In Spongebob we trust: how Phreon is cashing in on collectible coins

In Spongebob we trust: how Phreon is cashing in on collectible coins
Hiding in Henderson is Phreon, a company that leads the world in designing commemorative coins and links the FBI, the Niuean government – and SpongeBob SquarePants.

Hiding in Henderson is Phreon, a company that leads the world in designing commemorative coins and links the FBI, the Niuean government – and SpongeBob SquarePants.

The West Auckland commercial building isn’t much to look at. Its front wall is mostly taken up by a roller door, and a mural of local boy Bruce McLaren on the other side of the railway line is far more likely to catch your eye if you’re driving past.

But behind that door hides a successful little New Zealand company with a story that somehow includes the FBI, the Niuean government, a high-profile suicide attempt and, naturally, SpongeBob SquarePants.

Welcome to the odd world – even to its owners – of one of the world’s leading designers of commemorative coins, Phreon. 

If you’ve shelled out anywhere from $20 to $190 on a commemorative coin in the past five years – and a surprisingly large number of people around the world have – there’s a good chance it was designed by Heath Wilkes and Dave Robertson of Phreon.

From their Henderson studio, Wilkes and Robertson have designed hundreds of coins, almost all for export and mostly for Auckland bullion and commemorative coin company New Zealand Mint.

So what is a commemorative coin when it’s at home? To a collector, the most important thing is that it’s actually legal tender. If you can’t spend it somewhere, then that shiny metal disc is, well, just a shiny metal disc (or medallion, in collector-speak). So almost all of the coins Phreon designs, whether they’re to mark the Chinese New Year, 100 years of Colt Pistols or the centenary of the Titanic’s sinking are legal tender on the tiny Pacific island of Niue.

Why Niue? Because Niue lets them, basically. A licensing deal with the Niuean government means it gets some handy revenue and, because Niue is in the Commonwealth, Phreon gets to pop a picture of the Queen on the back of its coins. (Fellow Commonwealth tiddlers Pitcairn and Christmas Island also get in on the act occasionally.) Technically, then, you could slap your Darth Maul limited edition .999 proof silver commemorative coin down on any dairy counter in Niue and walk away with a nice can of Coke. You’d be nuts to though, Wilkes reckons. Aside from the $150-odd purchase cost, each $2 coin contains an ounce of silver, worth about $40.

Who on earth would pay the extra $110 or so?

According to Wilkes and Robertson, there are two kinds of coin buyers. One market is interested in whatever is featured on the coin, rather than coins themselves. So fans of military assault rifles, for example, might want to own the Colt M16 commemorative coin, packaged in an authentic 30-round magazine (as seen on TV) that dispenses the coin in the same way the real thing chambers a cartridge. Star Wars fans can choose between the entry-level $20 coin at Wal Mart and a range of rather more upmarket options, including a Darth Vader mask case that makes authentic asthmatic noises when opened and a rather irresistible Millennium Falcon package.

Phreon also designs for the Chinese New Year market, tapping into the tradition of giving cash gifts by producing a new animal themed coin each year.

The second market is the hard-core coin collector. For these guys (and they mainly are guys), unique design and scarcity are where it’s at. When New Zealand Mint released a Phreon-designed Great White Shark coin last year, YouTube was awash (well not Psy-awash, but coin-collector awash) with unboxing videos featuring white-gloved new owners gushing over the coin’s world-first ‘sharkbite’ perforation.

If you think this all sounds a bit nuts, then you’re not alone. I get the idea that finding themselves at the leading edge of a global (but niche) industry has taken them a little by surprise. While outside the window it’s Henderson, on the other end of the phone it could be Hasbro discussing a Transformers design, or the Bulgarian State Mint signing off a set of anniversary coins.

Nothing in Phreon’s story, though, is quite as nutty as the SpongeBob SquarePants saga. In 2012, high-profile US-based investment company owner Russell Wasendorf tried to kill himself, admitting in his (not quite) suicide note to embezzling millions of dollars of client funds. After his arrest, the FBI seized his company’s remaining assets, including (of course!) $375,000 worth of Phreon-designed SpongeBob SquarePants coins (‘In SpongeBob We Trust’), which Wasendorf had commissioned. Mysteriously, despite an FBI search of presumably Dotcom proportions, 76 sets of coins were never recovered.

The result for SpongeBob SquarePants coin collectors (and if you’re getting tired of reading that name, think about how I’m feeling typing it) was that the secondary market for the coins went through the roof, with some changing hands on eBay for thousands of dollars. Wasendorf, meanwhile, got 50 in the big house and was ordered to pay $215 million in restitution.

Meanwhile, back in West Auckland, across the road from the railway line, Wilkes and Robertson tinkered on, turning sketches into designs into coins into a nice little earner and an unlikely New Zealand business success story.