In the 1980s and early 1990s, baseball cards became a popular investment. Prices increased to unsustainable levels, creating what we now call the baseball card bubble. And then, in 1993-1994, the bubble burst. The baseball card market crash affected some cards more than others but the overall effect was severe.
Here’s what happened and why.
What attracted investors
The 1980s were a weird time. In 1987, the stock market crashed. The bond market had its own problems, being flooded with so-called “junk bonds” that paid high interest, but carried considerable risk. So investors turned to collectibles, hoping to find a suitable alternative. Sports cards, especially baseball cards, became a hot investment.
Baseball card companies were happy to oblige. Rookie cards of young star players like Don Mattingly, Dwight Gooden, Roger Clemens, Jose Canseco, Rafael Palmeiro, and Ken Griffey Jr became prized possessions, worth tens or even hundreds of dollars. In the late 1980s, I even heard of investors buying up large quantities of 1987 Topps Brett Saberhagen cards because they couldn’t secure large enough quantities of his 1985 Topps rookie card.
No, I am not making that part up. You can decide whether the prevalence of cocaine usage in the 1980s and the hoarding of Bret Saberhagen’s third-year cards were related.
The baseball card industry boomed. Baseball card shops popped up all over the place. Card shows became a regular event, as big and as common as gun shows. Even small towns had a couple of card shows per year.
My seventh-grade teacher warned us this was a bubble. A whole bunch of us had to learn it on our own. At least I could use age and inexperience as an excuse, but plenty of adults fell for it too. I was perfectly content to have one 1987 Topps Bret Saberhagen card.
It’s hard to point at one single thing that caused the baseball card bubble to burst, but I think I know the biggest factor. The rest just kept it from blowing again.
The strike of 1994
In 1994, baseball players went on strike, and the commissioner had to cancel the World Series. Sports fans had a hard time feeling sorry for athletes who made a minimum of $100,000 a year, and an average salary approaching a million a year. Among the general population at the time, the average salary was $23,753.
Before the strike, even casual baseball fans collected cards. They had a price guide and used it to track card prices, even on a monthly or biweekly basis. They were buying cards on a regular basis, then using the guides to try to trade cards for a profit. A profit on paper, at least.
After the strike, the number of fans dropped. The number of fans who collected cards dropped even more. The number of people who wanted a 1985 Topps complete set plummeted almost overnight, and that undersupply of 1985 Topps Bret Saberhagen cards turned into an oversupply. Today you can buy any 1980s card set for less than it cost in 1989.
The PED scandal
In 1998, Mark McGwire and Sammy Sosa launched a challenge to Roger Maris‘ 1961 record of 61 home runs in a single season. Their chase for 62 home runs revived interest in baseball. McGwire hit 70 home runs that year and Sosa hit 66.
And then, in 2005, along came Jose Canseco. Canseco’s 1986 Donruss rookie card peaked at a value of $300 in the late 1980s, but came crashing down as injuries diminished his performance. He retired in 2001, then in 2005, he wrote a tell-all book called Juiced, where he alleged none of what you were seeing was real. He said he used performance enhancing drugs, said many of his former teammates did too, and even claimed he introduced some of those teammates to the wonders of steroids. Among them was Mark McGwire.
Lots of people believed him. Some were skeptical. The question, in my mind at least, wasn’t whether Canseco was in position to know. Of course Canseco knew whether this was happening. The question was how much he was exaggerating. Two years later, the Mitchell Report confirmed baseball had a problem. It didn’t matter if Canseco had all the details right. Many of the stars of the 1980s and 1990s suddenly had a much weaker Hall of Fame case.
The third problem that caused values of 1980s and 1990s baseball cards to plummet was overproduction. Topps, Donruss, Fleer, Score and Upper Deck just made too many cards. When millions of people wanted them, it wasn’t a problem. Today, everyone who wants a Mark McGwire rookie card probably has several. When the potential market shrunk, the card industry shrunk with it.
Cards from the 1970s and earlier remain valuable because there aren’t enough of those cards to go around. So the baseball card bubble didn’t have too much effect on those cards. It had no effect whatsoever on pristine condition vintage cards of star players. Only a few dozen 1952 Topps Mickey Mantle cards in Near Mint condition or better exist, and far more than a few dozen people want one. Those cards are worth far more than they were in the 1980s, even as Jose Canseco’s cards plummeted. Most vintage Hall of Famers’ cards are worth at least what they were in the 1980s.
We probably should have known the cards were being overproduced, but nobody publicly stated how many cards they were making. As the 90s wore on, Ebay confirmed for us what collectibles from the 1980s were scarce and which ones were common.
They were human after all
I guess there was a fourth factor. It happens every decade, but we really noticed it in the 1980s. For any number of reasons, many 1980s stars faded sooner than we expected. Sometimes it was injury, sometimes it was overuse, and sometimes it was drug or alcohol problems. For players like Dwight Gooden and Darryl Strawberry, it was probably a combination of all three.
The combination of more cards than people wanted of players who weren’t what they seemed turned into a toxic mix, even after fans forgot the strike of 1994. That’s why the bubble burst on cards from the 1980s and 1990s and collectors refer to it as the “junk era” today.
What to invest in
It’s news to some people that card prices have recovered. At least, the cards that are going to recover. Junk wax-era cards probably never will have much value.
If you want to avoid another baseball card market crash, I have some advice on what baseball cards to invest in. But frankly, collectibles are always a riskier investment than traditional investments. Collectibles are fickle. My dad’s generation drove up the cost of Lionel trains. Today prices are falling because Gen X wants to collect video games, not electric trains. By the time I was my kids’ age, I had a large baseball card collection. Neither of them are interested in baseball cards. For that matter they aren’t all that interested in the sport either.
Will we have another baseball card bubble, or baseball card market crash? Maybe not. Then again, if my kids and their friends aren’t interested in them, the value may fall. But it may be after our lifetimes.