The handwritten, annotated manuscript for "Like a Rolling Stone," considered one of the most influential songs in postwar music, could sell for as much as $2 million, while the lyrics for "A Hard Rain" have a pre-sale estimate of $400,000 to $600,000.
Other top items in the June 24 sale in New York include one of Presley's flamboyant jumpsuits from his days performing in Las Vegas, a piano played by singers David Bowie, Elton John, John Lennon and Aerosmith, and an infamous contract signed by Jimi Hendrix.
"A lot of this material is the soundtrack for a generation," Richard Austin, Sotheby's head of books and manuscripts, said about its first dedicated music history sale in more than a decade.
The 150 lots in the sale, dubbed A Rock & Roll History: Presley to Punk, come from collectors and people who worked in the music industry. They range in price from an estimated $200-$300 up to $2 million for the Dylan manuscript.
"Bob Dylan is probably the most studied rock performer of the last 40 years," said Austin. "Rock and roll was so intrinsically tied to the social change in the 60s and also to the generation that was coming up."
The auction will include the smashed guitar played by the late Kurt Cobain of Nirvana in 1989, photographs, signed album covers, Grammy awards, original artwork, drawings and clothing worn by singers Michael Jackson, Sly Stone and Jimmy Page of Led Zeppelin.
Presley's jumpsuit could bring in as much as $300,000 and the 1965 contract in which Hendrix agreed to play exclusively for PPX Enterprises for three years for the advance of $1 has a high pre-sale estimate of as much as $200,000. The settlement agreement to break the contract is also being auctioned for $40,000 to $50,000.
"Elvis always is an icon, and there are quite a few items from Elvis, as well as punk material and posters from the 60s and 70s," said Austin.
Sotheby's decided to hold the sale now to test the market and to see what collectors are interested in buying. Earlier this month, original manuscripts and drawings by former Beatle John Lennon sold for $2.9 million, more than double the estimated price.
"One of the ways we planned the sale was to give a range of material, both in terms of its estimate and what kind of material it is," he said, adding that there has been a positive change in the price of the best rock and roll material in the past decade.
"The market is becoming a little more mature and advanced and we had the chance to offer the Dylan manuscripts, which I think are incredibly important."