An unrelenting game of oneupmanship has raged over the last week, with a series of escalating bounties offered for the LeBron James, Steph Curry and Kevin Durant triple autograph card.
From Ken Goldin to Geoff Wilson and numerous others upping the ante multiple times each day, much like Mark Twain’s line, “If you don’t like the weather, just wait a few minutes." Such has been the climate in bounty land.
Don’t like the $500,000 price, wait a few minutes (and refresh Twitter).
No matter how seemingly outrageous the bounties become, the question remains: Should the lucky winner of the card simply take the highest bounty?
I say no.
Here’s why:
Ignoring the fact there are surely to be bounties on offer from companies and individuals seeking only social media impressions rather than a serious negotiation, even the top offer isn’t necessarily a collector's best option to receive the most cash.
Auction houses and sellers fighting to woo collectors into consigning a hot card via their sales is nothing new.
And this rare triple-auto card might represent the most competitive pre-bidding process we’ve ever seen.
Not only are there plenty of cash offers on the table for six-figure sums, but also, in a few cases, guaranteed minimums at auction.
The most interesting of these comes from Sports Card Investor's Wilson, who teamed up with Fanatics and Sotheby’s to offer a $250,000 irrevocable bid if the owner submits the card to the auction house.
Irrevocable bids, which have long been commonplace in the art world, are a mechanism used by auction houses to allow for a guaranteed price floor. In return for placing the bid, the irrevocable bidder (in this case, Wilson), is entitled to a percentage of the upside (meaning the difference between the final price and the bid).
This is particularly important in the current scenario for a number of reasons.
For starters, simply reviewing the options of bounties and settling for the highest price acts as a ceiling. If one accepts a bounty, that is it — no opportunity to truly test the market and see exactly how badly the other bounty hunters want it.
In a situation with so much hype and clear competition, the goal should be to force all suitors to compete in a timed and marketed environment.
Even if one is unable to ensure an irrevocable bidder is in place, there is enough incentive on behalf of the auction houses to be open to negotiating zero or negative consignment rates. Considering the interest many of the houses have already signaled, and the fact this negotiation is rather common for big-dollar items, shopping around for the best rate will at the very least eliminate concerns over losing money on seller’s fees.
At best? The card receives a free marketing machine to get it in front of the right people — and most importantly, force them to fight it out. Just because an offer is sent out into the ether prior to the card surfacing doesn’t mean that’s the highest price one is willing to go.
Plus, the competitive nature of an auction format will serve to play on the egos and impulses of those same potential buyers.
One caveat to note is the bigger the business you’re negotiating with — Goldin, Sotheby’s, Fanatics — the less flexibility you will have with tax implications as opposed to a cash offer from a small business.
Will Stern is a reporter and editor for cllct.