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Sotheby’s Head of Streetwear on the ‘explosion in prices’ for sports memorabilia

Brahm Wachter, Sotheby’s Head of Streetwear and Modern Collectables, joins Yahoo Finance to discuss Sotheby’s auction for Michael Jordan’s rookie sneakers and outlook on the sports memorabilia market.

Video Transcript

- Going to switch from energy to a juiced up auction market, and Sotheby's with an auction coming up later this month. Going up on the block, a pair of Michael Jordan's Nike sneakers, expected to sell for a million bucks. Here with details, Brahm Wachter, Sotheby's head of streetwear and modern collection. That means each of these shoes go for $500,000. That means I can't even bid on a shoelace. What is the appeal of these shoes?

BRAHM WACHTER: Well, I think that this specific model is really the genesis of the Jordan brand. So in 1984, when Michael Jordan signed his contract with Nike, Nike was still producing the first Air Jordans for him. And so with that said, you know, they created a limited number of Air Ships that he wore in the beginning of his rookie season. I've got them right here. And he wore this in his fifth NBA game. That's when the provenance is from. And to sneaker heads, it's the genesis of the brand. And so that's why it's really so important.

- And what is early demand looking like right now? Is the auction actually taking place tomorrow?

BRAHM WACHTER: So the auction takes place on Sunday. Right now, we're taking advance bids online, and the current bid is at 1.1 million. So it's been pretty strong.

- That is a steep starting off point, let me tell you, my friend. Now, the sneaker market in general has taken off, just for regular folk who go out and buy sneakers. And that's translated to the high-end market and collectibles. What sort of market is it right now, and where are the buyers coming from geographically?

BRAHM WACHTER: So the buyers are split really all over the world. We just had a sale in Hong Kong, which did very well. We had a sale in Paris, which at the time broke the record for the highest price for a Nike Dunk. And we have a great amount of clients in the US and in Canada, so it's really a global market.

For us, it's a great way to meet new clients. So you know, 55% of our clients are new in each auction. And most of them range in, let's say, the 20 to 40-year-old kind of age bracket, about 65%. But it's a pretty global audience, and the base is pretty varied.

- So Brahm, I know that sneaker collectibles are white-hot right now, but overall, it looks like sports memorabilia has really found a sweet spot with investors, especially during the pandemic. Give us a feel for what things are like right now in the sports memorabilia world versus pre-pandemic.

BRAHM WACHTER: Yeah. And I think, you know, just a great example is we did our first sneaker auction in 2019. We sold a pair of Nike Moon Shoes, at the time for the highest price ever for that kind of asset, for 437,500. Earlier this year, we sold Kanye West's Grammy-worn Air Yeezys for 1.8 million. And that was a world record. And so just in a period of two years, and really the two years of the pandemic, you can see that it's quadruple the highest price for a pair of sneakers.

But we're seeing this also in other types of collectibles. Obviously, the trading card market is white-hot. You also see the same thing in the game-worn jersey market. A Kobe game-worn jersey went for over $3 million earlier this year. And so we are seeing an explosion in prices.

- And do you see more sports auctions coming up in the future because they are so popular? What sort of percentage, what piece of the pie is sports compared to the other things that you auction?

BRAHM WACHTER: I think that, you know, going forward, I think especially into 2022, we certainly plan to do more sports memorabilia auctions. You know, and we are really trying to grow this segment of our business to make it as large as possible, really.

- I'm curious if Sotheby's is planning to do anything with NFTs as it relates to collectible sneakers and sports memorabilia, because we see that NFTS in general have taken off quite a bit, especially among well-known athletes themselves, who are sort of taking possession of their brand and their image and coming out with their own NFTS.

BRAHM WACHTER: Yeah, I think that's super interesting. And it's a trend that's definitely happening in the market, and we're certainly taking note of it. We are seeing a trend that, with a lot of these super important sports memorabilia items, people do want to attach NFTs to them. And so going forward into the future, I think it's something that is definitely going to take a really active role in the sports memorabilia market, but also more broadly, I think, the collectibles market.

- All right, Brahm Wachter, Sotheby's head of streetwear and modern collection, I can't wait to see how much these sneakers actually sell for when they do. Thank you so much for your time.