Caveat Emptor, Seller and Auctioneer When Sports Memorabilia Is for Sale

Aug 14, 2009

By Irwin A. Kishner, Esq.
Days before the scheduled auction of memorabilia at Major League Baseball’s All-Star FanFest, the auctioneer, Hunt Auctions, pulled several 19th century letters when questions regarding their true ownership arose. Most prominent among them were entreaties for reinstatement from a player barred for conspiring with gamblers to one of organized baseball’s founding fathers. Hunt removed the letters from bidding while the FBI investigated whether the letters had been stolen from a collection or whether the seller, who consigned the items to Hunt, was the legitimate owner and therefore had the right to put them up for bid.
The episode, which unfolded in mid-July, should serve as a reminder to buyers, sellers and auctioneers that although collecting sports and entertainment memorabilia is fun and can be profitable, the landscape can be a minefield of forgery, fakery and questions of provenance. There is no absolutely foolproof method of ensuring provenance and legitimacy, but collecting and trading are best accomplished by dealing only with brand-name dealers and auction houses.
Hunt Auctions, which contracted with Major League Baseball to run the memorabilia auction, anticipated that James Devlin’s plaintive letters to Harry Wright would fetch a sum in the neighborhood of $50,000. But when questions arose over whether the unnamed seller was the legitimate owner of the letters, Hunt did what most reputable auctioneers would do in those circumstances and pulled the questionable lots.
Hunt apparently believed that its fee for auctioning those lots was not worth the potential blemish to its reputation or the liability it might face if it were discovered later that the seller did not legitimately own the letters.
As a sports and corporate lawyer I represent major auction houses, including, and have sat across the negotiating table from others, including Steiner Sports, most notably in my representation of the New York Yankees in a deal that enabled Steiner to sell memorabilia from the old Yankee Stadium. I am also a collector of sports and entertainment memorabilia. In both roles, I concur with Hunt’s actions and the words of its president, who has said publicly that it is generally best to stay conservative when questions of ownership arise.
A bit of background: Harry Wright was one of the founding fathers of baseball and organized, managed and played for the 1869 Cincinnati Red Stockings, the first professional baseball team. His correspondence is considered particularly valuable — historically and in pecuniary terms — because they document the earliest business practices of baseball. James Devlin was a Louisville Grays player who was barred for life for conspiring to fix games in the 1870s.
The letters were donated — apparently as part of the Albert G. Spalding Collection — in 1921 to the New York Public Library, from which they vanished two decades ago. The Spalding Collection, consisting largely of old baseball photos and other memorabilia, belonged to Spalding, a professional player and later owner of the eponymous sporting goods company that made and sold, among other things, baseball equipment. Spalding’s widow donated the collection, which included Harry Wright’s library.
The seller, who was of no relation to Wright, told Hunt Auctions that the letters came from his grandparent’s estate. But Wright’s great-great-granddaughter, Pam Guzzi, found it odd that people from outside the family would have legitimate access to the letters. Hunt, properly in prudence mode, first suspended bidding and then pulled the lots in question.
Many tenets of American law are murky and subject to interpretation. Among the black-letter, bright-line notions of law, however, is one that a thief cannot convey clean title.
Talk about the ultimate caveat emptor: If you acquire in good faith a collectible for which you paid, you can end with empty hands and pockets — not to mention in the middle of a legal dispute or investigation — if the seller did not legitimately own the item and, therefore, did not have the right to convey it to you.
What is a buyer to do?
We are in the information age, so first do a search of the Internet — blogs, boards and on-line communities — to see if there is any buzz about provenance issues surrounding memorabilia. Most crucial is that buyers should work with reputable auction houses or sellers, who have the expertise, resources and ability to investigate the origins of an item. (Beyond increasing the likelihood that the item in question is what it purports to be and is legitimately owned by the person who claims to own it, auctioneers’ and collectors’ expertise in storing, handling and shipping the items come into play. But that’s another topic for another day.) In addition to increasing the likelihood that legitimacy and provenance are in order, dealing with noted auctioneers and sellers also gives buyers additional comfort. It helps to know that if something goes awry, name-brand dealers are not only motivated to preserve their reputations by correcting problems, but also likely to be around for negotiations to begin.
These notions apply not only to sports memorabilia, but also to collectibles from the entertainment world. The recent death of Michael Jackson spurred a bevy of trading of items once belonging to — or somehow related to — the King of Pop.
Auction houses and dealers who sell from their assemblages also should take heed. Their product may be memorabilia, but what they are really selling is their reputation and credibility. The surest way to ruin a collectibles business is to break faith with the buying public. To the extent it is possible, they should spend the time and resources to assess the authenticity and origins of any item before marketing it for sale or agreeing to auction it on behalf of a seller.
In the case of the Wright letters, had Hunt been less prudent and the investigations revealed that the seller was not the legitimate owner, it would not only have received negative publicity but also, very likely, the service of lawsuits from buyers looking to recoup their cost of their purchase. For Hunt, this was a relatively easy call given that the FBI was investigating, but that does not happen often. My general recommendation to auctioneers is to engage in a case-by-case analysis of the likely legitimacy of memorabilia by considering the sources and presumed credibility of any rumors, experts’ opinions, and the value of the items to be sold. It is always good practice for sellers to document evidence that can help establish the provenance of an item, tracing as far back as possible its origin and the chain of ownership dating as far back as known.
A minor irony is that buyers’ and sellers’ agendas in memorabilia trading are roughly aligned. Each is better served if the legitimacy and provenance of collectibles are apparent and well-documented. All parties to memorabilia transactions are far better off doing some homework now than receiving condolences later.
Liliana Chang, a summer associate at Herrick, Feinstein, assisted in the preparation of this article.
Irwin A. Kishner, Esq. of Herrick, Feinstein LLP, chairs the sports and entertainment practice group of Herrick, Feinstein LLP, a New York City-based law firm. He represents a number of professional sports franchises in their corporate, finance, transactional, acquisition and general business affairs, and well-known memorabilia auction houses in provenance issues and others. He acted as lead counsel for the New York Yankees in its deal to sell memorabilia from Yankee Stadium. He also acted as lead counsel on several high-profile acquisitions of franchises; cable television and radio contracts; concessions contracts; stadium and arena financings; advertising and sponsorship contracts; and development and naming rights agreements for stadiums and arenas.


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