Bull Case Bear Case: Haaland Rookie, Kobe Sneakers, NBA Lithograph
March 8, 2022
Dylan Dittrich, Bradley Calleja
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. Don't forget to upgrade to Pro (and receive a free seven day trial) for a look at great analysis on even more offerings.
1978 Kenner Star Wars Luke Skywalker Action Figure (AFA 85)
Generational talent. Simply put, Erling Haaland is a footballing terminator sent back in time to do one thing: score goals. Standing at 6’4 and frequently ranking amongst the fastest players in the Bundesliga (he has been clocked at 22.4 mph in game), his combination of physical stature and athletic ability is unmatched. At the age of just 21 years old, Haaland has scored 20 Champions League goals (in 24 matches), leading the competition in 2020-21. This season, he has 16 goals in 14 Bundesliga matches. In all competitions professionally, he has notched 119 goals in 141 appearances, and he is actually scoring at a rate of 1.09 goals per 90 minutes. If you’re not a massive follower of soccer, rest assured, these numbers are absolutely absurd. Haaland is frequently coupled with Kylian Mbappe in discussions of who will lead the next generation of superstars as Messi and Ronaldo fade from their peaks.
Big move on the horizon. It’s widely expected that this summer will see Haaland make a move to a larger club. He has sharpened his trade for the last two and a half seasons at Borussia Dortmund, considered the second largest club in Germany’s Bundesliga behind Bayern Munich. Though the quality of football in the Bundesliga is strong, it is not considered to be among the most globally watched leagues in the world. So, whether Haaland moves to Real Madrid, Barcelona, or Manchester City - Spanish La Liga or English Premier League - he will be stepping into a much larger spotlight featuring significantly more global viewership. For reference, El Classico, contested between Barcelona and Real Madrid, is estimated to draw 75-100 million viewers worldwide.
Headline-making cards. Back in June, a Haaland card garnered headlines when his 1/1 Superfractor from this set sold for $432,000. In effect, this helped to solidify the increasingly strong perception of the Topps Chrome Bundesliga card as his key, coveted rookie. This was a more complicated choice than most, as other options include his 2019 Panini Fussball Sticker from his time at RB Salzburg, his 2019 Topps Finest Champions League card, also from Salzburg, and his 2019 Topps Chrome Champions League card at Dortmund. For example, a PSA 10 Base card from the Topps Chrome Bundesliga set carries a population of 974 and most recently sold for $999.99. The Panini Fussball sticker, despite having a population roughly a third the size and being chronologically earlier, last sold for $1672 (keep in mind the total population of Haaland cards, even PSA 10s, in the Topps Chrome set is much larger). The Gold Refractor has a print run of 50, with 11 currently attaining the PSA 10 designation. Haaland cards have seen seven six figure sales at Goldin. That’s three more than Mbappe and Messi combined, and just one less than Cristiano Ronaldo.
Big move poses risk. While the potential of a move to a globally iconic club presents a potential tailwind, the move also poses significant risk. What we know at present is that Haaland at Dortmund is a goalscoring force on par with the very best in the world. But many careers have stalled, been challenged, or sputtered following a big money, high pressure transfer to a club with significant expectations. For example, Jadon Sancho has encountered early struggles following his transfer from Dortmund to Manchester United for over $100 million, which is weighing on his card values; his 2018 Topps Chrome Refractor is down from a peak of $2,900 to just over $400. Even more established players, like Eden Hazard who moved from Chelsea to Real Madrid, have seen their performances plummet under the microscope that comes with hefty transfer fees.
Softening market. The last public sale of this card came in August at Goldin for $46,800, down 31% from its March 2021 peak. More common Haaland cards (base and refractor) are down anywhere from 20-40% since August. While the pain would not likely be as pronounced for a card numbered to 50, which appears much more infrequently, a bearish investor might be more comfortable had the offering been priced closer to Rally’s acquisition price ($36,533). The sourcing fee is $6,917, which is 15.37% of the offering value, bringing the valuation nearly in line with the most recent sale. This month’s PWCC Premier Auction, closing March 19th, will provide several key data points. Haaland’s Orange Refractor, numbered to 25, will sell for the first time since one sold for $73,200, in the same auction that the Gold Refractor sold for $46,800. A BGS 9.5 Gold Refractor will also sell.
No World Cup catalyst as modern gold rush slows. Norway failed to qualify for the World Cup, meaning that Haaland will not be a part of an event widely expected to serve as a catalyst for the soccer card market next winter. With his key cards sitting at the forefront of a modern soccer land grab in 2021, the lack of that catalyst perhaps hurts him more than it would other players. Notably, Haaland’s oft-mentioned generational equal, Kylian Mbappe, will appear in the World Cup for a strong France squad. He recently saw his PSA 9 Champions League Topps Chrome Gold Refractor rookie sell for $28,800 at Goldin, down considerably from the $34,440 paid for a PSA 9 in June. That card carries a PSA 10 population of just 9. His PSA 10 Orange Refractor, numbered to 25 rather than 50, sold for $46,200 at the same auction, in line with the valuation here.
Unique assembly of greatness. There have been over 90 pieces of sports memorabilia offered by fractional investing platforms, but this marks the first ever lithograph IPO. On October 29, 1996, NBA Commissioner David Stern announced the 50 greatest players in NBA history. The list was compiled by a panel of media, former players and coaches, and front office executives. The list included names like Michael Jordan, Kareem Abdul-Jabbar, Shaquille O’Neal, and Larry Bird. The document here includes signatures from 49 of the 50 basketball icons and the only one missing is Pete Maravich, who passed away before the lithographs were created. When these lithographs were distributed, the players highlighted had combined for 107 NBA Championships, 49 league MVPs, 447 All Star games, 36 scoring titles, and nearly 1 million points.
Limited print. There are only 250 of these NBA ‘Greatest 50’ lithographs in existence and this example is one of only 50 produced specifically for the players. Dave Bing was a seven-time All Star and won league MVP in 1976. He finished his career with over 18,300 points and was voted to the NBA 50 Greatest list. Collectable’s IPO is Bing’s lithograph which is confirmed with a “Bing 1/1” notation in the lower left corner. It is incredibly difficult to find such a significant array of signatures, but this is more than just a canvas of profile images and John Hancock’s. This lithograph is a limited-edition piece of NBA history, created and curated by the league itself. Lithographs on their own are incredibly rare and typically, are not too valuable either, even if they contain a few signatures of legendary sports stars. This offering is not a typical lithograph though and instead is arguably the most famous and recognized example in the sector.
Can a lithograph be an asset? In the last three years there have only been six public sales of player-edition NBA Greatest 50 Lithographs. Not only is secondary market data extremely limited, this marks the first fractional lithograph IPO. Although sports memorabilia has outperformed sports cards on Collectable over the last six months, the sector has lagged overall and trails cardboard by about 1% on average. The majority of memorabilia currently trading on Collectable is game worn and game used, so how will investors respond to an offering that has never been viewed as an asset before? It is not that new asset classes have not emerged over the last year; from photographs to tickets there are plenty of examples of new sports-related investments on the market today. The difference is that this lithograph is completely on its own. There have been less than 10 sales of relevant comps in the last five years and the majority of lithographs are not worth five figures, let alone six figures. There is no question that the NBA 50 Greatest Player Edition is on a different level compared to most examples. The question is whether or not the fractional market will be receptive to a lithograph as an asset.
Top sales come from top names. The last six lithograph sales have struck prices between $37,200 - $102,000 and there is a significant disparity in values depending on who the lithograph belonged to. For example, the only two sales that have ever exceeded $51,000 were examples once owned by Kareem Abdul-Jabbar and Bill Russell. The other four sales have all come from the collections of lesser-known stars and only one hammer price surpassed $50,000. The Russell sale is the largest to date and struck a price of $85,000 (before BP) less than two months ago. In 2019, there were four different sales for player edition lithographs between August and December. The Kareem lithograph sold for $90,880 while the other three sold for less than $51,000 each. While it is great that lithographs from names like Kareem and Russell strike near-six figure prices, there has not been any evidence to date that a lithograph from a lesser known legend such as Dave Bing would also reach a similar valuation. The best bullish case for this example from Bing would be the 2016 sale for a Jerry Lucas 1/1 lithograph which sold for $78,870. That sale has not been replicated since though and the closest comps to Bing’s copy have all settled near or under $50,000 over the last three years.
2016 Kobe Bryant Game Worn & Photomatched “Black History Month” Sneakers
3/11 @ 2:30PM ET (Previously Early Access)
Sneaker legacy second only to Jordan. Kobe’s sneaker legacy has only strengthened in recent years since his retirement and his passing. His signature sneakers remain among the most worn by currently active players in the NBA, who have long appreciated both the style and feel on court. More than 100 players wore the Kobe 4 Protro during the 2019-20 season, when the sneaker was re-released. Per ESPN, nearly one-third of the players in the bubble wore a Kobe signature sneaker in 2020. However, upon the expiry of Bryant’s contract with Nike, production of the sneakers has halted, and NBA players are increasingly either hoarding them or desperately searching for more. The model here, the XI Elite Low, was the last model Kobe wore as a player, featuring prominently during his final season. The XI typically ranks in the middle of the pack amongst Kobe signatures, albeit behind beloved models like the Kobe 4, 5, and 6. Retail releases of this model from 2016 now commonly sell for several multiples of their retail price on StockX. Just earlier this month, Goldin sold a signed & inscribed but not worn pair of the Bruce Lee colorway for nearly $10k. The colorway here is a special celebration of Black History Month - and the resale price has steadily climbed, though not to the heights of other Kobes and XI Elite Lows.
Strong Kobe & sneaker data points to close 2021. There has been evidence of growing demand for game-worn sneakers in recent months. While the $1.472mm sale of Michael Jordan’s Air Ships at Sotheby’s in late 2021 was a catalyst, most relevant here are two six figure sales of rookie-worn, non photo-matched Kobe Bryant sneakers at Heritage in December (for $192k and $156k respectively). Those sales destroyed previous marks for similar sales, which hovered around $25k as recently as May, and reset expectations for sneaker strength going into 2022. Two sneaker buyouts - $203k for LeBron’s High School worn Kobe’s and $110k for Stephen Curry’s Photo-matched Nikes, provided further evidence of concrete and growing interest in the category, though it bears noting that these both came from the same buyer. Still, to see Kobe sneakers drawing six figure sums provides some encouragement that his memorabilia and sneakers in particular are becoming increasingly coveted. A bull would need to fervently believe that those December Heritage sales reset the Kobe sneaker market higher, breaking game-worn Kobes out of their low-to-mid tens of thousands range.
Challenged secondary market performance. This will be the fifth pair of Kobe Bryant game-worn sneakers that Collectable has offered. The other four have begun trading, and the average ROI as of 3/4 is -15.7%. All four have negative double digit returns, and the best performing asset is down 10.5%. Fractional investors have, in large part, asserted with trading activity that the IPO values for these assets have been too high. Whether you feel the valuation is appropriate or not, a bearish investor would argue that the trend indicates a better entry point will become available once the asset trades.
Lower desirability versus other pairs. You’ll quickly notice that one thing is missing from this offering: a signature or inscription. It’s actually quite a rarity to find an auction listing for a pair of game-worn sneakers without some form of insignia from the Mamba. A bearish investor would assert that is not a good kind of rarity. The other pair of this particular colorway to surface at auction, photo-matched to a game the same month against the Pacers, is both signed and inscribed. Those sold at SCP in August of 2016 for $8.3k. At the time, they were not photo-matched, but they came directly from Panini, which certified their use in that game. In May of 2020, the same pair, now photo-matched by MeiGray, sold at Goldin for $25,000. That’s a 34% annual growth rate, setting aside the impact of the photo-match, which would likely be muted given the provenance was fairly ironclad already. So, not only do you have to believe that pair has increased in value by 188%, or 83% annually, in the last almost two years to meet the $72,000 valuation here, you actually need to believe it’s increased by more to account for the fact these feature no auto.
Track record of game-worn sneaker strength is short. Prior to the momentum seen at the end of 2021, the track record of game worn sneaker strength outside of Michael Jordan was fairly limited. Kobe’s rookie sneakers - similar to the pairs that garnered six figures at Heritage - had sales of $24,000 and $26,400 at Goldin in May 2021 and December 2020 respectively, not to mention $10,367 at Grey Flannel in June. Really, it’s in that low-to-mid ten thousands range that game worn sales have typically clustered in recent years. Between Goldin, Heritage, SCP, and Grey Flannel, only approximately 20 sneakers have ever sold above the valuation here. Sales to start 2022 have not soared, with $31k being the high mark for a dual signed, game-worn (but not photo-matched) 2006 pair of Nike Kobe 1s at Goldin. This is more in line with other game worn pairs that have sold in recent years, though perhaps a bit stronger given the lack of photo-match. The only Kobe sneaker to clear $50k other than the two rookie sales at Heritage was a pair photo-matched to the 2001 Finals clinching game. Those sold for $70,000 at Goldin in 2020, shortly after Kobe’s passing. 2022 is not off to a good start: in Heritage's Platinum Winter Night auction, a signed pair of Kobe's Huarache 2K4s, photo-matched to two 2004 Western Conference Semifinals games, went unsold with a reserve of $46,000 and an estimate of $50,000+. That does not bode well for sustained momentum in Kobe sneakers, and if those did not sell at $46k, it's difficult to wrap one's head around these unsigned sneakers from less significant games at a $72,000 valuation.
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