Valuations are a big – but quiet – part of what we do. Estate planning, divorces, so much of the law revolves around trying to figure out what things are worth. That is a lot harder than it sounds because once you get away from the stock markets, gold standards, and everything that takes up columns of tiny print in the Wall Street Journal most things – even those of great value – are subjective.
Case in point: a baseball card reached $4.5 million in an online auction that ended on June 20th. It did not sell as it failed to meet the anonymous sellers equally anonymous reserve price.
The card was a 1910 Honus Wagner Piedmont baseball card – one of the Holy Grails of collectables. It’s also, by the way, in bad shape. It’s graded in “poor” condition.
The T206 Honus Wagner card and the Mickey Mantle rookie card are the Old School ‘if-only-my-mother-hadn’t-thrown-out-that-shoebox’ great what ifs and the reason shoe boxes of baseball cards for $5 a pop sell so well at estate sales.
This particular card is pretty much a mess. But – and this is a big but – as far as anyone knows, there are probably only 60 Honus Wagner cards in existence. Of those 60, some have been ‘restored’, others altered in some way, some recut.
This one—dubbed the “Connecticut Wagner” after surfacing at a 1985 card show—is in its natural state, flaws and all. That grittiness may be adding to its value.
What does that say about how we assign value? And how do we square it with more traditional notions—like business valuation, damages in a lawsuit, or the future cash flow of a closely held company?
The answer lies in scarcity, provenance, and narrative. Then, of course, there is the story behind the card: it was issued without Wagner’s approval. When he finally saw it, he asked for it to be pulled from circulation because he was opposed to smoking. That adds a patina of 1910s innocence to the whole package – the best ballplayer of the 1900-1910s not named Cobb making a stand for America’s kids against tobacco.
Great story, but, you guessed it, a myth. Honus incessantly smoked cigars and had a constant chaw of chewing tobacco in his cheek when he wasn’t smoking – even on the field. The real reason he had the card pulled is that Wagner – way ahead of his time – didn’t want anyone profiting from his likeness. Pulling his card was purely a business deal.
Still, the Honus Wagner card is a phenomenon that exposes the emotional and analytical side of valuation. This Wagner card has sold for more every single time it’s been auctioned. No one identical investment in gold, stocks, or fine art can make that claim.
Is the Connecticut Wagner “worth” more than $4.5 million? In the economic sense, absolutely—if someone decides to pay that much. In a rational world, that might sound absurd. But valuations aren’t purely rational. And, of course, the circumstances around the are key: if you need to sell because of an estate issue, a divorce, or any of a dozen other reasons, well, there’s a ton of factors at play, most are out of your control.
Translation: the circumstances around the sale are key.
Asset Valuation 101: Why “Worth” Is Not One Number
- Standards of value differ. Fair market value (hypothetical willing buyer/seller) is not the same as fair value (often used in shareholder disputes), investment value (value to a specific buyer), or liquidation value (forced-sale scenario).
- Premises of value differ. Going-concern vs. orderly liquidation vs. forced liquidation will produce very different numbers.
- Markets are uneven. Public stocks print prices every second; private companies, art, and collectibles trade infrequently. Thin markets amplify story and timing.
The Honus Wagner Playbook: Scarcity, Provenance, Narrative
- Scarcity: Fewer than a hundred known examples, with many altered or restored. Fewer authentic, unrestored copies increase price pressure.
- Provenance: The “Connecticut Wagner” carries a documented trail back to a 1985 show—paper trails build trust and value.
- Narrative: The tobacco myth vs. the likeness-rights reality shows how stories drive demand even when the facts evolve.
Auction Mechanics That Move Price (or Kill a Deal)
- Reserve price: The seller’s minimum. If bidding stops at $4.5M and the reserve is higher, no sale closes.
- Condition grading: A “poor” grade can still command a premium if the item is ultra-rare and unrestored.
- Timing & audience: End dates, bidder liquidity, and media buzz change outcomes—especially for one-of-a-kind assets.
- Buyer’s premium & fees: All-in cost to the buyer may exceed the hammer price, which can cap bids.
How This Maps to Law: Estate, Divorce, Business, and Damages
- Estate planning: Executors need defensible date-of-death values. For unique assets, expect an appraisal plus comparable-sales analysis, not a ticker price.
- Divorce: Jurisdictions may use fair market value or intrinsic value; discounts for lack of control/marketability can matter for family businesses.
- Business valuation: Methods include DCF, Guideline Public Company, and Precedent Transactions. Choice of method and assumptions moves results.
- Litigation damages: Causation and discount rates matter. Courts scrutinize methodologies and expert credibility as much as the math.
Practical Checklist: Preparing a Valuation That Will Survive Scrutiny
- Define the assignment up front: Standard of value, valuation date, and premise of value in writing.
- Assemble evidence: Provenance docs, prior appraisals, insurance riders, restoration reports, comparable sales, financial statements.
- Hire the right expert: Credentials (ASA, ABV, CFA), domain expertise (collectibles vs. operating companies), and trial experience if litigation is possible.
- Cross-check methodologies: Reconcile income, market, and asset approaches; explain divergences.
- Document the narrative: Why this asset, at this time, to this market—include risks that could reverse sentiment.
- Plan for timing: If the sale is compelled (estate tax, decree, liquidity), adjust expectations and strategy accordingly.
FAQs: Valuation, Auctions, and “Is It Really Worth That?”
Why did a “poor” card approach $4.5M?
Extreme scarcity plus clean provenance and a marquee narrative can outweigh condition in thin markets.
If the reserve was not met, does that lower the value?
Not necessarily. It sets a public marker for current demand. Value may clear higher or lower later depending on timing and bidders.
What is the difference between fair value and fair market value?
Fair market value assumes a willing buyer and seller, neither under compulsion. Fair value is a legal construct that can exclude certain discounts and is often used in shareholder disputes.
How often should estate asset values be updated?
At death (for tax and reporting), at distribution, and whenever a significant market change occurs before filing deadlines. For ongoing trusts, schedule periodic re-appraisals for volatile or unique assets.
Do stories really change price?
Yes. Narrative shapes perceived scarcity and desirability. Courts will still look for methodology, but buyers in thin markets buy the story as much as the asset.
Key Takeaways
- Value is a conclusion, not a constant. Define the standard, the date, and the premise before you start.
- Scarcity, provenance, and narrative explain why unique assets can outpace “rational” benchmarks.
- In legal settings, documentation and methodology carry the day—especially when markets are thin and emotions are not.