Recently, wealthy investors have begun to pay attention to a chic field of collecting. Steve Cohen and Dan Sundheim are both known for owning blue-chip art, and now they're investing heavily in sports collecting.
Many people in the art world are also trying to catch up with this craze.
The United States is the founding country of the star card, the earliest as a gift of cigarette boxes, after the response of various manufacturers to imitate, gradually evolved into a distinctive collection category.
▲ The 1909 Honus Wagner baseball card, a card in an early cigarette pack, is considered the ancestor of the baseball card
Art consultant Anita Heriot has given her peers a crash course on the topic, giving them an idea of some of the top clients' portfolios. One of the collectors mentioned in the collection includes works by Mark Rothko and Andy Warhol, but the most valuable and fastest-appreciating asset is a collection of star cards.
▲ The most expensive basketball star card "Alphabet Brother" national treasure one series RPA
This is unfamiliar territory to this group of art consultants. "What is a Star Card?" Heriot says her colleagues are not aware of such collections.
▲ In 2016, Christie's New York auctioned the signature baseball of American professional baseball player Babe Ruth
According to gold auctions, an auction house that specializes in auctioning sports collectibles, the popularity of sneakers, jerseys, bats and pocket trophies of legendary athletes and contemporary sports stars has soared rapidly, with transactions in this area rapidly expanding from $1 billion to $10 billion.
▲ Left: $1.8 million James rookie card; Right: Sell $3.94 million of "most expensive star cards" - Mike Trout's rookie folding
Driven by wealthy millennials and deepening digital trends, the prices of star cards in baseball, basketball, hockey, and ice hockey have been almost as high as the works of Alexander Calder and George Condor. For actor Rob Gough, spending $5.2 million on a 1952 Mickey Manto rookie card was like getting the Mona Lisa.
"Money depreciates, so people fight inflation by buying assets that hold their value," says Chris Ivy, head of sports auctions at Heritage Auctions. The auction house sold more than $100 million in sports collectibles in 2020.
Once a popular hobby for a small number of people, the star card is now considered an asset class. "People in their 40s and 50s have disposable income and come to invest in these cards," Ivy said, "and when THE CORONAVIRUS was raging, they were bored and stuck at home." ”
Comparison of total sports collection auction turnover between Goldin Auctions and Heritage Auctions between January 2019 and January 2021 (Goldin Auctions in blue and Heritage Auctions in orange)
The reason why these people are now willing to spend thousands of dollars to buy star cards is mostly due to emotional factors and investment considerations. "They make me feel like I'm back in my youth," explains Ralph DeLuca, a collector of star cards, antique movie posters and contemporary art, "in fact, what gives us fun is also a good investment tool — if you handle it properly." So [collecting star cards] is very interesting for people. ”
As demand in the space continues to grow, some investors, such as Cohen Private Ventures, D1 Capital Partners, and Blackstone (whose CEO, Sir Schwarzman, is also a key art collector and museum patron) are investing in companies that manufacture, sell, and evaluate such collections.
Simon Lipman, a veteran pop culture expert, said: "This just shows how strong the market is. A lot of predators come into this space because they see an opportunity. ”
Last week alone, two major investments were released.
Collectors Holdings, a company co-founded by Cohen, Sandheim and entrepreneur Nat Turner, is said to have bought Goldin Auctions for around $200 million. Blackstone is also in the process of acquiring The Reinforced Collegibles Group, which is engaged in the identification and grading of items for sale, with an estimated $500 million acquisition.
There's another reason some big collectors come to this space — some of them are still team owners. Cohen, who once spent $2.4 billion to buy the MLB New York Mets, has been publicly saying he wants to collect souvenirs.
Sandheim also bought a small stake in the NBA's Charlotte Hornets from Michael Jordan in 2019.
Elizabeth von Habsburg, executive director of Winston Art Group, said: "You can see the intersection between sports collectibles, watches and the field of contemporary art. She added that traders in this space include musicians, sports insiders and "contemporary art collectors you often see, especially those who make money in the cryptocurrency space or the tech industry."
Auction houses are also working to facilitate this crossover. Last November, Goldin Auctions and Sotheby's jointly hosted an auction called A Century of Champions, with 74 lots, ranging from sneakers to rookie cards. The results were mixed: While the auction totaled $3 million and 67 percent of bidders were new Sotheby's customers, more than a quarter of the lots failed to find a buyer.
"Our customers prefer to deal with our platform." Goldin Auctions founder Ken Goldin said this week. Sports are more attractive than art, and so are sports collectibles.
Regarding this phenomenon, DeLuca said: "The criterion for judging art is very subjective. Let's say you have an Andy Warhol piece that may not perform well because the size, color, or series don't match the preferences of the current market. "But it's much easier to judge the value of star cards and other sports collectibles." That's why people who speculate in stocks, people in the cryptocurrency space, and people in the hedge fund space love star cards," Goldin said.
The price of a star card depends heavily on its rating, which is determined by some rating and certification companies. Earlier this year, Collectors Holdings acquired PSA, a well-known rating firm, for $853 million. These agencies grade sports collectibles and pack them into hard plastic shells that can't be opened. While there may be many versions of the star card for the same player, only a few can achieve record prices.
DeLuca said: "Once a star card is rated, it becomes a commodity that can be traded like a stock. ”
▲ Ty Cobb baseball card in 1910
As an online commodity trading market, Ebay sold 18 million star cards in the first quarter of this year, generating more than $1 billion in revenue — equivalent to about 130 transactions per minute, an increase of 345% over the same period in 2020.
However, this surge in demand could overwhelm the entire system. Ivy said that at Heritage Auctions, the waiting time for unrated star cards is about 6 months to 1 year. PSA has also amassed about 1 million unrated star cards, forcing the company to suspend ratings on low-priced products, and the company's president, Steve Sloan, said in a letter to customers in March: "We have received more star cards in the last three days than in the previous three months." ”
Sloan said some services have gradually recovered this month, but service offers have been higher to meet management needs.
As a sign of further commercialization, some star card collectors are trying to monetize their collections. A handful of collectors have approached art finance firm TPC Art Finance over the past year, but to date, no star card has been worth more than the company's $500,000 minimum loan amount. Joe Charalambous, president of the company, said: "If the collection is valuable enough, we will also consider this issue. ”
But not everyone is planning to join. Amy Cappellazzo, president of Sotheby's Fine Arts Department, considers collecting "a big world" and is planning a new artistic venture after she officially left Sotheby's this month. "Dan and Steve are particularly interested in this big world," she said, "(for their investment) I have nothing to add, but I'm going to stick with my own course." ”