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Friday, February 22, 2008

More thoughts on the World's Greatest Music Collection auction.

Well, there were some bidders, but *shock* the winner has vanished into thin air. Who didn't see that one coming?

As a certified record nerd, I've been thinking about this auction and I think I have it figured out. See, there's a lot about it that just didn't make sense to me (as I noted last post.) But there's even more, like why didn't they use a real auction house instead of eBay? And, considering they've mentioned it's inventoried, why wouldn't you put an inventory list up, or at least the most valuable stuff, to entice a buyer? The actual listing was pretty poor and the Q & A with the selling agent really didn't give much more insight.

Then it hit me, they didn't expect to sell this on eBay. I mean, if they did, cool. But, I think this turned out exactly like they planned.

Why? Well, you can't buy the kind of publicity this auction got. A lot more people are aware this guy is cashing out than would be if this was just done at Christie's or announced in the record collecting press.

The three million starting price was a joke and they knew it. I'm sure they would have taken it had it been seriously offered, but I don't think they expected to get any real action at that opening bid. But, they did get the word out and now the world knows this guy is looking to sell.

I'm still highly skeptical of the estimated $50 million value. How many $10K Rolling Stone albums (currently available on eBay, buy it now for $4000, BTW) does it take to offset the hundreds of "Here Comes the Hotstepper" I'm sure are in this bounty? And I think that right there is a lot of the reason the guy is having a hard time finding anyone to pony up for this collection. It isn't worth nearly as much as he thinks.

On that note, if my theory is correct, they might have hurt themselves with the auction. We already know the collection isn't really worth $50 million as no one is willing to pay that for it. Same for $25 million, which, IIRC was what he was shopping it around for prior to eBay. Now we can safely say it isn't worth $3 million either as no one was willing to pay that for it.

I guess the big question is, what is this collection really worth? The truth is, no one really can say until it sells.

The other side of this is that a collection this large is going to be a constant money drain. He has this in a warehouse I'm guessing he owns. How many people in the country own enough space to house something like this? And managing this beast would be a full time job on it's own. No private collector has those resources, to say nothing of the fact that it's way to broad a collection for anyone not obsessed with owning a copy of every record pressed to keep together (which is one of Paul Mawhinney goals in selling this thing.) Unless you're Bill Gates, you'd have to sell parts of this thing full time just for upkeep on the parts you want.

Regardless, I think this was a neat way for them to get publicity. As to what happens now, I think one of two things will occur. First off, I'm really skeptical anyone is going to come through and buy the whole thing. I could see a group of people wanting to get into selling, but even then, I have a hunch this would be a poor investment and if Mawhinney really wants to keep this together, I don't see this happening.

So, that's the question. How serious is Paul Mawhinney about not breaking up his collection? Assuming he's serious, he'll end up donating it somewhere, if he can find someone who has the resources to deal with a collection of this size. (And really, what museum would this collection fit into anyway? That's the part I can't figure out.) If it's the money he's after, he's going to have to begin the long process of selling it off piecemeal.

Now, this guy has been a dealer for a long time and I think he knows what's up. While many people in the media were portraying this as the bargain of the century, I really think he'd take a bigger bath selling out one at a time than all at once. (See the Rolling Stones auction above.)

It'll be interesting to see what happens now, that's for sure. Having just taken a pittance for selling a huge load of records at a chain reseller, I guess there's some solace in knowing there's at least one guy doing even worse than I am.

EDIT: I'd like to add this link to a 2003 Pittsburgh Business Journal article about the two previous failed sales of this collection. I'd encourage you to read it and make up your own mind, but I think it's just making me a bit more convinced I'm on to something here.

EDIT #2: After reading a bit more about this guy and going over the part in the above link about the Library of Congress' offer in 2003 that he told them to go shove (and I'm assuming it was more than the eBay thing,) I'm starting to doubt my theory after all. The picture I'm seeing is a dealer guy who knows the "book value" of what he has and wants nothing less. The funny part is, most of the current articles highlight a few records that really aren't that impressive (17 first editions of Elvis' Christmas album! Whoopie!) so I'm beginning to really doubt the value of this collection. Historical value, sure. Financial value, maybe not.


Anonymous said...

This guy's predicament is sort of sad, particularly since he doesn't seem to know what he's talking about. In the youtube video, he holds up a little record that he claims is 128 years old. (I read elsewhere that the record is by Teddy Roosevelt.) Anyone who knows anything about 78's knows that these claims are fallacious.

Anonymous said...

Mawhinney's predicament is sad, particularly since he doesn't know what he's talking about. In a youtube video, he holds up a little record that he claims was made in 1881. (I read elsewhere that the record is by
teddy Roosevelt.) Anyone who knows anything about records would know that both claims are nonsense.