Topps Living), and I expect this model to continue.
Continue Pushing Manufacturing Bounds. Topps Now relics have features bases, balls, socks, helmets, hats, and even corn stalks. Integrated relic pieces should remain a focal point in the trading card market, along with autos and parallels. On demand offers the most opportunity to push boundaries, perhaps offering official cards on-site only to attendees of a game.
Nostalgia Meets Future. While a vast majority of efforts focus on the stars of today, it is important to layer in nostalgia of the past and incorporate greats like Babe Ruth, Mickey Mantle, and Ernie Banks. This will shift to Cal Ripken, Barry Bonds, and Greg Maddux as the installed base of current collectors age.
Marketplace + Grading + Fractional Ownership. Another interesting development has been the rise of fractional ownership. Companies like Rally Road and Collectable are making fractional ownership in sports card an option, so now you can own (at least a piece) of a 1952 Micky Mantle.
Web3 / NFTs. perhaps the most interesting part of the future is the rise of “Web3”/”NFT”. While there will likely be some opportunity with digital specific assets, the real opportunity will be to create exclusive memberships (ie Topps Now Platinum Members, season ticket holders, Rainbow Club members, etc) and marry with great benefits and tools to share or highlight the status.
Fanatics Opportunity. Fanatics has a phenomenal opportunity to not only drive the future of the hobby, but to own the platform. Topps had some great innovations over the past 10 years, but they were often handicapped by their ability to execute and deliver a great customer experience.
Own the Future Platform. While Fanatics has the rights to produce the cards and related products, they should think about how they can own the platform that enables teams and individual players to monetize their media and brands in Web3, basically Opensea.io for sports. On the physical side, making grading, storing, displaying, and fractional ownership easy will be a key part of a future platform as well.
Subscription. A big miss by Topps, especially with Topps Now, was development of a subscription product. As a Cubs fan, I should’ve been able to subscribe to get all Topps Now Cubs cards produced without having to watch daily. While Topps dabbled in this one season, it applied only to base cards and basically was a “pre-pay” that you had to top up at various points of the season. As a result, Topps largely ceded subscription and other products to a handful of collectors that took on the role.
Maintain Community / Hobbyists. Currently, there are active communities on Facebook and Blowout cards that Topps lurks in but does not participate actively. There is an opportunity for Fanatics to more actively engage with fans and collector communities.
Consider Topps + Bowman Brands (Baseball). Fanatics should consider acquisition of Topps and Bowman brands to continue producing baseball cards under. Topps has been producing baseball cards since ~1949 and remain a cornerstone of nostalgia for many collectors. With the loss of the MLB contract, the brand may be available at a reasonable price point. (Author’s Note: Fanatics announced acquisition of Topps on 1/4/22.)
A Few (Not So) Crazy Ideas.
Platform for Players. In addition to its formal rights, Fanatics should consider building and offering a Web3 platform not just to teams, but also to individual players. While there is some competition in this space (ie Tom Brady’s Autograph.io, NBA Top Shot), it is early and there is ample opportunity to build a platform that enables players to be front and center, while offering a great marketplace and customer experience for fans.
Extend to College + Amateur Athletes. Similar to above, but also quickly move to offer to college, non mainstream athletes, and amateur athletes.
Team Ownership? The Green Bay Packers recently kicked off their sixth “stock” sale in team history. Over 300,000 people currently own “stock” in the team, and everyone is still issued a physical stock certificate. Why not a platform to manage team ownership — I suspect the seventh Packers stock sale may happen this way and there’s already a DAO (Krause House) organizing to buy an NBA team.
Just some quick thoughts, but very excited to see where this goes. I think sports is well positioned to be an early use case in Web3 and to continue to produce great products on the physical side. If you’d like to chat more about it, find me on Twitter at @wilsonj12.
Originally published 23 November 2021 on medium.com
