NBA Inks Deal To Make Sotheby's Auction House The Exclusive Purveyor Of Game-Worn Jerseys And Sells Victor Wembanyama Rookie Jersey For $762,000

The National Basketball Association (NBA) signed a deal with Sotheby's auction house that will make it the exclusive source for game-worn player jerseys. 

The move comes at a time when sports collectibles are reaching astronomical prices at auction. Through this partnership, Sotheby's will also make other NBA memorabilia available to interested buyers.

The league and Sotheby's marked their partnership with a tipoff auction, which consisted of over 60 game-worn jerseys from the league's best players. LeBron James, Steph Curry and Kevin Durant all had jerseys in the auction. The highest-grossing jersey was from rookie phenom Victor Wembanyama's first game in the NBA. Before the auction, it was estimated that the jersey would fetch between $80,000 and $120,000. Those prognostications turned out to be way off.

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The final hammer price on Wembanyama's jersey was $762,000 — more than six times the high end of the estimate. To put that number into perspective, the average house in the United States costs just over $500,000. So, who would spend more than the cost of a house on a used basketball jersey? You might be surprised by the answer. The profile of the typical sports memorabilia collector has changed drastically over the last several decades.

There was a time when only hardcore sports collectors, or very rich San Antonio Spurs fans, would be the only people lining up to buy a rookie jersey. But the potential upside in this particular Wembanyama jersey and sports collectibles, in general, are attracting a new kind of buyer: investors.

Not long ago, a game-worn Wilt Chamberlain Lakers jersey from the NBA finals was auctioned off for $4.9 million. It's not known what price the original seller paid for the jersey, but it's safe to say they earned a tidy profit. Even if they paid $250,000 for the jersey 20 years ago, the nearly $5 million sale price means the jersey radically outperformed most other investments the owner could have made during that time.  

Game-worn jerseys or game-used equipment are among the most popular of all sports collectibles. They are scarce, which automatically drives their wow factor and overall value. Aside from that, two other important factors drive the price of sports collectibles:

• The magnitude of the player who wore the jersey or used the equipment such as a hall of famer or an all-star player
• The importance of the game it was used/worn in such as a championship game, record-setting game, all-star game or rookie debut

Wembanyama is the most highly rated prospect since James. If he ascends to the heights scouts are predicting, and many are saying he has Hall of Fame potential, the jersey he wore in his first NBA game will be worth millions. With a price adjusted for inflation, the jersey could be worth tens of millions 20 years from now. That's why it's just as likely that an investor, or group of investors, bought Wembanyama's jersey as it is that a hardcore collector bought it.

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Although game-worn collectibles are in high demand, there has always been one huge problem with them: verifying their provenance (authenticity). Uniforms are the property of the team, not the player. Complicating matters is that only equipment managers really know what jersey was worn in what game. As time passes and players retire, jerseys get lost, memories fade, and it becomes difficult to follow a particular jersey's chain of ownership. Without the provenance, there is no value.

That's why the Sotheby's and NBA partnership is a win-win for all sides. The NBA has one of the world's most prestigious auction houses selling its most valuable collectibles. Sotheby's gets an exclusive partnership with the world's most elite professional basketball league. The winning bidder gets peace of mind of knowing they're buying a 100% authentic item.

Although the Wembanyama debut game jersey sold for an impressive price, there remain several potentially valuable NBA game-worn jerseys that will come up for auction in the next several years. A long list of Hall of Fame-bound players, including James, Durant and Curry, will begin retiring in the next five to seven years. That means Sotheby's is going to be busy, and a lot of records will probably be broken at auction.