Just released: Our latest Sports Collectibles Market Report!
Photo: Heritage Auctions
On Saturday night, Heritage Auctions sold a WBC Heavyweight Champion belt, earned by Muhammad Ali for his triumph over George Foreman in the “Rumble in the Jungle”, for $6,180,000. The result blew away the $1 million+ estimate provided by Heritage, as spirited bidding drove the price to record heights. We now know that the belt will join the Irsay Collection, a touring, museum-quality collection of culturally-relevant American artifacts.
With such a strong result comes a flurry of questions to better understand the piece’s provenance, scarcity, and comparables. And in the case of the Ali belt, the answer to each question raises more. Let’s ask and answer them to get you up to speed.
So this belt was given to Ali immediately after he dropped Foreman?
No, this belt was actually awarded in 1976 (the fight was in 1974), retroactively recognizing the victory.
It wasn’t in the building at all that night in Zaire?
It was not. Neither of the WBC belts were. WBC didn’t begin awarding belts until 1976.
Wait, neither?! There’s more than one?
Yes. It seems there are two WBC belts that were awarded to Ali. One of the belts was sold at Heritage on Saturday. The other trades on Collectable.
Where did each of the belts come from? What’s the provenance?
The Heritage belt originally came from the collection of Drew “Bundini” Brown, Ali’s cornerman. Brown meticulously collected key artifacts from Ali’s career, keeping them in a storage locker within a storage unit. When Brown passed away in the late 1980s, rent on the unit became delinquent, and the contents were sold. This belt sold at Heritage previously in 2016 for $358,000 and at Lelands in 2017 for $120,000.
The belt on Collectable had 70% of the equity retained at IPO by Sports Immortals, which consigned the asset. That belt was obtained directly from Cassius Clay Sr. by Sports Immortals founder Joel Platt, creating strong, direct-from-family provenance.
Has any conclusive photomatching been done on either belt?
It has not. The Heritage listing includes a fairly low-resolution image of Ali wearing the belt after a defense in May 1976. However, many have begun to evaluate that image against the two belts in question.
What is the market cap of the Collectable belt?
Before trading began on Monday, the market cap sat just below $300k, at $299,600. That’s down 30% from the IPO value of $428,000, despite a 22.8% one-month gain. Per the latest filing which notes 10%+ owners of Collectable assets as of May 2nd, one individual owned 17%. Sports Immortals' retained equity is not reflected on the table in the filing, but this may be the result of ownership structure not necessitating it. As the all-time volume for the asset is under $60k, we do not see it as likely that Sports Immortals has divested. If indeed they still retain 70%, that means ~87% of the asset is owned by two parties.
The market cap quickly surpassed $1 million in early trading Monday, and at the time of publication, sits at $1,498,000.
Is the Collectable belt worth $6.18 million now?
No, not necessarily - or maybe - but this is what makes valuing memorabilia so tricky. First of all, every item is truly unique, boasting its own provenance, condition, details, and authentication. One might conclude that the Collectable belt is in superior condition to the Heritage belt (or vice versa), or that the Collectable belt is more likely the one in the picture, or more concretely, that the father provenance is preferred to the “Bundini” storage locker. If (this is hypothetical) those were the conclusions, shouldn’t this belt be worth more than the Heritage belt?
One would think, but this is where things get challenging. The Heritage belt rose to the $6.18 million price on the back of a spirited bidding war lasting hours between just two bidders. One of those bidders, Jim Irsay, won the belt, and the already very small buying pool willing to pay that amount shrunk by one. The question then becomes: at what level did other motivated bidders (if they were in the mix) drop from the bidding? If there isn’t significant competition to again challenge the $6 million mark, prospective buyers may not be motivated or required to pay that level, particularly in an auction setting. At any given auction, all it takes is two motivated bidders to propel a special item to unimagined heights. But does that mean the value of the item is truly the auction result? Does it reset the market to that level?
On the flip side, such a landmark sale might have the power to attract new buyers into the market for such a special artifact. It’s that increase in demand that could serve to reinforce the auction result as an ongoing measure of the market.
There are examples of follow-on results going in both directions, but in most cases, the landmark result does reset the market to a higher level than prior to the sale - it’s just a question of magnitude.
With such a significant portion of the Collectable asset retained by Sports Immortals, though, lowball offers are unlikely to succeed. One might even expect that offers on par but not better than the auction result could flounder. There is, of course, risk to either decision: accepting and leaving money on the table or rejecting in anticipation of appreciation from an already astronomical level that may never come.
So, how exactly would an appraiser use the $6,180,000 data point from Heritage in evaluating the belt on Collectable?
Luckily, we have a registered appraiser in house. Let’s go to Bradley for some insight..
As with any appraisal, the value will vary - in this case greatly - depending on the purpose of the valuation. For an insurance appraisal, the value provided by an appraiser would emphasize the $6.2 million Heritage sale. The purpose of an insurance appraisal is simple - to mitigate and cover potential risk with a defendable valuation. Since there is now a defendable price point of $6.2 million, an insurance appraisal would be expected to cover up to that amount. There could be further examination required to determine just how comparable the two belts are, but based on the authentication and research already completed, there is no present reason why an insurance appraisal would not match the last sale.
If the appraisal is for donation or general fair market value purposes, price discovery gets more intricate and involves additional judgement. In this case, the appraiser would need to review any relevant and recent sales of Ali awards and memorabilia, and then curate an estimate based on that data while ruling on just how much weight to place on the Heritage result. This process involves determining the likelihood of the belt reaching the record price again and a thorough review of the overall market beyond that single sale. In any situation, the record-breaking sale of the Ali belt is going to influence the fair market value of any comparable memorabilia. While all pieces might not move step-for-step, there is no question the result will positively impact a third-party valuation of Collectable’s belt from an appraiser's perspective (not investment advice). At this time, it would be reasonable to assign an auction estimate of at least $2 million, but while the belt sale is what will attract the majority of the headlines, an appraiser would also incorporate the other high-end Ali memorabilia sold at the event. Many of those items actually sold well below their pre-auction estimates which would likely influence the appraisers view of the broader Ali market. One factor supporting a high appraisal for Collectable’s belt would be the historic strength of the Ali memorabilia market. It could be argued that only Babe Ruth has a more impressive high-end sales history, and there have now been multiple Ali items sold for seven-figures, representing additional buyer confidence in the legendary boxer.
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