Bull Case Bear Case: 1993 SkyBox The Simpsons Art DeBart Signed Sketches
April 19, 2022
Welcome to the latest edition of Bull Case Bear Case. As always, the goal is to give investors a clear, balanced view of both sides of the coin. Prepare to tackle the week with confidence!
1993 SkyBox The Simpsons Art DeBart Signed Sketches
4/19 @ 12:00 PM ET
The intersection of cards and culture. One trend that has become increasingly common over the last six months is the continued crossover of art and sports. The Project70 series launched by Topps is just one of the multitude of sets that combine artist prints with sports cards. SkyBox cards were one of the more forgotten inserts of the 1990s, with limited appreciation over the years and no standout card from the series. The 1993 SkyBox Simpsons base set stands out with a limited print run of 400 Art DeBart cards featuring original artwork from the long-time television series creator, Matt Groening. In an era marred by overproduction and junk wax, there is a limited number of cards from the early '90s worth investing in, but the Art DeBart series has solidified itself as one of the most sought after. This bullish case revolves around the continued affinity within the hobby for cards that are 'outside the box' (no SkyBox pun intended). Cards that meet at the intersection of art, history, or culture, continue to carve out their own corner within the universe of collecting. The growth of new projects such as zerocool provide a boost to the thesis as collectors and investors alike continue to flow capital towards cards that stretch beyond the standard sports card.
The influence and legacy of The Simpsons. With 33 completed seasons and more than 720 episodes, The Simpsons are the longest-running American animated series and the longest-running scripted American primetime show. To further emphasize the longevity of the show, The Simpsons have been on television for more than a decade longer than the second-longest running series, Law & Order: Special Victims Unit. Even in its 32nd season, The Simpsons were still averaging more than 2 million viewers per episode and the show has won. 34 Emmy Awards in addition to a star on the Hollywood Walk of Fame. Time Magazine included The Simpsons on its list of the "100 Best TV Shows of All Time" and famed TV critic Ken Tucker from Entertainment Weekly once cited the series as the greatest television show of the 1990s. While their viewership has declined, The Simpsons have maintained relevance with the conspiracy theories that surround the show's knack for making accurate futuristic predictions. From the election of President Donald Trump to the merger of Fox and Walt Disney, social media and traditional outlets are always quick to cite scenes from early Simpsons that came to fruition, even if the comparison is a questionable stretch.
Limited print run combined with gem mint quality. With a print run of only 400 examples, the Art DeBart series not only delivers a unique opportunity but also provides a level of scarcity that is difficult to find from any early 1990s set. There have only been two public auction sales to date for PSA 10 graded examples and the purchase of these cards was the first time either of these exact examples sold at auction. Additionally, there is some potential history with the offering as the Art DeBart series is believed to be the first sketch cards ever produced and they are without question the first of their kind that were incorporated in a traditional card set. The early 1990s are a void within the hobby as more than 1 billion cards were printed for individual 1990-1994 annual sets and with the exception of the 1993 SP Foil Derek Jeter rookie, there is a limited number of cards that are attractive investment pieces. With a limited print run and distinct angle, the Art DeBart series provides an offering that is not replicated in any other set from the early days of the '90s.
Declining popularity. Although The Simpsons still managed to attract an average of 2.3 million viewers in 2020, their viewership has declined consistently over the last 20 years. At the turn of the century, The Simpsons were averaging more than 15 million viewers per episode and kept their numbers in the eight figures until the 2005-06 season. The continued rise in cord-cutting combined with a steep decline in sitcom popularity has resulted in a rapid decline in the shows ratings and advertising revenue. The drop in attention has also resulted in a drop in salaries for the voice actors, which were cut by 30% in 2020 after Fox threatened to cancel the show unless production costs were slashed significantly. At this point, each year seems to deliver a new record low tally for ratings and the show is clearly not catching on well with younger generations. While the show maintains a level of relevancy with their "predictions", the occasional trending status on social media has not converted members of Gen Z into active viewers.
Setting the ceiling. Bart and Homer were both purchased via Heritage Auction on February 27th for $17,400 each. The sale was the highest for any cards from the series to date and marked the first time the Art DeBart set recorded a sale above $16,000. This Rally IPO now marks the first time any sketch from the Art DeBart set has been valued above $20,000 and the IPO market cap is 20.7% higher than the record price paid for each of the offerings. The sourcing fee for the offering was 10.9% which falls within a standard range for Rally IPOs although the effect of additional fees such as offering expenses and marketing materials is more impactful with a drop that has a lower market cap than usual. The sale price at Heritage in November for PSA 10 graded Bart and Homer sketches was $15,600 each, which does mean the cards appreciated 11.5% in just over three months. That being said, the IPO market cap of $21,000 less than three months after the asset was purchased for $17,400 outpaces the 11.5% quarterly return displayed by this set between November and February.
The undefined Art DeBart market. It is fair to question whether or not there is even a market for the Art DeBart set. Performance data is limited with only two public auction sales and these are e the first offerings from the set on Rally so there is no secondary market history. With a market cap that is a 20% premium to the highest sale price combined with a show that has a declining popularity, it is valid to have concerns about the growth prospects of the sketches. There is also not a defined market for this IPO to fit into. If it is considered art, the two sketches would be the first art to IPO on Rally. If the offering is viewed more as a traditional trading card by investors, that might spell trouble once the offering hits Rally's secondary market. There are currently 15 card games trading on Rally and the average return is -40.09%. Assets from the 1990s have also struggled on Rally, as the average return from that decade is -15.36% across 58 total traded assets. For comparison, the average return for pre-1990 assets is 11.91% and the average for post-1999 offerings is -2.01%.
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