The great baseball card bubble.

The stadium scene.
March 24 2010 12:01 PM

The Great Baseball Card Bubble

Before tech stocks and McMansions, there was cardboard.

Mint Condition by Dave Jamieson.

How come that Frank Thomas rookie card you stowed away in 1990 is now worth less than a Happy Meal? Chalk it up to the baseball card bubble of the late 1980s and early 1990s. In a new book, Mint Condition: How Baseball Cards Became an American Obsession, Dave Jamieson tells the story of how baseball cards evolved from a tobacco marketing gimmick in the 19th century into a massive, big-money industry of their own by the late 20th century. In this excerpt, Jamieson explains how baseball cards first became seen as promising investments, setting the stage for a decade of speculation and overproduction.

Around the mid-1970s, a small cabal of serious baseball card collectors grew wise to the fact that their cards had become valuable. Cards had almost always had prices attached to them, even when prolific collector and cataloger Jefferson Burdick began sending out his Card Collectors Bulletin in the 1930s. But cards that had been worth a few cents were now worth a few bucks, and some of the rarer specimens, such as the T206 Honus Wagner, were commanding hundreds and occasionally thousands of dollars apiece. The number of trade shows sprouting up in the East and the Midwest testified to a growing market.

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By this time, the most aggressive card collectors had started crisscrossing the country in search of private hoards of cardboard that could be snatched up at bargain prices. Unlike school kids, these men were well-aware of baseball cards' status as a commodity—albeit an undervalued one—and many of these enthusiasts could credit their early transactions with turning them into wealthy men later in life.

"We'd pick an area of the country—say, Ohio—and take about a 10- or 15-day road trip," recalls Kit Young, who today owns a massive mail-order business in San Diego. "You'd take eight or 10 grand for a four-city hit. We'd rent a car, go around the towns, and we'd have ads in the local papers saying, 'Old Baseball Cards Wanted. … We'll be at the Holiday Inn.' You'd get one crack at them, and you paid by cash."

One of Young's old colleagues, dealer Gar Miller of Wenonah, N.J., says the excitement was in wondering what would walk through the door: "You might find some beautiful collection that had unopened packs of cards. It was just thrilling." For the itinerant and well-informed hobbyist, it wasn't difficult to get a good deal from the noncollectors who showed up at the Holiday Inn, considering there were no price guides to govern transactions in those days. "You didn't know what anything was worth," explains Miller.

This loophole in the hobby would soon be closed by a statistics professor from Bowling Green University named James Beckett III. Beckett had grown up on Topps cards in the 1950s, and after lapsing in high school and college, he got back into collecting while pursuing a Ph.D. in statistics. Like Young and Miller, Beckett started checking into motels around the country during the '70s. The more dealings he had, the more he could see that no one had any firm notion of the market value of baseball cards.

In 1976, he launched a poll in the hobby newspapers, asking dealers and collectors how much particular cards had been selling for in recent months. Because collectors were inclined to juice the value of cards they had in hand, Beckett sought several hundred respondents so that egregiously high or low numbers would cancel one another out. The following year, he published a rudimentary price list whose valuations seem positively rock-bottom compared with today's: The 1952 Topps Mickey Mantle, now fetching hundreds of thousands of dollars in fine condition, was listed at $50. In 1979, Beckett and a partner, Dennis Eckes, released the Sport Americana Baseball Card Price Guide, which they started updating annually.

Eventually, Beckett would launch a monthly magazine and employ a team of 10 full-time baseball card analysts who would travel to card shows and shops, examine auction data, and sift through major league box scores to determine card values. He also made collector-investors more condition-conscious by including in his magazines one of the first card-grading systems, providing definitions for what he considered "mint," "excellent," "very good," "good," "fair," and "poor" cards.

American boys growing up in the 1980s approached Beckett Baseball Card Monthly with something like religious reverence. For many of us, it was the first magazine we bought and the only one we leafed through regularly. The magazine's circulation eventually reached about 1 million, with many of those issues no doubt destined for the book bags of young boys. We walked the school hallways in the '80s with our Becketts sandwiched between our textbooks, and we followed the price fluctuations of our favorite players with slavish devotion. Beckett's valuations served as the foundation for all card trades.

What none of us understood at the time was that Beckett's guides were probably creating card prices just as much as they were reporting them. When Beckett sued a competitor over copyright infringement in 1979, claiming that the rival had stolen his data, the judge noted that because Beckett's guides were "regarded as the authority in the field, it is entirely possible that the prices in [his] publication not only reflect market prices, but in fact can determine market prices."

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). A hobby bulletin called the Ball Street Journal, claiming entrée to a network of scouts and coaches, promised collectors "insider scouting information" that would help them invest in the cards of rising big-league prospects. Collectors bought bundles of rookie cards as a way to gamble legally on a player's future.

Unfortunately for investors, each one of those cards was being printed in astronomical numbers. The card companies were shrewd enough never to disclose how many cards they were actually producing, but even conservative estimates put the number well into the billions. One trade magazine estimated the tally at 81 billion trading cards per year in the late '80s and early '90s, or more than 300 cards for every American annually.

Precious few collectors seemed to ponder the possibility that baseball cards could depreciate. As the number of card shops in the United States ballooned to 10,000, dealers filled their storage rooms with unopened cases of 1988 Donruss as if they were Treasury bills or bearer bonds. Shops were regularly burglarized, their stocks of cards taken as loot. In early 1990, a card dealer was found bludgeoned to death behind the display case in his shop in San Luis Obispo, Calif., with $10,000 worth of cards missing. A few weeks later, Bob Engel, a respected National League umpire, was arrested for allegedly stealing more than 4,180 Score baseball cards, worth $143.98, from a Target store in Bakersfield, Calif., and attempting to steal another 50 packs from a Costco.

For those disturbed by such unseemly tales, the hobby of card collecting had begun to resemble baseball itself: an American institution that appeared to have strayed from its noble and innocent beginnings. Never mind that baseball cards, much like the game, had always been big business and always been a revenue machine. There had been nothing particularly wholesome about using baseball cards to shill cigarettes to grown-ups and children alike 100 years earlier. As Lew Lipset, an outspoken baseball card auctioneer, wrote in an issue of his Old Judge Newsletter in 1990: "Try to make a living in this hobby and you'll learn about … deceit, unfair business practices, the lack of truth in advertising, price manipulation, collusion, restraint of trade, insider trading, patronage, extortion, payoffs and bribes, graft, plagiarism and, last but not least, hype."

In 1989, the Upper Deck Co. would transform the industry with flashy, high-priced cards aimed at investment-minded collectors. As the sales of new sports cards swelled to more than $1 billion a year, children began to flee the hobby, turned off by the pricey packs and confounding number of sets. The baseball strike of 1994 ushered in an industrywide hangover that still hasn't ended. Revenues from new sports cards have fallen to around $200 million a year, roughly one-seventh of what they were at their peak. While vintage cards like the T206 Honus Wagner and the 1952 Topps Mickey Mantle have continued to soar in value, baseball card's boom times produced no such valuable merchandise. Those 1988 Donruss cards, once considered a savvy investment, can now be bought in bulk for around 1 cent apiece.

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This piece was taken from Mint Condition© 2010 by Dave Jamieson and is published with the permission of the publisher, Atlantic Monthly Press, an imprint of Grove/Atlantic, Inc.

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