Upper Deck president Jason Masherah sounded alarm bells in the hobby with a social-media post that went viral Tuesday.
In an eight-paragraph post on LinkedIn, Masherah warned about high-end speculators driving up the cost of trading cards beyond the reach of the average collector and expressed concerns about the long-term sustainability of the market.
“I’m not saying the sky is falling. I’m saying we need to be honest about what’s happening,” Masherah wrote. “This isn’t sustainable growth driven by collectors who love the hobby. This is wealth concentration driving prices that most people can’t participate in.
“And if that money suddenly moves elsewhere to bet on something else? We all will feel it.”
Masherah joined cllct founder Darren Rovell to elaborate on his comments Wednesday, and the executive said trading cards have become part of the “new gambling economy,” comparing collecting to sports betting, predictive markets or investment in Bitcoin.
“There is now this built-in societal gambling economy that is very common here, and people are kind of looking for that Dopamine hit,” Masherah said. “Look, we’re in very much a bull-run market all the way through. People are able to make money, whether it’s on Bitcoin or stocks.
“If you look at stocks right now, the P/E ratios are almost at all-time highs. So people are overvaluing stocks in many cases. The same thing is happening in collectibles. It all works — until it shifts.”
While Masherah said he believes the high end of the hobby “will always be there,” he is worried the rising prices for new trading card products will price out many collectors, especially young people.
“That’s where you get concerned whether you lose collectors because they lose at some point,” he said.
Masherah said he was very surprised by the strong response to his post, especially since he believed he was “not saying anything that isn’t fact.”
However, he understands why the post was seen as polarizing.
“There are people taking advantage of the speculative nature of the industry right now and making a lot of money, so they don’t want anybody criticizing that,” Masherah said.
Some critics interpreted Masherah’s post as a direct attack on his competitors and taking a shot at Topps, which now owns the official licenses for the NBA and Major League Baseball, and Panini America, which holds licenses for the NFL and WNBA.
Though Upper Deck is currently known as the key manufacturer of licensed trading cards for the NHL and DC universe, the company is credited with releasing the hobby’s first “premium” cards with 1989 Upper Deck Baseball.
Upper Deck is also known for creating the hobby’s first ultra high-end product with the release of 2003 Exquisite Collection Basketball. Featuring game-used patches and on-card autographs, Exquisite stunned the collecting community when it originally retailed for $500 per pack.
Masherah responded by saying there are “market forces and some things being done to manipulate the prices and raise the prices in the industry.” He added that some of those increases are “natural” and others are “artificial.”
He said Upper Deck has had NHL and Marvel products that have gotten hot, but the company wasn’t “intentionally trying to take advantage of the speculation in the market.”
Masherah added the manipulation is “rampant” throughout the hobby right now, and he’s worried about prices being inflated through tactics such as shill bidding, unpaid auctions and private sales.
“What I’m most concerned about is the speculation where you see these hype trains, especially on social media, of certain players you need to invest in now, certain cards you need to invest in now, and what we’ve seen since the beginning of time in this industry is the market moves …
“When it moves down, sometimes people get burned, and they don’t get come back.”