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Sporting memorabilia: an investment own goal?
Sporting memorabilia can be a sometimes lucrative investment, but the fickle world of sport can throw up some pitfalls.
by Rob Griffin on Jan 29, 2016 at 09:00
Within hours of Tyson Fury being crowned heavyweight champion of the world after defeating Wladimir Klitschko last November, a variety of items relating to the controversial boxer began appearing for sale on eBay.
Photographs, boxing gloves and shorts that he had supposedly signed in recent years, along with DVDs, T-shirts and even newspapers from towns he had visited were being offered by sellers keen to cash in on interest from fans.
Whether any of these become viable alternative investments will depend on whether they are genuine, the number of items he signs and the length of his reign at the top of the sport, according to specialist auctioneer Graham Budd.
‘A lot depends on how he is remembered, as he seems to be a slightly controversial figure at the moment, despite his achievements in the ring,’ he said.
‘Diego Maradona was a fantastic footballer but he’s not particularly loved because of his handball [in the World Cup quarter-final] against England in 1986.’
The shirt worn by Maradona (pictured above) is nevertheless believed to be worth over £200,000 and is currently on display at the National Football Museum in Manchester.
Playing the value game
The idea behind sporting memorabilia is to collect items such as autographs and entrance tickets in the hope they will rise in value. For example, the signed shirt of an up-and-coming footballer who will go on to ply his trade in the Premier League and represent England appears a sound investment.
The value of such investments depends on there being limited supply and strong demand, although in the fickle world of sport the latter can change in a heartbeat. Many of today’s heroes will be forgotten in five years’ time.
The market can also be volatile and unpredictable. While popular sports, such as football, enjoy a relatively constant demand, the popularity of others spikes when an event such as the Olympics takes place or something remarkable happens.
‘When England won the Rugby World Cup in 2003, people were paying between £750 and £1,000 for a full set of signatures on a replica shirt but now you’d only be looking at £500 to £700, although I believe this will rise over time,’ said Budd.
The most sought-after items, generating the highest sums, either depict truly historic sporting events or are associated with a legendary individual. Morbidly, their value often increases sharply after the sportsperson in question dies.
Football legend Stanley Matthews’ 1953 FA Cup winner’s medal (pictured above) went under the hammer for £20,000 in 2001, a year after he died, but was sold last year for a staggering £220,000.
‘This represented a very good investment,’ said Budd. ‘People see memorabilia as an alternative investment because a lot of people are keen to spend money on high-quality collectibles. As a buyer, it is probably better to spend your budget on one or two expensive items.’
Aim for authenticity and rarity
Buying a piece of sporting memorabilia does not need to break the bank. For example, a limited edition Muhammad Ali signed print sold for just £62 at an auction held by Bonhams two years ago.
Proof of authenticity is crucial to the future value of pieces. Memorabilia firms, such as Icons.com, sign contracts with governing bodies and players to produce authentic merchandise.
Ben Soley, the company’s sales manager, said limited edition pieces represented the best opportunities for investors, simply by virtue of their rarity. This is one of the reasons why Icons has launched a match-worn collection.
‘We try to create limited edition products at every signing as these will increase more in value,’ he said. ‘The trends in sporting memorabilia tend to be cultural. The US really likes boots and balls, whereas the rest of the world prefers signed shirts.’
A prime example of limited edition items was the run of Barcelona shirts with the number 91 on the back produced by Icons. Signed by Lionel Messi, the shirts commemorated the Argentine forward’s achievement of scoring 91 goals in a calendar year during 2012.
‘We sold them on our site for around £350 in 2013, and if I was a buyer now, I’d pay up to £500 so that’s an increase of around 30% in two years,’ said Soley.
‘You can buy a signed Messi shirt from every football season, but this is timeless because his record is unlikely to ever be beaten.’
According to Justin Modray, director of Buckinghamshire-based Candid Financial Advice, the key to making money in this area is knowledge of the market. Having a thorough understanding of which items will be in demand and which will become less coveted is crucial.
‘If you are good at spotting a bargain, there are some decent investment returns to be made. But if you’re paying a premium from retail outlets, the chances of making a decent return will be slimmer,’ he said.
As well as pointing out that sporting memorabilia only offer the potential of capital improvement and not an income, Modray warned of the potential implications of income tax and capital gains tax (CGT) on such investments.
‘If you’re buying and selling memorabilia regularly, HM Revenue & Customs may say it’s taxable as an income,’ he said. ‘If you’re buying just a few items, you’ll still need to be conscious of your CGT allowances, depending on how much you are making.’
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