THWC 431: FanCash: What's the Catch?

What is up? Everybody happy with Cage episode 431 brought to you by Arena Club by card ladder use code. Cage, save yourself a couple bucks. And by the Philly show, hair was looking nice today, so I didn't put on a card ladder hat. But you will see them because I have the entire rainbow of the card ladder hats. So, you know, as these episodes progress through the fall, you're gonna see everything from chocolate chip to gold to black. We got the American flag, USA 250. We're just gonna bust them all out randomly. You guys will have to guess which hat I'll be wearing. It'll be fun. Today's episode's gonna be a good one, though. I mean, I think they're all good, but I guess I'm kind of partial, right, Because I'm the one doing them. So. I think this, this will be a fun one. We're going to talk about fan cash. I mean, this was a topic that everybody was talking about at, at national starting Friday morning when we had a Beckett And I talked about this in yesterday's episode, but if you didn't hear that one, a 30 second summary. You know, Friday morning the national started off and there were, you know, protesters, Beckett signs, you name it, you know, marching up and down the street in front of the front of the national, in front of the convention center, which has huge signage for ebay and Whatnot as basically the big sponsors of the national competitors from a selling platform, you know, to Fanatics, you know, and obviously Fanatics is set up there. Tops is set up there. They have a humongous presence there and they're producing all the cards that are being sold on those platforms, the most part. So, you know, it is a, it's a funny ecosystem, a weird symbiotic relationship where, you know, the cards being sold on Whatnot, ebay for the most part. Anything being produced now in baseball, football or basketball is being produced by Fanatics and they're being sold on Whatnot and ebay and, and other places. But also Fanatics sells them themselves, right? They have their own auction house with collect and they also have their own live app that is, you know, direct competition with Whatnot and you know, the ebay live and the live selling is where, you know, that is where everything is moving. That is where everybody's trying to make a push. You know, everybody's trying to get those breaking dollars. Everybody's trying to get into there and you know, there's a, you know, significant competition and Fanatics live is, you know, is A couple years behind, you know, the whatnots of the world. And Whatnot has been doing this for, you know, for quite some time. That said, Fanatics has Fanatics backing, you know what I mean? They have the cards, you know, whether it's, you know, whether it's stated, not stated, you name it. If you're a breaker, you want to be in the good graces of Fanatics because you know, you want to get the Fanatics products. So breaking up Fanatics live just makes all the sense in the world. I'm not a breaker. I don't know the inner workings of that. But when I can tell you the inner workings on is fan cash, right? I mean I, I may be uniquely situated to tell you about fan cash and why this is relevant, right? So the, the protest, the Beckett that they, that they had there at the national was you know, people shouting and, and yelling, use fan cash. No fees. You know, the end of fees, fees, fees, fees. And, and you know what they came out with here was an announcement of if you sell on our platform and take payment in fan cash, there are 0% seller fees. Now you guys know this, right? If you sell in a traditional auction house, there's a, you know, there's a buyer's premium that gets paid, right? So if something sells with a hammer price of $10,000, the buyer pays 12,000, the house, the auction house gets 2 of it and the consigner gets 10. And there are different negotiated fees in between that depending upon the item that's being consigned. But ultimately the auction house takes something. This Fanatics is saying they're taking nothing. If your card hammers for 10, sells for 12 and you take your, your money, your proceeds in fan cash, they are going to give you the full 12 and fan cash and Fanatics gets nothing. But do they get nothing? And that's really where the conversation is. Why would anyone agree to this? What is the good, what is the bad and what is the ugly? And that's today's episode title, Fan Cash. The Good, the Bad and the Ugly. So let me tell you the good, the good is easy up front. The good is it saves you money, right? The good is that if you sell a card for $10,000, let's use 12. Instead of getting 10 grand on your $12,000 purchase, you're getting the whole 12. You're not losing a single dollar of that sale. You are getting all of it, right? And for people who buy and sell, for people who use Fanatics a lot, for people who are you know, breaking on there for people who are ripping live like you, you have a favorite breaker, you're on the platform a lot and you use money, you have an account balance. For you, this is a no brainer, an Absolute no brainer. You break on the platform, you get cards, you put them in your Fanatics vault, you put them in your, you know, your Fanatics account, your collect account, and you sell them with collect. Why wouldn't you take it in fan cash? The fan cash is put into your fan cash, you know, account and you could then use that the same way you'd use a credit card, a dollar, a paypal balance, a regular balance, anything to buy into breaks. So if that is you in this ecosystem, you're the perfect candidate to use this, right? If you're spending your money on the Fanatics app one-of-one this makes all the sense in the world. Even if you're not somebody who lives on the Fanatics app and you're just selling here and there, right? And you're not somebody who does breaks. If you're somebody who uses Fanatics auctions, right? If you buy something in the weekly, if you buy stuff in the premiere, if you're using that, the auction that, and you want to sell a card and you know that you're going to also be buying cards on Fanatics like most of us do. It makes all the sense in the world for you too. If you're going to sell a card, why wouldn't you put it in fan cash, get all of your money, get all of the proceeds, don't lose a single dollar, and then have that money to spend this week, next week, next month's premier auction, right? So the good is, is pretty easy, right? The good is no one else will offer you this. There's nothing like this in the industry right now. No auction house is offering this because how can they, they don't go out of business, right? The, they are offering this. You're going to get every single dollar of your sale. And I think the, the upshot of this is a lot of people use this ecosystem, a lot of people use Fanatics, use collect. They buy in the auctions, they buy on, on breaks, they buy into breaks. So I believe that you're going to see more cards put up for sale here in Fanatics. And then the flip side, people are going to have balances in fan cash, which is not cash. We'll talk about that in a second, right? You know, the bad of it, which I wouldn't even call it bad, but we'll get to the bad, it's not cat. You can't withdraw it. Know what I mean? Once you put it into the fan cash game. But because it's in there, the good for sellers is going to be, oh, I have this fan cash in there. You know, I'm thinking about buying this $100 card. I'll pay 102, I'll pay 104. Because I got to use my fan cash one-of-one It's in there. I have a balance, I might as well use it. You know, that's human nature. We all kind of do that. So it may even help lift the sales prices for people who are selling on Fanatics. You get kind of like a double benefit. If you're going to list your cards with with Fanatics over the next couple of months, one, as a seller, you're going to get all of your proceeds, you're going to get every dollar of the sale in fan cash. And two, you're going to get the benefit of people having more fan cash on account and looking to spend that money in the Fanatics ecosystem. Right? It's helping the breakers. If you're a breaker on Fanatics live, you're going to have an army of people now who are selling with Fanatics and have their money on account ready to spend, ready to break with you on that app. Because they can't take that fan cash over to Whatnot. They can't take it over to ebay Live for Fanatics, it's very smart. It is sticky money. It's very sticky. It stays in their ecosystem. You cannot take it out. You sell with them. You have to use it either in their auctions or on their lives. So if you're a seller, I see no reason why you wouldn't want to do this because I think you're going to maximize the amount of money you get for the card that you sell by selling it here. I think Fanatics is doing a great thing for people who consign cards with them to maximize the sale price, maximize the return to people who get that money. And also just before we finalize the good. I sold cards and been paid in fan cash and I bought cards at Fanatics Fest using fan cash. This is something they're able to do. And what I imagine probably these, you know, dealers who are part of the Fanatics system, you know, guys who are breakers who set up at shows, they have little QR codes at their table. Fanatics festival, everyone could have had this. There's a QR code use your phone, you boom, you scan it and you pay the dealer right there for the card you're buying in fan cash. It goes from your account to theirs. I imagine there are going to be, you know, in the next round of this, dealers who set up at the Dallas show, dealers who set up at the Philly show, dealers who set up who are, you know, who are breakers on Fanatics, who are on the Fanatics live. And the next step in this will be those dealers. Even though they're not at the Fanatics fest, those dealers will be able to, to have a QR code. And at their table, in addition to just taking cash, PayPal, Venmo, they can take fancare. So take it from me, right? The. There's definitely good to this fan cash ecosystem. And I can see it expanding. And if I were somebody who was looking to, you know, sell cards, I would, I would set this up and I would, I would take the fan cash I 100 would, you know, the bad things that people don't really think about right now. Right. Number one, I mean, this is the easy one. You can only use it on Fanatics, obviously. That's, you know, that's, that's number one limitation. Right? You sell a card and you get cash. You withdraw it, you can spend it on gold and you can spend it on ebay, you can spend it wherever you like. Hell, you could spend it on your rent, you can spend it on your mortgage, you can spend it wherever you like. Whereas fan cash, you're spending it on just the Fanatics app. Now, I'm. I want to say it's a little more wide than that. I mean, I spend a lot of money on jerseys every year for my son. You could use fan cash for that. You get fan cash for those purchases. You know, the, the Fanatics universe is a little wider than just kind of these cards and buying and selling into breaks and stuff buy tickets. So. But the bad, obviously limitation wise is you cannot, you know, take that money out. You're not withdrawing it to your bank. The bad for right now is because you can't withdraw it. I'm curious about the implications for taxes. And I know that probably other people will have that same question as well. You know, you're not getting cash. You're getting this, you know, ecosystem fuzzy dollar. I think you still have to report it. I will still report it 100%, but. But I don't know what the implications of that are because it's. You're not getting dollars. You know what I mean? I would tell you all to kind of, you know, Maybe talk to your CPAs about that if you're doing enough buying and selling. How taking it in fan cash as opposed to regular cash impacts that. That's just a question. I don't know really if I put that in the bad, you know, so more questions than you know, than answers for right now. The other bad, which is sort of in the fine print, the fan cash expires. I mean, you put your money into your regular account, that's your money. That's your money from now until the end of time. You know, you put it in fan cash, it expires in a year. I haven't heard a lot of people talking about this. That said, and by the way, there's other fan cash like you know, you use their apps, use their games and stuff like that. Some of them have 30 day expirations. You got to read kind of, you know, what the expiration is on them. But it's a one year fan cash expiration. Now that one year kind of, you know, it, it restarts based on getting more fan cash transactions or any more fan cash. So it's not just you know, a full like one year stop. Like you get your money, you're done. You know, that clock can be restarted if you continue to have fan cash transactions, et cetera, et cetera. But it's just one thing I haven't heard anybody talking about at all. So you should kind of look into that just to make sure. I'm giving you a well rounded thing because I spent a lot of time on the good. There is bad and there is know, potential ugly. And let's get into that right now. The potential for the ugly, they're gonna have a balance sitting there, right? And you know, there's a buy it now market so you can do that, you know, but there's Fanatics live so you can get into breaks. But there's also, you know, gambling aspects of this. And you know, fan cash is, is part of that ecosystem as well. You know, obviously Fanatics is getting into, you know, the sports betting market. They're getting into, you know, actual legitimate gamb. This fan cash ecosystem that they're creating is one and the same. And you're going to have sort of, you know, the ability on your phone to kind of take the money from the card you sell and go over and you know, use it in the, in the sports betting app, I believe, I'm sure that, you know, they're setting up this kind of sticky fan cash ecosystem so that you can use it across everything that they Do. And that's just one of those, you know, one of those things that needs to be, you know, monitored. Right, right. You need to make sure that you're, you know, all of this stuff we say, you kind of bet with your head, not over it. It's the same kind of thing. You know, I wouldn't want to see, you know, somebody sell a nice Ohtani card and then say, you know what, let's roll. You know, you can see it with all the coin flipping that goes on and all the dice rolling that goes on and all the, you know, the, you know, for lack of a better way of saying it, gambling that this, you know, this hobby has kind of, you know, been based on what the, the younger folks coming in. I've spent a lot of time about the new blood coming in. The 15, 16, 17, 18 year olds who are, I mean, adrenaline chasing. They are deal chasing. They, they like the deal, they like the action. You know, that is the, the exact market that when they have a fan cash account at 18, 20, 20, what, 21. Well, you know, or whatever age you know, you're able to gamble at. I try not to gamble that, that fan cash can be used for, you know, for, for, for sports betting. And that's the part of it that's, you know, interesting. I mean, look, it could have been used one-of-one Whether you had, you know, a fan cash balance or a regular cash balance or you had money in your account. If you wanted to gamble, you could gamble. The, the part that I'm trying to talk about here is, you know, it makes sense for Fanatics to keep that money on there because it's just they, there are a limited amount of ways you can use your fan cash and that would be one of them. Right. And you saw at Fanatics Fest if you were there, that there was a little area set up, you know, the Fanatics games kind of Area 21 and over and it was, you know, come in and one-of-one fan cash and that kind of stuff. And you know, that, you know that that kind of is a sign of what's to come. So if you're a hobby person and you're using this for the hobby and you buy and sell, whether it's on Fanatics live or you know, buy with their auct, I without hesitation would recommend using this. Right. I don't think that there's any, you know, downside to it. If you're going to be able to use your money. If you're somebody who's active and buys and sells on this platform, get all the money you can. That's the summary of that. The unintended consequence, the upshot of this is it's going to force your consignment companies to kind of up their game, right? Because the question is going to be, why would I use a consigner to put their, you know, to put the cards for me on. On Fanatics and pay a fee when I can sell it on Fanatics myself just by clicking a button and, and get a hundred percent of the sales price on Fanatics? Well, there's a pretty easy answer for that. You know, if it's a consigner who only uses Fanatics, that's a tough one that they, they should be a little nervous right now. But if it's a consigner that uses all the other folks, there are cards that sell better on other platforms. And the, the small fee that you're paying a consigner includes their ability to tell you where the best place to sell your card is. Right? They're going to tell you, this is a card that should sell on Heritage. This is a card that should sell on Goldin This is a card that should sell on Fanatics. You know, and maybe they even tell you, go ahead and take the, you know, go straight through Fanatics on that one. You know, if it's an honest. I know Acquire would do that. I know, you know, I know. You know, you know, the wharf would probably do that. You know, I'm sure MC would do that. I'm sure that that's kind of. But more importantly, those companies are going to have to now provide a value add. And I know a lot of them already do this, right? But if Fanatics is just going to let you sell on their platform and take all the money, they're most likely not promoting your cards for you also. So these consigners are really going to have to step up their game. They're going to have to try to sell these cards on their stories like they do. You have to promote them, you know, and in those stories, you take less of a fee, you know what I mean? Because it's not an auction house that's getting it. In order to compete with, you know, what Fanatics is doing, they're going to have to promote the cards while they're in auction. Some people do a better job of this than others, but, you know, they're going to have to, you know, earn that 5% fee or that 2% or whatever the fee is, 15%, whatever the fee is that they're Charging above and beyond the zero that Fanatics is charging now. That fee, it's going to have to be earned by them. They're going to have to make contact, have to drive higher bids. Their sales pitch now has got to be, yes, we can't give you a zero percent fee because we'll go out of business. We have to earn something. But what we're doing to earn that money is we're going to get a higher bid for your card for you. We're going to get you, we're going to maximize your sale price for you and it'll more than make up for the fee that we're charging you because we're going to drive attention and eyeballs to your item. That's, you know, because I'll tell you when there's an answer again, if I were a consigner of, you know, of cards, I would have been a little nervous because, you know, this is, this is the progression of the space. This is a smart move by Fanatics for many reasons. And you know, I can see it probably consolidating the consigner space a little bit because some people do a better job of, of adding value than others do. And you know, there's the fun little twist that I throw in at the end there. Fan cash. The good, the bad and the ugly. It was a lot of people were talking about this there. I have sold cards, collected fan cash, used fan cash to buy for, I don't know, the better part of a year now. And it is seamless. So I mean, like I said, I'm uniquely situated to, to talk to you guys about it. I use fan cash. You know, I buy cards every week from Fanatics. I have purchased cards from Breakers. I purchase cards of Fanatics Fest. I buy into breaks like I'm all over the ecosystem. And it is seamless. It's, you know, you basically have a wallet. It's the easiest thing in the world. So I recommend it if you are active in their ecosystem. 100. It's not all I would do, you know what I mean? If I had, you know, six cards to sell, I probably would put three in and then three elsewhere, you know, so that I had the ability to use my, you know, the card cash that I, that I sell, you know, and buy things in other auction houses. Sure. You know, I think the good on this significantly outweighs the bad. The ugly is a wait and see. I mean, we'll see what kind of guardrails they put on it. And you know, obviously personal, you have responsibility for your own actions as well. So let's not forget that in this space. So let's throw that out there. That's a episode 431 fan cash. The good, the Bad and the ugly. And I think there's a lot of good. And that is a full episode brought to you by Arena Club by card ladder, use code cage and save yourself a couple bucks. And by the Philly Show. Talk to you guys soon. Take care.