Sports trading cards may just be pieces of cardboard
splashed with printed images of sports figures on one side and their profile
and statistics on the other, but their history can be traced back over 120
years. They have stood the test of time.
Sports trading cards were first produced and offered in the
1880's by tobacco manufacturers who would include them as a free accompaniment
to purchasers of their products. Gum and
candy makers soon employed the same marketing strategy and by the 1930's, the
collecting of trading cards, along with other sports memorabilia, was rather
commonplace.
It was not until the 1950's, however, in what many still
think of as "The Golden Age" of sports, with the emergence of
television and the rise to fame of athletes like Mantle, Mays, Unitas, and
Russell, that sports card collecting began in earnest, taking its place as the
favorite hobby of millions of Americans.
Professional sports has since evolved beyond entertainment
into what is today, one of the nation's biggest businesses, and its trading
card industry has undergone similar transformations. Local trading shows have become a weekly
routine in virtually every community and the literally minute-to-minute trading
of cards via national audiences has exploded by way of the Internet auctions.
Some popular individual cards now regularly sell for
mind-boggling dollar amounts. The
average price of the most actively traded cards hovers around $150 -- as you
will see on thePit1 exchange.
The trading of sports cards now makes up a multi-billion
dollar industry. It is dominated not by
children flipping cards during recess, but avid, knowledgeable sports fans
seeking wise investments.
The Internet has revolutionized the sports card marketplace.
It isn't about school children looking for free bubble gum
anymore. It is now a multi-billion
dollar industry. For many, it's no
longer about collecting for sentimental value or nostalgia. It's about earning a profit. Collectors are now investors, and vice versa.
Sports cards have always presented opportunities for
long-term capital appreciation. Ask
early investors of Kurt Warner, Randy Moss, Pedro Martinez, Alex Rodriguez and
Vladimir Guerrerro, just to name a few.
But you better know your sports and do your research--just ask those who
bought Ryan Leaf instead of Peyton Manning or Ricky Williams instead of
Edgerrin James.
The prices of many cards actually fluctuate game to game,
especially in football's short season.
When Peyton Manning blitzes the Jacksonville Jaguars with 4 touchdown
passes and over 400 yards passing on Monday Night Football, his card price may
increase noticeably. When he struggles
with three interceptions or loses a playoff game, the value of his card may
dip.
The Internet auction is largely responsible for creating
this exciting, previously unseen trading phenomenon. thePit.com now revolutionizes the experience
altogether by launching a much more advanced and efficient business model: a dynamic,
sports card stock market that delivers transparent, live market prices and
absolute liquidity so that you can
always buy and/or sell instantaneously from one single trusted source. You can refuse delivery, avoid shipping
costs, and trade in and out of your account.
We like to say it is where eBay meets E*Trade -- a place where every
avid sports fan can finally put his or her sports knowledge to practical use
and for the first time ever -- meaningfully and tangibly invest in sports
players.
What was once fantasy is now reality.
Factors Affecting Value
Many wonder why sports cards command any value
whatsoever. After all, they are just
pieces of cardboard. Nostalgia, artistic
merit, and even just the simple popularity of a particular sports figure appear
to make many of them some very sought after commodities.
More fundamentally, however, the inherent value of sports
cards lies in their scarcity, just like diamonds, gold, or any other precious
commodity. It is exciting to many,
including the founders of thePit.com, to have in their possession one of the
limited production, first ever manufactured cards of Michael Jordan, fresh out
of the University of North Carolina, back when he still had hair. Who knows what this gem minted card will be
worth in 25 years. It currently trades
for over $40,000. A Honus Wagner T206
Sweet Caporal Cigarette baseball trading card was auctioned off for a
staggering $1,100,000 on eBay in July of 2000. In pure bottom-line economic terms, just like the stock
market, what ultimately determines the market price of a particular player's
card is popular demand -- the price people are willing to pay. As the public analyzes, predicts, and
sometimes gambles on which company (whether it be a high flying Internet stock
or a telecom sleeper) will become the next Microsoft, so too does the sports
card trader try to figure out who will be the next Michael Jordan. It is often not about a company's current
profits or a player's current stardom, but about its or his future potential
and future growth.
Some of the other more important factors that distinguish
one card's value from another are:
Rookie cards - Card manufacturers distribute a new card for
each current player or prospect each year.
More often than not, however, a player's rookie card commands the most
value. A rookie card is a player's first
year of issue in a particular manufacturer's card set. For example, manufacturer Upper Deck produces
a card for Ken Griffey Jr. each year. It
produced its first card of Griffey, however, in the set it distributed to
retailers in 1989, this is Griffey's rookie Upper Deck card. This is also his most valuable Upper Deck
card.
Quality of Manufacturer - Countless manufacturers have
popped up over the years to produce cards.
Even McDonald's has given away its own sports cards. As a general rule, only those cards produced
by time tested, "brand name" manufacturers have any real value. These include Topps, Fleer/Skybox, Upper
Deck, Playoff, and Pacific.
Card Condition - Mint
cards are obviously worth more than cards in lesser condition. Grading companies have recently become an
overarching, dominant force in the industry, and collectors usually pay for
these services to enhance their cards' values.
Highly graded cards command substantial premiums. More importantly, grading has helped to
commoditize cards, making them the perfect subject of a stock market like
thePit.com. Read more about grading and
"investment grade" cards.
Quality of the Sports Athlete - Of course, the prices for
cards of star athletes are much higher than those for average or mediocre
players, whose cards often command no value whatsoever. Most interesting, however, is collectors'
interest in emerging players whom they predict might one day reach hall of fame
status. Cards of these individuals are
usually in high demand as collectors seek wise investments. Prices of these cards are also among the most
volatile as they are determined by ongoing player performances.
Grading
Historically, no rational collector would have ever
purchased a trading card without first physically examining its condition. All descriptions usually took the form of
general terms (mint, near mint, very good, etc.), condition was always in the
eye of the beholder, and haggling, time consuming buyer/seller negotiations
inevitably ensued.
All of this changed in the early 1990s with the advent of
neutral, third party professional grading companies. These services employ state of the art
technology and highly trained professional personnel to assign a numeric grade
to the card (e.g., a 10, 9, or 8, etc.).
The company then forever preserves this certification by encapsulating
the card in a sturdy protective, sonically-sealed holder prominently revealing
the grade.
Not only do parties dealing in graded cards no longer debate
condition, but they can now trade, with absolute confidence, without even
having ever physically seen or touched the card. There is now no difference between identical
cards graded identically, for example,
one 1989 rookie Ken Griffey Jr. Upper Deck card, graded PSA 9, is the same as
another-- and can be traded as such. A
graded sports trading card is, effectively, a true sports commodity, an
interchangeable item. Note that thePit.com does not buy or sell cards that have
qualifiers of any kind.
Predictably, the Internet revolution, and its need for sight
unseen trading, has coincided with what has become a recent industry wide
acceptance and meteoric explosion of grading companies ago.
Today, ungraded cards, even those which might appear to be
in clear mint condition, are quickly becoming outdated and of much less value
than their graded, certified counterparts.
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