If you are like most sports fans and collectors of sports memorabilia, you can’t help but be blown away by recent auction sales. In just the first half of this year, a Kobe Bryant Topps rookie card sold for $1.796 million, a Wayne Gretzky 1979 rookie card sold for $1.29 million, a 1928 Stanley Cup puck sold for $66,000, a LeBron James rookie card sold for $1.72 million, and in a great cross-over for Sneakerheads, Kanye West fans, and sports collectors, a pair of West’s 2008 Grammy-worn Nike Air Yeezy prototype sneakers sold for $1.8 million! And these are just the sales we’ve reported on in Ken Hall’s monthly Gavels ‘N Paddles column! Google the subject and you will find many more examples of the ‘out-of-the-park’ prices high-end sports memorabilia items are realizing in today’s auction market. With prices like these, there doesn’t seem to be much hope for the average collector wanting to own a price of iconic sports history.
Here’s a win-win solution Collectable’s CEO, Ezra Levine, hopes will gain traction and level the playing field in the sports memorabilia market: fractional ownership. Now, for as little as $10-$25/share, you can buy in on the ground floor of an investment that makes you part owner of a Wilt Chamberlain ’59-’60 Rookie Home Uniform, Mickey Mantle 1954 Bowman PSA 8 trading cards, and other cards and items from such sports icons as Bird/Dr. J/Magic Johnson, Mickey Mantle, and Sandy Kofax without breaking the bank. While your shares will never give you physical ownership of the item, you benefit from asset growth as you do when you purchase shares of stock in a company.
Its business model is simple: Collectable sources valuable, rare sports memorabilia (such as sports cards) from auction houses, owners, and high-end collectors, and executes an IPO for that collectible. Sports fans, investors, and collectible enthusiasts can then buy a share (i.e., an interest stake) of the piece at an affordable price. With a buy-in of as little as $10/share, anyone potentially can afford to own a fractional share of something worth millions and ride on the investment’s coattails in the resale marketplace. In essence, Collector is building its own Memorabilia “Stock Market,” with investors having ready access to a secondary market on the platform for buying and selling their shares.
I am not here to endorse Collectable as a company or its investment platform for sports memorabilia. In fact, the Company only recently caught my attention when CBS New York news did a profile on Collectable last month. As I did more research on the Company, I saw this as a topic you might be interested in learning more about, as well, as it opens the door for new ways to think about alternative investment ownership in what I call 401K collectibles.
Collectable was launched in 2014 as a sports auction data company, and went on to become the #1 aggregator of historical pricing data for sports memorabilia auctions; however, this past year the company shifted its business focus to launch an investment platform dedicated to the sports memorabilia marketplace.
The Company’s first IPO was a 1953 Topps Mickey Mantle card in mint condition, which sold out at $2.5 million. This gave buyers a rare opportunity to own the “best, freshest preserved ’53 Topps card” in circulation for an opening price of $25/share. Last week, shares in this card were trading at $31, up 19.4% in less than 12 months. In a May 6, 2021 initial public offering of Wilt Chamberlain’s full Philadelphia Warriors uniform worn during his rookie season in the NBA, over 1,000 investors purchased $956,000 worth of shares at $10 each. The initial public offering sold out in one hour!
Collectable is not the first company to venture into the fractional ownership space, but its exclusive emphasis on sports memorabilia and its unique business model, make the company’s approach a game-changer in the high-end memorabilia marketplace when it comes to not only who’s buying but what items the company is able to attract for its investors.
With the Collectable business model, an athlete or owner can retain a majority equity stake in their own offerings. So as the value continues to go up after the IPO, the athlete also stands to financially benefit. This should allow Collectable to source extremely valuable items from athletes who may not want to fully part with their past but still want the ability to cash in on it. They’ve found owners are more willing to consign a portion of their asset than they are to sell outright because they still retain upside. An example of this is the previously-mentioned sale of the Wilt Chamberlain uniform. The jersey’s owner, David Kohler of SCP Auctions, is retaining 25 percent equity in the uniform, which carries a value of over $1.2 million.
I believe we will be hearing more about fractional ownership in the future as it extends into such high-end collector markets as wine and art. Many see it as a democratization of the marketplace, while others might use the word capitalization.
When I shared the topic with others in advance of its publication, the visceral response from the collectors and antiquers I spoke with was, “it’s not collecting if you can’t own the object.” Collectors collect objects, not shares in objects, for the higher purpose of telling a story with the items in their collection. But for the items out of our reach anyway, why not hedge our bets on the athletes we love, and consider it a different type of investment in history. I’m interested in your thoughts.
For more on this topic, here are links to sourced material: