Bloomberg Profiles Goldin Auctions in “King of Cards”

Ken Goldin arrived at his office in Runnemede, N.J., at about 8:30 p.m. on March 6 and ordered a Philly cheesesteak with pizza sauce from Luigi’s restaurant. Goldin is a former triathlete and normally a health freak, but he’s also superstitious, and the pizza steak—no onions, extra sauce on the side—had brought him luck recently. In November his company, Goldin Auctions, sold $16 million worth of sports memorabilia, a personal record at the time. In January he booked $36 million, more than he’d done in all of 2019.

For March, Goldin had a bigger number in mind: $40 million. Thousands of potential buyers had started placing bids that week on more than 2,000 items, including a bat used by Cal Ripken Jr., sneakers signed by Michael Jordan, and at least five trading cards Goldin thought could earn more than $1 million each, including rookie cards featuring LeBron James, Kobe Bryant, and Roberto Clemente.

On auction day, Goldin speaks with only a handful of buyers and sellers, serving for those VIPs as part financial adviser, part therapist. He sets expectations for sale prices, counsels on when to bid and hold, and calms nerves as prices escalate. One buyer, who agreed to be identified by only his first name, Spencer, wanted to discuss three cards: the Bryant, the Clemente, and a 1952 Mickey Mantle. Spencer started buying from Goldin two years ago, initially spending $40,000. Now he’s up to about $3.5 million. “You’re going to make sure I get something?” Spencer asked. Goldin assured him he would.

Spencer landed the Mantle, though he was outbid for the biggest prize of the night, Bryant’s 1996 Topps Chrome Refractor card, which shows the former Los Angeles Lakers star driving to the basket, surrounded by chrome edges that refract the colors of the rainbow. Bryant’s cards have long been among the sport’s most coveted, because of his Hall of Fame career, but their prices have soared since his untimely death last year. This one was especially valuable: It had been graded 10 out of 10 by professional authenticators, one of only two of that particular card to achieve that rating. Cards are graded on how pristine their corners, surfaces, and edges are, and how perfectly the photo is centered. Scratches, stains, or anything else affecting the overall “eye appeal” lower the rating.

Bidding on Goldin’s live auction site had started at $250,000 and passed $1 million before he took a bite of his pizza steak. Soon a bidding war erupted. Someone offered $1.26 million. Moments later, a rival bid $1.36 million. The first person countered with $1.5 million. The value of the card had jumped $500,000 in two minutes.

But 10 minutes before the auction was scheduled to close, customers started calling to say they couldn’t place bids. Goldin went live on Instagram to blame SimpleAuctionSite. com, his tech provider, vowing never to use it again. (Chief Executive Officer Bob Freedman says his company, which supplies more than 150 businesses with auction software, was hacked. “We’ve hired a security firm,” he says. Goldin still uses the platform.)

The site was back online about 30 minutes later, and by the time the extended bidding session closed just before midnight, Goldin had sold $41 million in cards and memorabilia. The Bryant card went for $1.75 million, the highest sum of the evening. “My little company running on 2002 software is one-quarter the size of EBay,” he said on Instagram at about 1 a.m., referring to the volume of his sports memorabilia sales. In a late May auction, Goldin surpassed $50 million in sales, putting the company at $200 million for the year and on pace for $500 million. It keeps 20%.

 

Goldin, who’s 55, has been buying and selling cards since 1978, when he traded some electric racetrack cars for his friend’s collection of about 5,000 baseball cards, including ones featuring Hank Aaron, Willie Mays, and Nolan Ryan. Over the next four-plus decades, Goldin became the hobby’s most vocal ambassador, appearing on HSN, QVC, CNBC, and any other station that would let him talk up the industry. He started his auction house in 2012, and today he streams live on Instagram at least once a week for up to an hour, opening packs from a full box of cards—a “break,” in industry terms—while taking questions with his son, Paul, who’s 7.

As they stream from their home, Paul identifies the rookie cards of promising young stars. Goldin interjects to grab certain players, show them to the camera, and place them in protective plastic sleeves. In the past year, his following on Instagram has increased from about 1,000 to more than 38,000. Pro athletes including Cleveland Indians reliever Bryan Shaw and Philadelphia 76ers guard Seth Curry have joined the streams to discuss the market; Curry even invited Goldin to a game. In February, Goldin opened a box of Pokémon cards with YouTube star Logan Paul. “We have something the hobby has never had before,” Goldin says. “All of a sudden, we’re cool.”

The sports memorabilia industry is on track to see almost $10 billion in sales this year, most of which will come from trading cards. Just as investors with too much time and cash on their hands during the pandemic have bought cryptocurrencies, nonfungible tokens (NFTs), music rights, and other alternative assets, they’re funneling cash into cards.

Card sales on the site StockX, which started as a sneaker exchange, are up 4,000% in the past year, and the eight biggest card sales ever have happened in the past 12 months, according to the Action Network, a sports media company. Several businesses, such as Rally Rd., now let investors buy fractional shares of a card or collectible. Professional Sports Authenticator Inc., a company in Santa Ana, Calif., that’s been grading top cards since 1991, is overwhelmed with requests and has stopped taking on most new business to work through the backlog.

The boom is being driven not by balding collectors obsessed with the baseball stars of their youth, but by younger fans around the world interested in sports they grew up with, such as basketball and soccer. They’re paying for proven stars like Bryant—and betting on players’ futures at prices that fluctuate depending on how they played that night.

Of course, as soon as people can regularly interact with friends and family in person, they may realize there are better uses for their money than a piece of cardboard. “I don’t know where the ceiling is anymore,” says Bill Simmons, the popular podcaster and collector, whose media company, the Ringer, devotes a show to the hobby. “The market is so out of whack, it’s not worth it to buy cards right now. Demand is too high.”

In 1951, Topps Co. started using baseball cards to sell its Bazooka gum. The next year, a company executive named Sy Berger designed a set that included player biographies and statistics. They were so popular that Topps refashioned itself from a candy maker to a trading card company.

The average customer in the next few decades was a kid like Goldin. Growing up in South Jersey during the ’70s, he worshipped the Philadelphia Phillies, in particular third baseman Mike Schmidt and pitcher Steve Carlton, now both Hall of Famers. Goldin would go to his local pharmacy to buy new packs and compare them with friends. When he was about 13, he and his dad went to a flea market and bought six or seven trash bags filled with cards—70,000 in all—for $70. Goldin spent months sorting the collection, keeping the best cards for himself and setting aside the rest to sell so he could buy more. He took out an ad in a new publication called Sports Collectors Digest. He had no idea what his cards were worth, but he figured it was more than $70.

Goldin and his father, Paul, didn’t want to be collectors. They wanted to start a business. Their idea was to sign players to exclusive autograph contracts, paying them a fee and reselling signed cards at a markup. They founded Score Board Inc. and got legends like Mantle, Mays, and Joe DiMaggio on their roster. Goldin later targeted young players as they came out of college.

In the early ’80s, manufacturers such as Donruss joined Topps in the market. Card stores opened across the U.S., with conventions offering even more opportunities for buyers and sellers to connect. “The 1980s took what was otherwise a niche, localized business into a nationwide industry,” says Joe Orlando, CEO of Collectors Universe Inc., which owns Professional Sports Authenticator, the grading firm. The Goldins took Score Board public in 1987, and it did $1 million in sales that year. That figure grew to $20 million by 1989, thanks in part to TV appearances in which Goldin and athletes would hawk signed photos, bats, and cards.

That year, Upper Deck Co. issued its first line. The company’s high-gloss cards were printed on thick paper stock, had holograms, and cost $1 a pack—more than double what Topps cards cost. Upper Deck’s card for rookie phenom Ken Griffey Jr. “was the first card expensive in the moment for a player who hadn’t done anything,” says Simmons, who, like Goldin, has started doing breaks with his son on Instagram. “What we didn’t realize was Upper Deck was cranking out an incredible amount of inventory. There were a kajillion out there.”

Score Board’s sales peaked at more than $100 million in 1994, when Goldin was a regular on Don West’s nightly sports memorabilia show on the Shop at Home Network. (The infomercial-like broadcast was parodied by Will Ferrell, playing West, on Saturday Night Live. “Kirk Cameron just called, and he even can’t get through,” the comedian says in a sketch.) In one late-night call-in appearance, Goldin promoted his “All Sports Plus” box, a collection of cards that went for $99.95. He called it “the greatest trading card product in the history of mankind.”

As the decade neared its end, the oversupply issue got out of hand, with manufacturers combining to produce more than 100 different rookie cards for some players. The period became known in the hobby as the “junk wax” era—early baseball card wrappers were made of wax—because the supply had so devalued the product. Goldin left the company in 1997 but continued to sell collectibles. By the next year, the market had contracted enough that Score Board was in bankruptcy. Pinnacle Brands, which owned several top trading card lines, filed the same year; Fleer joined them a few years later. Goldin continued his appearances on QVC and HSN, but interest dwindled. “It went from me going on the air and selling myself every couple weeks to less and less business,” he says. For the next few years, he handled marketing for baseball superagent Scott Boras.

The Great Recession renewed interest in alternative assets, and Goldin saw an opportunity. But the used-car salesman vibe of his TV spots had made him an outcast in the staid auction world, where Heritage Auctions scored the top vintage cards. “When talking to bigger auction houses, they’d laugh about it and think of him as that guy from TV,” says Ryan Schinman, an avid card collector who invested in Goldin Auctions in 2014.

Schinman, co-founder of Mayflower Entertainment, which books music acts for corporate events, says he was attracted to Goldin’s passion. Goldin often messages buyers at 1 a.m. to talk about new cards he’s procured, and he sometimes stays up until 4 sorting through collections to see what he wants to buy. “I tend to partner with people who have that kind of work ethic, where they don’t know how to turn it off,” Schinman says.

Their team secured a handful of great cards in those years, but they struggled to get sellers to see the company as a top-tier forum. In 2016, Goldin hosted the Great American Trading Card Auction. A friend approached him about selling an Upper Deck LeBron James rookie card at the event, but he was wary; for his entire career, most serious collectors had only wanted cards featuring baseball players from before 1960 who were assured a spot in the sport’s pantheon. He thought he’d get less than $100,000 for the James card. He got $312,000.

Over the next couple of years, Goldin studied the contemporary market. It has evolved since the ’90s: The four main sports leagues—MLB, the NBA, the NFL, and the NHL—now have exclusive contracts with companies such as Topps, Upper Deck, and Panini to limit supply and avoid a second junk wax era. New cards are available at $3 to $5 a pack, but risk takers can spend as much as $5,000 on special edition packs that are more likely to have rare cards.

Goldin has scored some valuable collections. One, known in the industry as the “Puerto Rico Find,” was valued at $20 million thanks to its rare Upper Deck basketball cards from 2003-08. Last August he sold a rookie card for Los Angeles Angels outfielder Mike Trout from cardmaker Bowman for $3.9 million, then a record for a single card. A month later, he sold a Panini National Treasures rookie card of Milwaukee Bucks star Giannis Antetokounmpo for $1.9 million, a new high at the time for a basketball sale. “We made ourselves the go-to guys right when everything took off,” Schinman says. “If you had a modern card, you were foolish to go anywhere else.”

This year, a one-of-a-kind card featuring NBA star Luka Doncic sold for $4.6 million in a private deal that Goldin wasn’t a part of. Doncic is a promising young star; he won Rookie of the Year in 2019 and guided the Dallas Mavericks to the playoffs this season and last. But no one’s writing the inscription for his Hall of Fame plaque just yet, making the sale a Rorschach test for how buyers feel about the industry’s future.

Brandon Steiner, who runs sports memorabilia marketplace CollectibleXchange, lived through the boom and bust of the ’90s and sees the Doncic sale as evidence of an overheated market. “In a few years the bubble will break, and it will be a black eye for the industry,” says Steiner, who has 60,000 pieces for purchase on his site and runs a separate company that helps athletes sell merch directly to fans.

For Goldin, the Doncic sale is reason for optimism. Millennials and Gen Zers who grew up in the ’90s and 2000s are more interested in Bryant and James than in old baseball players. And though rare baseball cards still fetch the highest prices—a Honus Wagner with a grade of just 2 sold for $3.75 million at Goldin’s May auction—basketball and football are the fastest-growing markets, and soccer isn’t far behind.

At the same May auction, a Michael Jordan card sold for $2.1 million and a Tom Brady card went for $522,750. One featuring 21-year-old point guard Ja Morant sold for more than $55,000 the day after he and the Memphis Grizzlies knocked the Golden State Warriors out of the playoffs. Morant isn’t Jordan—who is?—but watching that money turn into, say, $500,000 is part of the fun. Goldin also dipped into the NFT market at the auction, reselling more than three dozen TopShots—live NBA highlights authenticated on the blockchain. They included a James dunk, a Kevin Durant three-pointer, and a Steph Curry assist, with one set of clips going for almost $48,000. “The kids want to wake up and look up box scores and see how their players did,” says Nat Turner, a prominent 35-year-old collector who invested in Goldin Auctions.

Turner, who sold his health-care company for $1.9 billion in 2018, owns tens of thousands of cards, including 2,000 Jordans. He buys daily on EBay, the largest marketplace for the hobby, and he’s paid more than $400,000 for a card after someone messaged him on Instagram. (He won’t name the player.) His activity has made him a celebrity in the industry. He gets up to 100 DMs a night from people looking to talk about cards, he says, many of them strangers. This year, Turner and New York Mets owner Steve Cohen, the hedge fund billionaire, led an investment group that acquired Collectors Universe for $853 million.

Investors are betting there are more diehards out there. In February, Goldin sold a majority stake in his company for $40 million to investors led by the Chernin Group, run by media mogul Peter Chernin. The deal also attracted athletes (Durant, Dwyane Wade), YouTubers (Paul), podcasters (Simmons), and billionaire NBA owners (Mark Cuban). Ross Hoffman, a former vice president for partnerships at Twitter, took over as CEO. He’ll oversee day-to-day operations, the construction of a new bidding platform, and the building of a central repository for sales data, which will open up the market to the international buyers who are just coming online. Goldin is now executive chairman and cheerleader-in-chief.

In the meantime, his investors want to capitalize on his social media popularity. Chernin Entertainment is pitching an unscripted TV show set in the world of trading cards that will be produced by former ESPN executive Connor Schell and Pawn Stars producer Brent Montgomery.

Goldin has regaled potential buyers of the show with his stories. Last month he got a call from a potential client who said he had an ungraded collection from the ’50s and ’60s with multiple Mickey Mantle rookie cards. Goldin drove five hours from his home to Sag Harbor, N.Y., to inspect it. He found binders filled with every Topps baseball card produced between 1958 and 1983. Most were in excellent condition, and he estimated the collection was worth between $7 million and $10 million. He remembers a time, not too long ago, when he wouldn’t have been anyone’s first call. Now things are different. “I’m getting all my deals ’cause I’m Ken Goldin,” he says. “It’s so freaking weird.”

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