Thomas H. Ruggie, ChFC®, CFP®, Founder & CEO, Destiny Family Office.
On October 1, 1932, in Game 3 of the World Series between the New York Yankees and the Chicago Cubs, Babe Ruth stepped up to the plate at Wrigley Field in Chicago. He pointed toward the other team and then hit the next pitch for a home run into center field, leading the Yankees to victory in the game and eventually the series.
Whether or not Ruth was actually predicting the swing—historians are still debating—the “called shot” is one of the most legendary moments in baseball history. That’s why the jersey he wore that day, authenticated through advanced photo-matching techniques, recently sold at auction for $24 million, more than double the previous record for a sports collectible sold at auction of $12.6 million for a 1952 Mickey Mantle card.
The landmark sale reflects the increasing cultural and financial importance of sports memorabilia as an asset class. High-profile sales like this attract high-net-worth (HNW) collectors and institutional investors, cementing sports memorabilia as a serious investment opportunity. It also underscores a broader trend of collectibles becoming recognized as more than just personal treasures for enthusiasts.
Is It Authentic?
Nobody wants to pay millions of dollars for anything without being sure it’s the real thing. The authentication of sports memorabilia has become increasingly sophisticated as values have soared. In the case of Ruth’s jersey, a company called MeiGray was one of the companies that authenticated the shirt by comparing it to Getty images from the 1932 game. The meticulous photo-matching examination included details like specific stains and the places where pinstripes intersected with letters on the jersey. They eventually identified over 40 points of similarity in a process similar to fingerprint analysis. Rigorous techniques like these have significantly elevated confidence in high-value items.
The Memorabilia Market
The record-breaking sale has sparked increased attention to both the hobby and investment aspects of sports memorabilia. It’s driving interest across various price points, from $10,000 items to multi-million dollar pieces, and this surge in interest is having a positive impact on auction houses and private sales.
Enthusiastic investors are looking at items like Ruth’s jersey in two ways: as things they’re passionate about because of their history, but also as investments they believe will rise in value. Collecting and investing are converging, not just for sports memorabilia but also for items from pop culture, music history and even handbags and jewelry. For example, the acoustic guitar Kurt Cobain played for Nirvana’s 1993 appearance on MTV Unplugged sold for $6 million in 2020.
Concerns For Investors
Despite the memorabilia market growth, investors face several challenges, starting with the complexity of pricing one-of-a-kind items like Ruth’s jersey or Cobain’s guitar. Market volatility and liquidity are also a concern with unique pieces. Even “blue chip” sports collectibles associated with all-time legends like Ruth or Michael Jordan, which have proven to be good investments over the long term, can lose value in the short term and be difficult to resell quickly. The risk is even higher in the case of speculative purchases like rookie cards of unproven athletes. Proper storage and documentation of provenance are also critical, especially with antique objects.
Investors should understand the risk-return profile, distinguishing between established high-end items and more speculative modern pieces. It’s important to balance personal passion and investment potential and be prepared for potential fluctuations in value, especially in the near term.
Then there is the question of cultural significance. The sale of historical items sparks debate over private ownership versus public display. This is an important consideration, and the answer lies somewhere in between. Many high-end collectors address this by loaning items to museums or hosting public displays; the new owner of Cobain’s guitar said he planned to take it “on a worldwide tour, with proceeds to go to supporting the performing arts.”
Whether or not Ruth truly called his shot, sports memorabilia collectors and investors alike will increasingly find themselves at the intersection of history and high-stakes opportunity.
Forbes Finance Council is an invitation-only organization for executives in successful accounting, financial planning and wealth management firms. Do I qualify?
Read the full article here
