Nonsense Newsletter #15: The guys head to Vegas, Card Tech, and Buying Bigs
Sponsored by SGC Cards gosgc.com
Welcome back to Edition 15 of the Nonsense Newsletter.
The guys’ trip to Los Angeles for the Panini Live event proved to be quite entertaining for the team. Mike and Jesse interviewed players, card shop owners, and continued making some west coast nonsense. This week on the show, the guys recap the Super Bowl and its effect on card prices. They also detail some new products, and Jesse reveals some Fanatics news. Make sure you tune in to all of our socials, so you don’t miss any exclusive content!
-Denton Pfeuffer
Technology and Cards: A Growing Connection
As the hobby has grown more mainstream, we have seen a variety of technological advancements and new entrants into the space. The most polarizing of which being the emergence of sports card-related NFTs. So we wanted to take a quick look at the trend.
NFT projects are sprouting up everywhere, and recently we have seen a few prominent ones in the card industry. Take Panini and Topps, for example, who have brought different approaches to the market.
Traditional vs. Legacy
Panini uses a more traditional trading card approach where collectors open packs and are awarded blockchain cards more randomly. At the same time, Topps has recently announced it has made a single copy of the iconic 1952 Topps Mickey Mantle that will be available for auction.
Panini cards are relatively inexpensive to buy and involve all sorts of athletes, including the upcoming NFL rookie class, as discussed here by Decrypt. The players invited to the Senior Bowl, a showcase of talent before the NFL draft for college seniors, each used video footage to make their own NFT with Panini. Panini packs provide you with lower value commons with a chance to hit big, very accurately simulating the physical card space.
Topps, on the other hand has taken a more prestigious, if you will, approach, as discussed in their press release. Their decision to launch 1 of 1 variant of iconic cards, auctioned to the highest bidder, limits their market and makes their collectibles more expensive and legacy-driven.
The question is, which methodology will sustain long term? Leave us your thoughts below.
Contributor: Denton Pfeuffer
Did you miss the show? Catch it here!
After a busy week in Los Angeles, the guys are back in Nashville, but this doesn’t mean we’re done sharing our LA adventures. On the show, the guys’ rip packs with Heisman winner and All-Pro running back Ricky Williams. Then they talk about some of Gio’s Losers, and finally you get another dose of Man on the Street in LA. You can access the episode here.
Fact or Fiction #2: Don’t Buy Bigs
While the dust from the Super Bowl has hardly settled, many collectors have already shifted their focus to the NBA as the trade deadline, All-Star festivities, and upcoming playoff push all make for newsworthy moments. This shift means that it is time to tackle one of the biggest pieces of hobby advice/wisdom from the basketball world: Don’t buy bigs (Centers and Power Forwards for this article).
There are quite a few articles and podcasts devoted to the notion that big men in basketball don’t sell. The basic argument goes, “blah, blah blah, Kobe, blah, blah, blah, Michael Jordan.” While those guys both sell for a ton, the argument is the epitome of cherry-picked data and is masqueraded as data-driven when most of the time, they look at only a handful of players. That won’t cut it here.
For this article, we are going to break down card value by the position played. Data was collected for ten years’ worth of NBA drafts. Card values for lottery players in the 2010-2019 NBA Drafts were observed and recorded using data from 130point.com (arguably the best free resource for collectors). While data is popping up for the 2020 draft class, card values after a draft have a cycle driven by the hype that the 2020 class is still firmly in. For the 2010 draft, Donruss rookies were used, but for all others, Panini Prizm rookies were used. Raw values were used as most of these players don’t have graded sales. Sure, raw cards and base cards aren’t popular right now, but we only care about relative value for this column. We need to know that Point Guards sell for more than Centers and by what percentage and raw cards can get us there easily. These positions should hold for graded versions of the same cards, and a quick spot check confirms this. Some players have more than one position, but they have each been classified by their primary position with weight given to the position they were classified as at draft time. Anthony Davis was probably the toughest call here, but ultimately, he landed as a Center as that looks like where he will be spending most of his time in the future (and probably should have always been).
Table 1: Average Rookie Card Value by Position
Table 1 shows the average value of a player’s rookie card based on position. Immediately, it is evident that as conventional wisdom suggests, the guards dominate. Power Forwards and Centers sell for under 50% of Point Guards and close to 50% of Shooting Guards. However, the story is not as simple as big men don’t sell. The big losers are the Small Forwards with a paltry value of $3.14 or only 16% of the value of Point Guards. Ten years of lottery picks of Small Forwards produced only Paul George with decent hobby value. To be fair, if you extend the time frame back a bit, you would get to Kevin Durant, but one could easily argue that he defies position.
Even this isn’t the whole story. The results could easily be interpreted as a function of the likelihood a player makes it or not. Many of these values are dragged down by draft busts that sell for a buck. We want to know what happens to the value of successful players. Table 2 looks at the average value by position for only those players with decent hobby value. In this case, raw card values over $10.00. Out of 130 lottery players, only 26 players make this list. Table 2 also includes the percentage of players at each position that have obtained hobby value. Think of this as the odds of making it.
Table 2: Average Value of Rookie Cards of Successful Players and % that Become Valued
The guards are dominant both in price and in odds of reaching hobby relevance. Small Forwards again lag far behind in both. Centers have slightly better odds than Power Forwards, and both have values closer to guards here than in the full data set with Power Forwards eclipsing Shooting Guards.
One might argue that only looking at the lottery misses some big players. Indeed, it misses one of the highest valued players in this time frame, Giannis Antetokounmpo. There are really only eight players chosen outside of the lottery with decent hobby value: Kawhi Leonard (SF), Jimmy Butler (SF), Draymond Green (PF), Giannis Antetokounmpo (PF/C), Nikola Jokic (C), Dejounte Murray (PG), Pascal Siakim (PF), and Bam Adebayo (PF/C). This is where Small Forward has its two biggest stars in Leonard and Butler. Interestingly, there has only been one breakout Point Guards or Shooting Guards with hobby value to come from outside of the lottery in this ten-year time span and Dejounte Murray, while pretty special, is nowhere near the top of the hobby pecking order. If you are looking for a post-lottery lottery ticket, it makes sense to go for a bigger guy than trying to find a high-scoring guard.
One other thing that appeared likely when looking at all the numbers was that draft position did not seem to affect card prices after a few years. It does seem to matter initially, but the effect wears off quickly. For the cards looked at here, there was no statistically significant correlation between draft position and value. That’s big news! This is a good thing as it means collectors rightly focus on production rather than hype. Your odds of picking the best player in any draft are pretty much the same, whether the player was the 1st pick or the 13th pick. In other words, don’t get too enamored by draft position outside of whether a player was in the lottery or not. There is a positive and significant relationship between value and being in the lottery, which makes them better bets than those picked later.
So, what do you do with this information? Obviously, that’s up to you, but it might be worth adding a healthy dose of skepticism to lottery Small Forwards. Big men have some value (probably more than skeptics give them), but it is more of a gamble with less of a payout. It also is time to ignore the draft position earlier. The market gets there quickly, but every year collectors get sucked back into chasing the top five guys. Basically, invest in lottery players, but ignore what position they got drafted in and just choose who you like. It also might be worth looking into selling early lottery picks while they still have a bump in price based solely on draft position. It should be noted that these are overall trends, and of course, there are exceptions of course.
The Conventional Wisdom: “Don’t buy big men.”
The Result: Partially confirmed. Guards dominate, but bigs outperform Small Forwards substantially. The gap narrows a bit for successful big men, but they still lag a bit, and the odds of being successful are lower; however, bigs are also the much better bet outside of the lottery.
Unexpected Find 1: Outside of the lottery, the tables turn, with bigs and Small Forwards being the only ones worth betting on in this time frame. Stay away from late drafted guards.
Unexpected Find 2: Draft position in the lottery does not matter for value for very long, but being in the lottery does matter.
Contributor: John Dudley
Need More Nonsense?
A first…
This Pele rookie card becomes soccer's first $1 million card, selling for $1.33 million. It has been discussed that soccer cards have been growing in popularity for a while now, and this Pele sale only confirms the point. Arguably the best player ever, Pele’s rookie card just sold for $900k four months ago, and now a different example in the same grade has broken the 7-figure mark. How is that for market health!
Half the card does not mean half price
Half of rare Honus Wagner baseball card sells for more than $475,000 at auction. It is absolutely insane to think that roughly 60% of a sports card can sell for nearly half a million bucks, yet here we are. Arguably the crown jewel of sports cards, the T206 Honus Wagner has always been on the radar of collectors, just not everyone with that price tag.
A Can't-Miss Commercial
If you’re like us, you love Super Bowl commercials. This one was undoubtedly memorable and well worth the watch. The chaos combined with caricatures of some fan favorites will make you smile.
Upcoming Events
· We will be in Atlanta for the Culture Collision Trade Show on Feb 25-27, so come out and say what’s up!
· The Mint Collective, a next-generation hobby event, will be in Las Vegas from March 25-27, and so will we! Mike and Jesse are serving as speakers for the event. There will be cards and conversations you don’t want to miss.
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The Sports Card Nonsense newsletters reflect the opinions of only the authors and contributors. They are for informational purposes only, and are not a recommendation for purchases or of an investment strategy or to buy or sell any assets.