Some Random Baseball Card Business Musings

[Tennis13]

It's a slow night, but I've had a lot of ideas kicking around in my head, so I thought tonight I could finally write them out, and see what other people thought.

1) A physical baseball card ETF. Everyone tries to figure out how card values are fluctuating, where they're moving, etc.....what would be really cool would be to get 100 cards or maybe 200 cards together and form the Baseball Card ETF. It would be a price-tracking gauge for the industry. How would it work?

a) Each person or persons would supply a card or card(s) to be added to the ETF. The ETF would then be composed of these cards as selected by the committe to find a sample of 100 or 500 or somewhere in between of cards that are representative of the overall market. This would include vintage (T206 Wagner), modern (Some Trout or Jeter card) and everything in between. It would be the benchmark and be a representative aggregate pricing metric for the industry.

b) How would the ETF be assembled? Well, each person that submits a card that is chosen would then have their price indexed versus last sales, as well as other members of the ETF (let's say 50%) assessing what they believe is fair market value for the card, and taking the average and having the card supplier agree to that as the fair price.

c) This pricing would transfer into ownership of the ETF -- let's say the 100 cards are valued at $100, and the card you supplied was worth $5, then you'd own 5% of the ETF. Let's say there's 100 shares, you'd own 5 shares. They would be voting shares, and they'd be able to be used to select the management committee.

d) Here's where it gets interesting -- in order to get those shares, you give up ownership of the individual card, and in turn own shares in the ETF. You're diversifying your risk, but you're also getting access to 99 other cards you may not have, but would love to be part of your collection.

Well, you might say, this really sucks, because why would you go from owning 1 awesome card to owning shares and not really owning any cards at all? Well, 2 things. First, if the value of the ETF goes up, you can sell your shares to an outside investor who wants in on the ETF, and you may profit more than you would have otherwise and maybe go buy your card again if you'd like. and 2.......

2) The ETF would then be housed near a baseball field or sports stadium somewhere with a ton of foot traffic -- think Fenway or Wrigley or Lambeau -- and it would be displayed as a museum piece, where people could come in before or after a game, and pay $10 or $5 to go to the National Sports Card Museum. I've looked online, and there's not really a good museum for baseball cards out there, aside from the Halls of Fame. So, as an ETF share owner, you'd own part of the physical ETF, but you'd also own your share of the sports card museum, which hopefully would be profitable in its own way, and would actually DISPLAY all these awesome cards we have locked away in our safe deposit boxes.


So, to recap: You have the good card or 2, it gets selected, it gets priced, and if you agree with the price, you get that % of the ETF. ETF then gets displayed at a museum, of which you own a certain % of that via the ETF. People get to see the cool cards, and everyone profits (if it's run efficiently).

I just felt like I needed to share this.