Collectibles scoff at your recession fears.

The Collectible Market’s Head Start

It seems the definition of “recession” is no longer as clear as it once was, and while market observers deploy various indicators to determine whether or not we’re actually in one, consensus eludes them with frustrating regularity. But when one lackluster employment report can act as the domino that tumbles global financial markets into panic, it’s clear the state of the economy is tenuous. That’s an oversimplification, but our humble collectibles newsletter won’t unpack the mechanics of the unwinding carry trade in Japanese Yen.

Though stocks have bounced back quickly, the point is: broad financial markets were forced to reckon with the potential economic fallout that lurks on the other side of a higher rate era. But shouldn’t that have happened long ago?

Been there, done that. Like the grizzled veteran in a movie that stands up from the bar and ambles over to warn the fresh-faced newcomers of the horrors to come, the collectibles market is wondering what took everyone so long to realize the precarious nature of the situation.

Earlier in the cycle, we quipped that Jerome Powell simply could not declare victory over inflation in a world where Justin Herbert cards were still selling for $1 million. Jay, he hasn’t even won a playoff game! Why isn’t this in the Fed minutes?! Perhaps, though, had he been following sports cards - or most collectible categories - over the last 18 months, he might not be facing a groundswell of angry suggestions that the Federal Reserve has been too slow to cut rates.

Why? Because collectibles have already endured a recession, with precious little help from Jay and the gang.

This time is different. Cards, art, wine - all have suffered as one might expect them to during a broader economic downturn. Only….we haven’t experienced a broader economic recession (depending on who you ask), and equity markets, buoyed by strong performance from their largest constituents, have remained resolute in their march higher until recently.

That’s what makes this time different.

Historically, recessions have weighed mightily on the art market, even if it responded on a lag to equity markets, which more quickly price in weakening economic conditions. This time, if a recession were to arrive, it would find collectible markets that have already reset or are undergoing resets in progress. And those resets could be nearing completion just as the Fed prepares to cut rates, creating a more hospitable and liquid monetary environment.

What does history tell us? The art market - used as a proxy for collectibles broadly - has rarely escaped an economic recession without tumult of its own. The recessions of the early 1980s, early 1990s, dot-com bubble, and the Great Recession all brought double-digit annual losses for the Masterworks All Art Index. Meanwhile, the start of a rate-cutting regime has produced mixed results in art historically, though many of the weaker periods corresponded with recessions or the aftermath thereof.

But this time, the damage is already done. Auction volumes and values are down markedly since 2022, as collectors - including those minted in the early 2020s - retreated in the face of growing economic uncertainty and higher interest rates (which also presented attractive, traditional places to park capital). That being the case, could we expect a swifter return to prosperity in a rate-cutting regime with additional liquidity?

Rate-cutting cycles have historically driven healthy positive returns in both equities and fixed income, while also driving increased consumer spending either during the cycle or immediately after its completion. The positive contribution of those factors to psychology, as well as the markedly reduced entry prices relative to 18-24 months ago, should - at least in theory - produce a favorable backdrop for collectibles.

The bottom-line. But if the past few years have taught us anything about collectibles, it’s to expect the unexpected and be prepared for activity that eschews logic. That’s probably a sound strategy for navigating life in 2024.

Serving Records

On August 4th, a new record was set.

Less than 24 hours later, that record was broken.

In the words of Matthew Cashin, founder of The Tennis Auction, “It was an awesome weekend for tennis memorabilia. I don’t know of any instance where that’s happened before.”

Tennis rarely grabs the spotlight in the world of collectibles, but over the weekend, the sport struck gold.

In June 2023, Julien’s sold a shirt accompanied by a letter of authenticity from MEARS. The Nike-branded shirt was attributed to Rafael Nadal’s 2010 US Open Final where he had defeated Novak Djokovic in four sets. The win gave Nadal a career Grand Slam and came from the heart of what is now recognized as his most dominant era.

If Michael Jordan jerseys from iconic moments routinely sell for seven figures and the “Tiger Slam” clubs achieved $5 million, what would a shirt Nadal wore in one of his most memorable matches sell for?

$5,850.

That’s not a typo, and no, it’s not missing any zeroes.

It was also nearly triple the pre-sale estimate.

Even if the presence of a MEARS letter without any additional photomatch gives you pause, just last week a National Treasures Jalen Johnson RPA sold for $5,800 on eBay. With all due respect to Mr. Johnson, and we apologize to him in advance for catching this stray, if a Jalen Johnson card is selling for the same price as a match-worn Nadal shirt, this industry makes no sense.

Fast-forward one year later and SCP Auctions had a shirt from that same U.S. Open Final up for auction but this time, the shirt carries full authentication paperwork with photo analysis from Sports Investors. If you’re new to the tennis market, it’s common for players to wear multiple shirts throughout a match, and in Nadal’s case, he’s been known to sweat through four or more in the late summer New York heat. In their lot description, SCP provided evidence of additional provenance with a statement that cited the jersey had been “procured by our consignor from a member of Nadal’s inner circle shortly after the U.S. Open.”

When the auction closed, not only did this particular Nadal shirt sell for more than $6,000, it sold for 12x more. In total, 52 bids, the most attracted by any lot in the SCP auction, pushed the price to $72,000, a new auction record for any tennis shirt.

One day later, that record was a record no more.

On Sunday, Prestige Memorabilia, which hosts The Tennis Auction, presented a Rafa-worn shirt from the 2005 French Open. This shirt made headlines before the hammer fell as the first to sell with a photomatch from Resolution, a level of authenticity that has eluded the tennis market.

“It’s so rare to see photomatched tennis shirts,” Cashin told Altan Insights. “They don’t have the large mesh holes or some of the distinct features that jerseys in other sports like basketball and football have.”

The perfect storm of a photomatch and the attribution to Nadal’s first Grand Slam title helped the Nike cutoff realize $113,924. The record book was re-written, and match-worn tennis shirts have their first six-figure sale. It’s the first match-worn tennis apparel to reach those levels on its own; several Federer-worn ensembles achieved the feat at Christie’s in 2021, but with the help of rackets.

So, what’s driving the sudden surge in tennis attention? Cashin cited increased auction participation by way of tennis enthusiasts and a strong international presence.

“There are more tennis-specific fans coming along. I think a lot of tennis people who are interested in memorabilia weren’t even aware that you could buy this a year ago,” said Cashin. “Certain items, like a pair of Iga Swiatek shoes, sold for almost $9,000. I don’t think there’s any way they could’ve done that well previously.”

Tennis: It’s an international sport dominated by international talent, revered by an international fanbase, with a memorabilia market that’s gaining international attention.

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Sales volumes continue to decline at the high end of the sports collectibles market, but the market is as nuanced as ever. To understand the push and pull of supply and demand in its various categories and subcategories requires an in-depth examination of the data.

Fear not: we’ve done the heavy lifting for you, looking beneath the surface to understand how different pockets of the market are really performing.

Is vintage growing tired from carrying the market? Is modern ready to chip in and do its part again? Is game-worn faltering under the weight of massive expectations? All will be answered.

This in-depth research report from Altan Insights examines auction sales, market performance, and much more to understand how the market held up across categories, eras, and sports. Game-worn vs. cards. Vintage vs. modern. Physical vs. digital.

Inside, you'll find:

• A detailed analysis of auction activity and the types of assets selling best

• Card market performance and commentary, with subcategory nuance thoroughly explained

• An update on the game-worn memorabilia market, including the Sotheby’s NBA Auctions partnership

• Fascinating and relevant market trends in each sport

• Records, grading population updates, the ongoing Type I photo explosion, ticket market analysis, digital collectible details, and much more!

Whether you work in the industry, collect assets, or invest, the information needed to keep your finger on the pulse of the sports collectibles market is here, captured and made digestible.

Click the link below to receive your free copy of the report today!