The website of SGC expressly states that the owners and employees may submit cards. So there. No need to speculate about what if’s.

Further to your point, Bob, there is a clear, public interest in having CPAs do their work free from conflict, or even the appearance of conflict. There is no such analogous interest in what third-party graders do. Third-party grading has been riddled with conflicts of interest and the appearance of conflicts of interest from day one in my opinion. And nobody is really up in arms about it. It just goes with the territory. PS if you want to read a great thread about another example of conflict of interest, look at the thread on blow out about Joe Clemons.

The perfect encapsulation in a single story narrative of what a complete and utter farce the ‘grading’ game is. And yet everyone will continue to participate in it.

Hmmmm!

I fully understand the need for the strict rules and requirements for CPAs, as we are the ones that audit the companies that are then able to be traded on stock markets. The SEC and other government regulations require it. And the final undeniable truth behind that is one thing, and one thing only..... MONEY! Ours, and basically the entire world's economy, relies upon the major stock markets around the world to allow people/companies to invest and keep the globe's overall economy moving. The independence and lack of conflicts-of-interest and other biases of the CPAs/auditors that continually audit and report on these publicly traded companies is integral to allowing investors around the world to have some semblance of faith and trust in the numbers they receive and see for all these audited companies around the globe, being traded on the world's stock markets. We've all seen how the reported numbers for companies can have a very direct, and almost instantaneous effect on a publicly traded company's perceived value, as represented by their ever-changing stock prices. Those prices, and therefore the underlying values of these publicly traded companies, are based, in great part, on those numbers and figures reviewed, audited, and attested to by independent, outside CPAs/auditors.

Similarly, a pre-war (and other) baseball card's value, aside from who the player(s) that is shown on it is, is next most often determined by its condition, and is particularly important and integral to determining the different values of cards of the same player(s) from the same set. Those supposedly honest, independent, and unbiased opinions that TPGs give on those cards they grade are for the most part the sole, or at least likely the most important, factor used by dealers and collectors to determine what someone will sell or pay for a particular card. In other words, the TPG opinions basically comes down to the exact same thing as CPA opinions at the most basic level......MONEY, and how much someone will then pay/sell a particular card (or stock) for. The biggest difference between cards and publicly traded companies, on whom TPGS and CPAS/auditions, respectively, give their opinions, is that companies and their operations and financials are constantly changing, whereas a sports card shouldn't be changing their condition over time, and really should only require a single, one-time TPG opinion. But the basis of both CPA and TPG opinions still directly effects the value of the things they are giving their opinions on. At this most basic level, TPGs are really no different than CPAs, as both of their opinions directly affect the amount of money someone will pay for something. So really, why shouldn't we expect/hope that TPGs at some point start being held to more of the similar standards that CPAs are faced with? The opinions of both directly affect the perceived values of certain things, and as a result, what others will therefore pay for those things. And the integrity and trust of those giving such opinions are needed to keep the people in both those markets confident in their investments. And let's face it, we've talked about this as nauseum for a while now, whether we like it or not, most collectors are or have become more like investors than just collectors anymore. Values of cards over time have gone up so much, especially in the past few years, that even those that never considered themselves as anything other than a true collector can't ignore the dramatic increase in value their collections may have experienced, and have to at least start thinking a little bit more in terms of being an investor, again, whether they like it or not.

For now though, the biggest difference as to why TPGs have probably not been more aggressively held/pushed to more stringent independence and conflict-of-interest/bias rules like CPAs is, once again, likely all due to simply money. Or more specifically in this case, the AMOUNT of money involved. The stock market gets hit by fraudulent and biased, non-independent auditors, companies go bad, investors lose faith and the stock markets tank. People worldwide lose billions/trillions of dollars. Meanwhile, the entirety of the card hobby doesn't have overall value anywhere even in the same universe as that for all the publicly traded stocks in the world. Most all governments don't/won't give a shit about regulating cards and TPGs because first, you're supposedly talking about a hobby. Secondly, you're also not talking about enough potential money/value in all the cards in the hobby to likely disrupt any country's economy if something were to blow the hobby up, like a loss of faith in TPGs and the cards they've graded, due to all their current and prior biased, conflicted, non-independent work finally being found to not be trusted anymore by the hobby community.

We have to face it, that the card industry is becoming more like an investment industry, every single day. As such, shouldn't the parties that are supposed to be independently reviewing and grading the cards, that helps determine their value in the public's eyes, start being held to similar standards and rules as those who give opinions that help establish values in other investment markets, like CPAs do?

And for those that still say cards are not investments or potentially now making up at least an alternative investment industry, please explain how cards can now be held for owners by third parties in vaults like investment advisors hold securities for their clients, how you can buy fractional interests in cards just like you can buy shares of stock in a publicly traded company and own fractional shares of them, how you can then borrow against your cards just like investors can set up margin accounts and borrow against the value of their investments, and so on.

If it looks like duck, swims like a duck, and quacks like a duck......it's a duck! If it is handled like an investment, speculated on like an investment, stored like an investment, borrowed against like an investment, flipped like an investment........................

It's a bit of a paradox, we want the graders/authenticators to be entirely independent, essentially non-collectors in many ways.
But we also want them to have a lot of in depth knowledge, and non-collectors aren't likely to have that. Many collectors don't, which is part of the reason to have authenticators.(maybe less so for grading)

The difference in fees is common in several hobbies, I think it's based on a few things, like insurance risk while something expensive is in the building, how much value is added by the grading, maybe the cost of the more experienced person doing the grading, stuff like that.


I do wonder just how far things can be pushed along the lines they're headed. I want that answer to be "not much further at all" but realistically I think people will put up with any level of potential or actual crookedness as long a there's money to be made. The grading companies have pretty much proven that already.

The statistical analysis was devastating, and Clemons' defense that he somehow just had a better eye than anyone else in the world was beyond absurd.

For the unfamiliar, the bottom line is that according to the analysis Clemons, a former Beckett employee, receives an astonishing, unfathomable percentage of the cards Beckett designates "Black Label" (all 4 subs 10) that can only be explained by favoritism.

Fanatics buys PWCC
 

PSA and the others charge higher fees for higher priced cards for the simple reason that it’s within their economic reality to do so.

If every ‘52 Mantle #311 submitted cost $25 to grade, they would likely be immediately inundated with every marginally ignorant collector flooding their offices with fakes to see what might happen “just in case” it’s real. The fees effectively prevent this on ‘52 Mantles, and a host of other pricey vintage and modern cards - and I don’t blame them in the least for taking that approach.


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The fee structure is a very minor issue in the scheme of troubling things, IMO.

I'm not sure exactly where the TPG and their higher prices became a part of the topic. I guess I have to go back and figure out the post or two that I missed. But I understand why they do it. Mainly because if you can afford to own a high valued card, you should be able to afford a higher grading fee. I'm sure there are other smaller reasons, but money and greed is always going to be the number one reason, and that's fine, because it happen's everywhere.

The premiums on higher priced auctions, such as a card that sells for $25k compared to a card at $1k. The website resources being used are the same. I could see if the higher valued card gets a full page in an auction catalog, but overall, the same thing.

Any boat owners in here? Just another example. If you can use the word Marine in the part description, regardless if the vehicle part is exactly the same, as in quality and material, you will probably pay double or more for the marine version, because you can afford to own a boat.

That's just how life goes.

Hi Bob:

A few observations:

1) No, I'm not kidding. Yes, as a Northern Italian, I'm full of sarcasm, always looking for a quick joke, and you should rarely take me seriously. Life is too short not to have some fun and find every opportunity to laugh, including frequently laughing at ourselves. I highly recommend it.

But no, I'm not kidding here.

2) I don't dispute that the grading process is rife with the potential for manipulation, self dealing, and other hijinks and chicanery. However, while you seem convinced that TPG fees are contingent fees, I'm not entirely convinced of that fact. Since contingent fees for graders seem to be a favorite hobby horse of yours that you delight in riding hard and putting away wet, it seems like it's worth poking at a bit more.

3) There's no need to cast aspersions at my professional abilities. If you want to disagree with me, then go for it. But implying that I am a poor CPA is unnecessary and unwelcome. So while I appreciate that we share the same profession, I really don't need you to question my capabilities as a fellow professional. Hopefully my desire to hash out the details here doesn't drive you to impugn my credentials and malign me in continued similar fashion.

4) Based on your expansive exposition above, I'm not convinced that you are familiar with the various service levels and current fee schedule for grading, at least not for PSA. I've never submitted to another TPG, so I can't speak to other graders. Based on my interpretation of your comments, since you don't seem to be familiar with even the concept of a service level, or with the various levels of service offered by PSA, allow me to share a link to the current fee schedule, which outlines those levels of service, the turnaround times, the estimated value limits, and pricing for each service level: https://www.psacard.com/pricing

The process works thusly: if I decide to submit an item to PSA, I first get to estimate the value of my item (valuing it based on the value once it is graded), and then I submit the item at that service level. For example, if I estimate that my item is worth $1,000 based on what I estimate it will grade at (let's say I have an estimated grade of PSA 5), then I submit at the "regular" service level, which currently costs $75. Since I estimate my item is worth more than $499, I cannot submit at a lower service level, such as the "bulk" level, which would only cost $19 per card. Allow me to observe that this is not a contingent fee schedule, at least not yet. In a moment, we'll dig into the details around potential variations, and perhaps there will be an opportunity to get there. Certainly if the fee schedule was: "The fee is X% of what it's worth", or alternatively, "We only get paid if we deliver XXX grade", then that would clearly be a contingent fee schedule. A quick perusal of the current fee schedule demonstrates to even the most casual observer that this is not the case here.

5) Allow me to get on my virtual soap box for a moment and expound on precisely what constitutes a contingent fee. A contingent fee exists in a situation where the service provider only gets paid for a certain outcome. Or where the fee rises and falls based on the outcomes delivered.

In this case, let's say that my valuation was based on my item grading at a PSA 5. If it only grades at a PSA 4, does PSA make less? Hell no. What about if it grades at PSA 3, 2, 1, or A? Still no change to the fees that PSA charges. If it were a truly contingent fee, then PSA would make less if my item grades lower. With many contingent fees, if the desired outcome is not achieved, then the service provider makes nothing. Certainly the lawyers among us will tell you that if they take on a case based on a contingent fee and then lose the case, then they make nothing. Not the case here.

I will grant you that in certain limited circumstances, PSA will not charge for their services. I've experienced this when my item did not meet a certain minimum size requirement. While this might minimally seem to meet the definition of a contingent fee, it seems to be a stretch to me, particularly because it's not something that occurs very often.

[Note to any haters that the minimum size finding was not because I was doctoring my cards. Either I pulled them from the pack cut this size from the factory, or I bought them raw from others, and PSA didn't like them.]

6) Let's examine the opposite case. Let's say that my item grades at PSA 6 instead of my original estimated PSA 5. (Side note: Like that would ever happen). Does PSA make more? Probably not in this case, since the next highest value level doesn't kick in until my item hits a value of $1,500. And even then, as I noted earlier, if it's close, perhaps valued at $1,600 or $1,700, then I've never seen them get cute with me and attempt to bump me up to the higher price.

It is true in this example that if my item were to be grade wildly higher than my original estimate, then I would experience an upcharge. So if my original estimate of a PSA 5 actually turned out to be a PSA 7 or 8, then I might be in a spot where I would end up with an upcharge as I bump up above the $1,500 limit at the "regular" service level, which would currently put me up at the "express" level of $150 for my card. Naturally, most of us would be wildly ecstatic if our item that we expected to grade at PSA 5 comes back at PSA 8.

7) I think there's room to argue here about this somewhat unlikely scenario and whether that constitutes a contingent fee. I grant you that this very specific and narrow fact pattern could seem like it's a contingent fee, simply because the fee to the service provider rises as the value of the item rises. However, I would submit that this outcome is not common, particularly these days where most grades from PSA seem to be coming in lower than expected. I also hasten to observe that the fee does not rise 1:1 as the value of the item rises. Typically in a contingent fee scenario, fees rise commensurate with the increase in added value. In this case, the value of my item could rise at least 50% to $1,500 with no change to the fee schedule. And arguably I could probably get away with it rising even more before PSA attempted to upcharge me. So while the value of my item has risen in a pretty dramatic fashion, as much as 50% (and possibly more), the fee to PSA is unchanged. Still doesn't sound like a contingent fee to me.

Moreover, I suspect that the vast majority of cases where there is an upcharge are not due to the item grading higher than expected. Rather, it is merely the result of the submitter attempting to squeak by at a lower service level. Let's go back to my example of my item being worth $1,000 if it grades at PSA 5. Let's say that I decide to get cute and submit it at the "bulk" level for $19, which has a declared value limit of $499. Maybe I'm just cheap. Or maybe I'm paranoid that my item won't really grade at PSA 5. So I push it a little. When it comes back and it's really a PSA 5, and PSA upcharges me, does that make it a contingent fee? I would argue that I'm merely paying the fee that I should have paid all along, but I tried to get away with paying less, and they caught me.

8) To reiterate, I agree with many/most/virtually all of the comments that highlight how the grading process is inherently flawed, subjective, and inevitably leads to disparate outcomes that drive us completely bananas as participants in this hobby. I'm just not convinced that contingent fees are quite the boogeyman that you assert.

9) If you want to disagree, then that's cool too. We can agree to disagree. That's part of the fun in an online chat board where we are free to express our opinions and debate the merits of any given viewpoint. But if I may be so aggressive as to beg your indulgence: please attempt to be a little more collegial in your disagreement. Even just a little would be peachy.

Whet ever happened to Mr Clemons with all the "proof" they had against him?

Nothing. To be clear, he wasn't altering cards, just getting preferential treatment, according to the claims.

If Fantastics could say come up with $25 billion perhaps they could buy out the MLB club owners and have the whole package. Consider the fresh material they could auction, thinking of a 1 of a kind game used Mike Trout jock strap (perhaps not that fresh).

Just kidding, of course, but nothing about our hobby surprises me anymore. The different directions and tangents taken worry me and cards seem to be very secondary to the desire to squeeze out every possible $ out of once was a hobby.

What would the World be like if Fanatics and Collectors Merged and Became a Publicly Traded Company WOZWER GO TO WAR MRS AGNES HOLY COW....Hey it Could Happen :-)

I'd leave to hear a fact-based reasonable argument that the evidence is "proof" and not proof.

I don't know what anyone would expect to have happen. I don't believe he did anything illegal, he just got gift grades from opinion sellers that were his buddies and former coworkers. It exposes the farce of this game, but I don't think he committed fraud and obviously Beckett doesn't give a shit so what would we expect to happen that didn't?

Or he hacked the system and changed the grades. Worked for Ferris Bueller's attendance record.

I don't see a problem with graders being collectors. It isn't like they are going to pocket the cards for their PCs. The problem is if the graders receive preferential treatment on their own subs.

The basic problem is our assumption that grading is a blind process performed by the pure at heart in monks' cells. It isn't. Never has been, especially at the National or any other on-site venue. I've had collectors and graders bring me in to look at boxing cards right in front of grading booths at the National. No anonymity there.

Nic,

First off, I was not trying to put you or your abilities as a CPA down. My apologies, but my intention was for a lot of those comments to be taken more as good natured jabbing at/with you. It is often impossible to truly project intentions and meanings using just printed words. But trust me, the jabbing comments were made in friendliness and with a bit of humor intended, not with any negative or critical connotations whatsoever.

Having said that though, I still don't understand your pushing the subject about the different service levels and such being somehow behind the point(s) I was trying to make. In trying to keep this response as short as possible, I'm just going to address the main, relevant point of this whole issue. And to that point, here is what you said as to "contingent fees", and to which I agree.

[B]5) Allow me to get on my virtual soap box for a moment and expound on precisely what constitutes a contingent fee. A contingent fee exists in a situation where the service provider only gets paid for a certain outcome. Or where the fee rises and falls based on the outcomes delivered.[/B

Now take that last line of yours, where you definitively state a contingent fee would exist in the instance where a fee rises or falls based on the outcomes delivered. So, having said and (hopefully) agreeing on that:

1) Do TPGs have fee rates at least partially based upon the perceived value of a card being graded, with such values determined by and in the TPG's sole discretion, yes or no?

2) Do the grades assigned by TPGs to a card they're grading generally have a direct correlation and impact to the value of that card (higher grade = higher value), yes or no?

3) If the answer to these first two questions is yes, then doesn't that also mean that if a TPG gives a higher (or lower) grade to a card, that normally means it will also have a higher (or lower) value, which also means the TPG can end up potentially charging you a higher (or lower) fee for grading that card based on their fee schedule, yes or no?

If yes again, remember - [B]Or where the fee rises and falls based on the outcomes delivered.[/B. Assuming you have honestly answered that the correct answer to all three of my questions is yes, then you have just definitively proven that TPGs do in fact charge a type of contingent fees, just not ones based on a straight/given percentage. And none of this has absolutely anything at all to do with whatever service levels were chosen for the card(s) being graded.

Also doesn't mean a TPG may end up charging such a contingent fee for every card they grade, like in the case where they grade a card of so little value that even if given a "10" grade, that card's value wouldn't rise enough to cause it to be subject to an upcharge based on their fee schedule. But whether they can do it for every card they grade or not, the fact is they still basically can end up charging someone a contingent fee based solely on their own opinion and discretion. Fact AND appearance!!!

And before you even try to say that no TPG would ever intentionally grade a card higher than it really should be, just to be able to charge more for grading it, how do you know that has never in fact happened, or that it never will or could? The correct answer is, you don't. And with no existing independent review or any outside oversight of TPGs to ensure they are being honest, independent, consistently accurate, and totally unbiased in the grading opinions they are giving, you never will either. Fact AND appearance!!!

Just because a pickpocket doesn't steal from every single person they pass on the street, or do so every day of the week, it doesn't mean they still aren't a pickpocket and thief.

Far more likely IHO they would grade a card too low in the hope the unhappy submitter resubmits it and pays another grading fee. Or, if they grade a card too high, it's likely as a favor to someone, not to squeeze out a few more dollars in fees. With due respect Bob, sure it's possible, but I would bet in the real world it isn't much of an issue.

Fanatics buys PWCC, so (of course) let's argue about TPGs.

Apology accepted. It's now obvious that I was taking you far too seriously, and I apologize for that. I promise I'll focus on looking for your friendly humor, so as to not misinterpret it going forward.

This statement is only partly true, and I would argue that your framing of the question is a bit skewed to try to get to a desired result.

As I noted, the process starts with the submitter first estimating the value, and submitting the item at the appropriate service level based on that estimated value formulated by the submitter. As I also noted, my experience is that PSA tends to be flexible/compassionate in their approach, rather than being aggressive to hit me with upcharges. I've read similar comments from others around here, so I'm inclined to believe that it's not just me.

As I also outlined in my earlier example, only a very significant and dramatic increase in value above my estimated value would lead to a rise in TPG fees. So my conclusion is that the correlation between the grade and the TPG fees is weak. Yes, there is a correlation. But my conclusion is that it's not particularly strong.

The exception, of course, is in situations where the item is right on the cusp of moving up to the next higher fee level, and a small increase in grade would move the item up to the higher fee level. I concede that's a possibility.

Yes, although as I noted as well, higher than expected grades are unusual in my experience. And postings from others around here support that conclusion. As I also noted, a small increase in the grade is often not enough to move the needle on their fees. In most cases, only a large increase would get there, often 2-3 grades higher than expected. I'm sure you'll raise a 311 Mantle as your counterpoint, but there's only so many 311 Mantles out there, and the valuation there in many ways is so far outside of the norm that it doesn't make for good examples.

And my experience is that increases in grades in the scale of 2-3 grades above the original estimate are very rare. I suspect it's happened before, and could happen again, but I would argue that such a situation is very exceptional. But just because it happens in rare cases doesn't mean that we should let it keep us up at night.

You bring up an important element here - if grades are lower than expected, do fees decline? The answer is no. This element cuts against the argument that the fees are contingent.

Maybe to sum up a little - I think the other inherent flaws in the grading process deserve a lot more attention than this issue. I would argue that the potential for self dealing and special treatment of friends and family is a much bigger deal. Plus the very nature of the process being incredibly subjective that allows for a significant amount of grader discretion.

I totally get that contingent fees gives you the willies, and cause you to question whether the grader can really be objective. That's cool too. I'm just not seeing that as the biggest issue in play here. A small issue, maybe. But given the enormity of the other issues in play, this one seems relatively minor to me.

As you noted in your earlier post, this might be as much an issue as lacking independence in appearance. I certainly see the potential for that. But based on personal experience and most theoretical fact patterns, I'm just not seeing it play out as an actual bias to assign higher grades to generate higher fees. If anything, PSA's recent penchant for grading 1-2 grades low these days actually works against this argument.

Do accountants get paid by the word? :D
97 has to be a forum record.

97 is shorter than most of his posts ;)

But combined with the post being quoted....

Sadly, we’re not attorneys. Just the ugly red headed step children who get no respect.

LOL. I can say truthfully I've worked with some great accounting experts over the years on many cases.

Doesn't matter, as both those instances as you describe them are most definitely potential abuses and absolutely describe potential instances of dishonesty, bias, conflicts-of-interest, and so on that a TPG can easily get away with because they currently have no independent oversight or third-party reviews of what they do.

For whatever reason(s), you and others seem to be focusing almost exclusively on the comments I made regarding TPGs charging contingent fees, in comparison to how CPAs and the rules we have to follow specifically prohibit such a practice, and for which we can lose our licenses to continue being CPAs over. Doesn't mean I am and was not also trying to point out how the lack of independent third-party oversight and review of TPGs can also then lead to them doing, and getting away with, the somewhat heinous actions you are describing. The implied bias and conflict-of-interest of TPGs because of instances where they can be deemed to be charging contingent fees is just a part of the overall issues that exist with TPGs not being subject to more rules, standards, oversight, and reviews, as CPAs are. They, TPGs, are giving their opinions on the authenticity and condition of items that can, and do, have direct financial impacts and effects on others. Exactly the same as when CPAs give their opinions on business financial statements and the financial condition of those companies they examine and audit.

The only real and true difference between the two, IMO, is the number of people, and the potential amount of dollars, that those two group's (TPGs and CPAs) opinions can impact and effect. Obviously CPAs can effect the overall world markets, and literally the economy of the entire planet. TPGs, nowhere near that kind of financial impact and effect. But does that difference in potential reach and economic/financial effect really mean to you and others that you can simply ignore or brush off instances of such blatant biases, lack of independence, conflicts-of-interest, and such from TPGs, and give them a pass by making such statements as you did -With due respect Bob, sure it's possible, but I would bet in the real world it isn't much of an issue.?

With that last statement of yours, you've admitted that such abuses and wrongful acts by TPGs are absolutely possible, but that basically no one cares. Isn't that exactly the problem, and the reason that TPGs can get away with seemingly doing whatever they want, with virtually no consequences or accountability resulting from any of their actions, no one seems to care? People like you and Nic seem to be saying that the TPGs aren't really doing any of those bad things all the time, and certainly not intentionally, so quit worrying and complaining about them because no one else really cares anyway. I'll bet you that with all the rules, regulations and oversight there are covering the financial world and markets, there are quite a number of people that would have wished to God that all those things worked much more effectively when it came to the likes of an Enron or Bernie Madoff back in the day, before both blew up and financially affected/ruined countless numbers of people. Now imagine how the financial markets would be, and all the additional negative things that may have happened, had there been no rules, regulations, independent third-party reviews and oversights at all. Just like there aren't any with regard to TPGs.

And despite the wishes of many, the "hobby" industry seems to be, on a daily basis, becoming more and more like an alternative investment market and industry. So maybe more people should start thinking along the same lines, and try to figure out how to begin going about implementing and imposing more of these same kinds of rules, standards, independent oversight and reviews on TPGs, just like CPAs face for doing the exact same thing, giving one's opinion on the status/condition of an item that can then financially affect others.

You're both basically telling me you don't really care, because no one else does. So, I shouldn't really care and complain either. This may be considered corny, but I'll leave you with the following words/quote, and say no more on the subject then.

“All that is necessary for evil to triumph, is for good men to do nothing; and most good men nowadays can be relied upon to do precisely that. Where a reputation for intolerance is more feared than a reputation for vice itself, all manner of evil may be expected to flourish.”

The relevance is that Fanatics has already acquired Topps, and now PWCC, so one of the questions brought up was what may be Fanatic's next move as far as acquisitions. Adding a TPG to Fanatics consolidated group is potentially a real possibility, and one that can have additional implications that may start to push the limits of ethical activity and conflicts-of-interest and so on.

As an alternative example, think of Warren Buffet/Berkshire-Hathaway purchasing one of the Big Four accounting firms today, and then have that accounting firm become the auditor/advisor for all the other companies Berkshire-Hathaway owns. That would be a totally unacceptable, biased situation, and under current rules, regulations, and laws, not a chance of ever happening. But lacking such rules, regulations and laws overseeing TPGs, that also render financially impacting opinions like CPA firms do, Fanatics could absolutely acquire a TPG, and then use that TPG to provide whatever services and work they want, with all the other companies under Fanatics ownership, in whatever creative ways they can come up with.

Could Fanatics afford PSA? Anyone know?

To put it in perspective Collectors Universe has 450ish employees (psa is probably most of that). Fanatics has over 10,000.

Psa was bought in 2021 for 700 million. Fanatics profit in 2021 was 3.4 billion.

The answer is yes, easily.

I was thinking the same thing. There are a thousand threads about the failings of TPG. Some of the threads started off as a TPG rant, others, like this one, just inevitably devolved in that direction. The same complaints by the same people over and over again, year after year. Nothing new is ever said, and nothing ever changes. Complaining, complaining.....

And yet, some of the loudest complainers offer for sale, or display from their collections, cards in PSA holders.

Seems to me that one of the reasons that Fanatics bought PWCC was to get their customers. Same would be in acquiring a TPG. Use that to further widen your market.

We complain and argue because we care.

And possibly because we don’t have any other outlet.

Fanatics has been slabbing cards for quite some time already, authenticating autographed cards from their signings.

https://fanatics.frgimages.com/orlan...pg?_hv=2&w=600

Fanatics' management cannot be blind to the fact that CCG was already grading game cards and started CSG by hiring some Beckett people. The next move could be a high profile hire from an existing TPG to run a new grading division. They already have the holder machines, all they need is a label redesign and someone to run the division. I'd even go so far as to speculate that the hire will come out of PSA in Cali because our state has the strictest laws in the country against allowing employers to force employees to sign non-compete agreements. They are 100% illegal and unenforceable against Cali residents regardless of where the company is located or what choice of law they stick into the contract.

Them owning both a manufacturer and a sales venue is just asking for bad stuff to be done.

I'd say we need a modern day Emile Autuori*, but even then.... remember the guy who was supposed to hand distribute the McDonalds Monoply prizes?

*Im really hoping someone gets that obscure reference, but doubting that even someone in vegas would take that bet.

It's been done before, and yes, it's illegal.

https://www.chicagotribune.com/news/...069-story.html

https://law.justia.com/cases/federal.../1344/2359710/

The story ends with the Philatelic Foundation repairing their reputation and again being a leader in the field.
But then, its an older hobby with far less crookedness and less tolerance for that.

To be fair the McDonalds guy did distribute the Monopoly winning pieces. It was just to friends that split the prizes with him.:)

Fanatics ownership group also owns CGC so all this speculation about what grading company they're going to buy is too late. Oh and do you really think it's coincidence that PWCC got into bed with CGC???

Wait , what ?
 

..But isn't that the grader E-Bay has suggested , where we should submit our sold raw cards ? Confused now.

..

Fanatics REVENUE in 2021 was reported to be $3.4B...big difference vs. profit

I think we as hobbyists should consider that Fanatics could implement cultural changes and innovations that we like, in addition to our pessimism.

I'm not certain that what Fanatics is doing is as nefarious as some of the posts describe. In business terms, they are following vertical acquisition, or "they are buying companies at different stages of production." This is very different than horizontal acquisition which people tend to generally dislike because it reduces competition. Vertical acquisition has been a successful business model for 150 years. Think Rockefeller and Carnegie as examples of men who successfully implemented vertical acquisition. They accomplished great things, even though they became obscenely rich.

Most of our major banks have followed this type. However, most people like the one stop shopping that is available at banks. People generally also like the cheaper prices that this model can provide. While problems do arise occasionally, it hasn't ended these types of mergers.

I wonder if we as hobbyists dislike what's happening with Fanatics because MLB / NFL / NBA etc created their own scarce competition by monopolizing within Fanatics. This is very different than Fanatics swallowing up all of the competition.

Luckily for us, though, we buy cards on the secondary market. Perhaps if Fanatics buys ebay or COMC will we see heads starting to explode. Now envision the Mind Blown GIF. That would be further expansion on vertical acquisition, but it would then greatly impact us vintage collectors.

Kind of. Fanatics Holdings, Inc., does not own the Certified Collectibles Group. CCG's parent is Blackstone, Inc. Michael Rubin, founder and executive chairman of Fanatics, is a minority investor in the Blackstone CCG acquisition. You may be right as to where the grading business is going to go.

Just to amuse myself, I clicked on PWCC to check out their new auction format.
I would offer up my thoughts: the quality of the material is poor overall, for example, all of the Goudey cards are graded authentic by some company I have never heard of, the bidding is almost negligible, although it is early, and everything was unimpressive. Few in our crowd would give it a second look.

Your initial statement is exactly right Steve. Am not, and never was, saying that if such an acquisition of a TPG by Fanatics did occur that there would definitely ever be anything nefarious or unethical occurring as a result. But it doesn't take a rocket scientist to realize that with no rules, regulations, oversight and such on TPGs that the means, motivation, and ability for such negative things to occur most definitely would exist. And when you're in a profession where your sole task is to act in an independent, unbiased manner, giving out opinions that have definite financial implications for others, you should never be in a situation where conflicts-of-interest, bias and such exist, in both fact AND appearance.

Despite what some may think, discussing such issues in light of the Fanatics acquisition of PWCC is absolutely relevant, as it is most definitely a very real and possible extension of actions that can come, based on what Fanatics has done so far. This thread is about what people think and how they may react to this most recent acquisition. So why is it that discussing where this may lead next, and the possible negative aspects of such projected actions, is somehow not relevant and acceptable to some to be discussed in this thread?

And for those themselves complaining (not you Steve), and putting down others and basically telling them to be quiet for daring to continuously expose and discuss actual and potentially negative things others are doing in the hobby, maybe at least one of the reasons you perceive that nothing ever seems to change as a result is because you, and others like you, keep telling everyone else to shut up and quit their complaining and discussions of such actual and/or potential negative activities. If they're not part of the fight/solution, did it ever occur to those trying to quiet others simply because they don't want to hear the negative stuff anymore, they may actually be part of the continuing problem, and one of the main reasons nothing ever does change as a result?

Once again - “All that is necessary for evil to triumph, is for good men to do nothing; and most good men nowadays can be relied upon to do precisely that. Where a reputation for intolerance is more feared than a reputation for vice itself, all manner of evil may be expected to flourish.”

Exactly right and all very true. The idea of acquiring/partnering with an already known and hobby accepted TPG though could also maybe be to take more advantage of that TPGs already existing client/customer base. Expand the market, as BlueSky alluded to in an earlier post. Building up your own TPG company, while stealing talent from other existing TPGs, can work very well also, especially when you also own/control an actual major card manufacturer and retail seller/market already.

This is quite different. They were selling counterfeit stamps and authenticating them by putting them in slabs. That's very different from someone offering a subjective opinion about the condition of a very much authentic item.

Don't get me wrong, I'm not saying what Joe Clemons et al did was OK, and he without question did receive favorable grades. I'm just saying I don't think the counterfeit stamps case would hold weight as precedence here.

I think this has been brought up like 5 times by now lol. Yet somehow, half the people here keep asking if they're going to buy a TPG. :facepalm:

But they're doing both vertical AND horizontal acquisition lol. They're gobbling up every license for every major sport possible and now control 90%+ of all cards that the hobby cares about going forward. Sure, Upper Deck still has hockey, for now, and Leaf still has street clothes Jason Giambi and Edward Snowden, but other than that, Fanatics now has a monopoly in this sector. There's effectively no more room for them to go horizontally, so now they're going vertical.

Maybe..............and maybe not. As Adam/Exhibitman pointed out, Michael Rubin is only a minority owner in the holding company that owns CSG. In hindsight, most likely his common ownership helped open doors for Fanatics in talking to PWCC about their acquisition, as you surmised, since PWCC and CSG were already partnered in doing some business activities together.

But as only a minority owner in CSG's parent company, his reach and motives will not necessarily prevail over those of CGC's other, majority owners. One of the mergers/acquisitions I was directly involved in a few years back saw my two clients, and the company they owned, taken over by a large, New York investment group. My guys would continue to run the company, and also retained a 20% minority ownership interest as well. After the deal was completed, there were some final clean-up calculations of escrowed monies, and my two guys ended up getting screwed out of over $1Million because of an unexpected change in the way some calculations that had been done by the Big Four accounting firm involved in the deal, and originally hired by the New York group, were suddenly changed. In a conference call meeting we initiated with the acquiring group to protest, I was simply told by one of the New York firm's reps that they were required to look out for their owners/partners in the deal. When I asserted that my two clients were also owners/partners in the deal, the rep just repeated exactly what he had originally said, and the meeting was effectively ended. And since the paperwork closing the deal had already been signed, my guys were effectively screwed. Being a minority owner doesn't always give you anything or any say so. Having Rubin's common ownership doesn't mean CSG's majority owners would automatically go along with and agree to do anything that Fanatics might want to do.

Collectors care for collecting and their collections. Hobby industry businesses don't always really care about collectors and how they collect, just how best to make the most money as possible off those collectors. And that is why such discussions as in this thread are often necessary, to remind those in the hobby community how these businesses pretty much running and controlling the hobby industry these days actually think and operate. The more you understand how and why businesses may be thinking and doing what they're doing, the better a collecting can maybe deal with and react to them. And the same goes for you as well Scott, as a small, private business owner operating in the hobby industry hierarchy as well. The things these big businesses/players are doing can definitely have an impact, both positive and negative, on your business going forward as well. We just don't know exactly where they're going yet, and what they're going to end up doing and how it will end up affecting everyone else involved. So, talking and having discussions about it isn't at all bad, and actually is pretty much necessary for people that want to start thinking about and figure out what to do going forward.

Wall Street seems to be abuzz about the collectibles market. How long before we see the launch of IPO's, indexed sports cards funds, margin trading, short selling, derivatives, options market etc. What happened to the hobby that chased cards not the all mighty dollar.

The first two have occurred multiple times in the past five years. Blowout has an index fund of unopened boxes. It was doing really good for the first two quarters; most recent values still show a tripling of the initial investment... boxes/cases will be sold over years 4-7.
https://www.blowoutcards.com/blog/ta...dern-wax-fund/
https://www.atticinvestments.com/wp-...t-12.31.22.pdf