What would happen if PSA went out of business?
 

The thought crossed my mind today on how so many graded cards (PSA specifically) have values that are closely tied to the registry. What would happen to values if PSA went bankrupt and the registry were to cease to exist? Obviously, there would still be millions of their graded cards out there, so personally collectors would still be able to collect them, but would values decline significantly if there was no registry competition for these graded examples?

Yes.

And what if baseball stopped being played...

It would be interesting to know what percentage of revenues PSA derives from various categories: vintage never submitted before, crackouts/bumps, modern, the current year's cards, and of course all the other stuff they authenticate. I wouldn't assume the business model is indefinitely sustainable although they seem very adept at generating demand.

Prices would go up, as they wouldn't be making anymore

What a silly response.

I'm not saying it's going to happen (it's very unlikely), but to think it couldn't happen it quite ridiculous.

The folks at Montgomery Wards probably thought the same thing at one point. It had only been in business for 125+ years :rolleyes:

My initial hunch is that when it comes to the registry, there'd be enough of a market that some third party could start a new registry for PSA cards (or perhaps purchase the current one and operate it).

The OP concern is an actual possibility, this not so much.

To the question, I think Yes. The prices would come down.

Yes, prices would drop, but just to SGC & BVG levels. People will always fight over high grade examples. They just fight harder when there's a scoreboard.

Psa
 

There are many attorneys here so hopefully one of them will comment. I would assume in the case of a bk, the registry could be an asset to be sold if it was a liquidation bk. Certainly there is value in continuing the registry and advertisers would sill invest in space once a third party was able to operate the new site.

Building off the OP question: what if PSA was the only TPG in the market. Would this affect the value of PSA cards and would grading still be as popular?

Please report any pricing irregularities attributed to the Monster Number scoreboard.:D

right, 125 years is long enough for PSA to not worry about if PSA is going out of business.... you starting a thread on things that are by your own admission, '..very unlikely' to happen, may garner some responses you don't like..

baseball can stop as well, that's unlikely and saying it couldn't happen is quite ridiculous as well...in 125 years there may not be baseball.............people still pay for GAI holders by the way in the 1000s....and they are out of business....there are other companies that took over the slack...which would happen if PSA was done

once all sportscards stop being produced 'its unlikely to happen' then PSA would be in trouble..if baseball stopped, baseball cards would stop being prodcued as well you would think..

your response saying my response is silly is just...silly......... the question deserves the response.


So lets everyone start threads on things thats unlikely to happen or on what would happen 125 years from now..

The OP said on the issue you said is an 'actual possibility' is very unlikely and gave a scenario that took 125 years to occur so yeah its a an 'actual possibility' that he says is unlikely and backed it up with something that took 125 years.......I think people have said cards can disintergrate if given enough time.....I don't think my comment of baseball not occurring can be said will never happen ever either...given enough time.. a lot of things can change in 125 years..the steroid scandal really hurt the game, whos to say another huge scandal doesn't occur plus other things can happen that could kill the game that no one can envision now..

"IF" PSA went out then they would sell off their assets or their assets would be sold through a bankruptcy court. Agreed the registry is valuable and because it is set up like a scoreboard for collectors, I do not see that going away anytime soon,no matter who owns it.

As long as there is a scoreboard (registry) I do not see prices dropping. I've been collecting cards since the "Dead Sea" was only sick. I have never submitted a card to be graded. The only time my cards get graded is when they are consigned to an auction house and they send them off.

The last thing any collector wants to do is pay good money to have all their cards graded and then when the time comes to sell them, that grading company might not be the best one to realize the best gain. Just think if people rushed out to use "PRO" 15 years ago.

Sure PSA, SGC,and Beckett are the main ones in our hobby now, but who knows what the future will be. There are some big coin grading companies out there and what if they want to come into the card market! They hire away the best graders and take it to a higher level.

Best way to maximize profits is to have your cards graded by the best company for that issue at that time. So for now I will keep the cards in Mylar sleeves and then in top holders. Last thing I ever want to do is to break cards out of graded holders to cross them over.

Actually, I didn't use any examples. You are confusing me (the OP) with someone else. That being said, how about a more recent example? Blockbuster Video. Did anyone see their demise coming in the mid 1990's? They were booming! Today, they are gone. Mismanagement happens. What about a scandal? Businesses close for many reasons. PSA is not foolproof. Likely soon? No. But, certainly not far fetched.

Collectors Universe has no debt. Let me say that again. Collectors Universe has no debt.

The title of the thread would be more appropriate if it said what happens if SGC or BGS go out of business.

They have great financial metrics and would easily be able to cut their dividend and whether the storm. With coin grading making up a very large percentage of their revenue you would need to see a sustained down turn in the collectibles market that would devastate the industry for this to happen and if CLCT went under SGC and BGS will have hit the skids long in advance. PSA literally has over 90% market share of the new submission market and if you saw a large retraction in the overall number of cards graded they would be the last one standing.

If in the hypothetical scenario they went under all cards will have collapsed in value and there would be no where to hide.

So David what you are implying is that if PSA went out of business we would have bigger issues to worry about! Maybe a good comparison is IF the FDIC had to come in and pay you back money (under 250k) that your bank used because of the economy then we would all have bigger issues to worry about like the US Economy.

Factoid.. FDIC has up to 100 years to pay you back in that unlikely scenario.

Never liked Block Buster video either and with all the late fees on 2 day rentals was a JOKE! They considered it 2 days after 24 hours plus 1 minute. They closed sometimes at peak hours at night so when you returned your video, they could add the fee the next morning!

Montgomery Ward or Wards. Either are correct. Saying Montgomery Wards around corporate could have resulted in a $1.00 fine once upon a time.

:D

Mike - who worked for Wards as an electronics buyer up until the plug got pulled by GE and still misses it dearly.

Jay, I had that exact experience. I was in the Air Force and HAD to report to work by 11:00 PM for my shift. No excuses. I dropped off several videos one night about 10:30 and when I went back a few days later to rent more was told that I had $8 in late fees. I placed my videos on the counter, and handed them my Blockbuster card and told them I was done. That was 1993, and I never went back.

Perhaps the bigger threat to PSA (or any TPG) is a scandal whereby their authentication process is undermined. If some sort of rampant pattern revealed a TPG were intentionally and deliberately grading forgeries, etc., that would be more damaging to the market for cards in their holders than a bankruptcy (but who knows how much more or less likely than a bankruptcy).

Irrelevant to the viability of the company itself, considering the plenitude of altered 'high grade' cards (which according to grading rules should prevent them even grading a poor), the future landscape and valuation for such cards may be different in the future.

Further, when collectors realize how often collectors resumbit and resubit and resumbit again to get different grades on the label for the exact same cards, it may dawn on many that investing in numbers is silly. Many people, including many here, already realize this, but many collectors still invest big bucks in the number on the label and the registry is predicated on the numbers.

I just expect that in the future that the numbers on the holders will be viewed and valuated differently than they are today.

Yes if PSA went out of business the hobby as we know it would be under serious distress and it wouldn't matter which third party grading company holder your card was in they would all be down. At this point it is hard to call the card grading business an oligopoly and in reality it is more like a monopoly. Losing the flagship enterprise doesn't happen without a serious downturn in demand.

If one is to worry about potential price declines from a grading company no longer doing business it is far more likely that the number two or three player would leave the market with the size share they each have. In the case of SGC they are obviously viewed as legitimate and there are some very expensive cards in their holders. I would think they would take a little hit but many are already trading in a second tier position based on price so I wouldn't think it would be catastrophic. I do believe if BGS went out of business that their cards would take a serious hit as many would want to cross them over and once it became clear to more collectors that their chances are quite low of an equal or higher grade the spread would widen further. Let's face it many modern cards have plenty of supply but are differentiated by grade. That would impact them significantly where SGC has many actually rare cards in any condition in their holders so if the market remained somewhat healthy the interest in those cards wouldn't die.

Like grading a t206 Wagner KNOWING it was trimmed?

LOL, this hobby thrived just fine w/o TPG grading and if every TPG went out of business tomorrow, the hobby would still be just as alive.

Completely agree - I'm not a registry person so can't speak to that part of it. But I have to believe that a PSA 5's prices aren't going to significantly drop just because the company stops grading cards. The registry stuff is probably a valid concern if no one would end up picking that up, but hypothetically, I think the values would mostly hold up pretty well.

What would happen if PSA went out of business?
 

PRO would corner the market. :D

They don't specify categories quite as fine as you mention, but the CLCT 10-K and 10-Q filings have some pretty interesting information in them, particularly regarding their revenue breakdowns. The most recent quarterly report doesn't have any new information, so I'd recommend just reading the annual report:

http://investors.collectors.com/secf...32&CIK=1089143

(all reports):
http://investors.collectors.com/sec.cfm?view=all

Cheers,
Steve

What would happen if PSA went out of business?

More cards would be graded accurately!!:eek:

Yes, of course shady things have happened, like the Wagner. And Mastro has said alterations on high grade cards are common (I forget the quote or numbers he used). But to this point, I don't think the "common" aspect of his allegation is proved.

But my point is not that there isn't altered cards that have been graded (or forgeries). We have all seen examples, probably as recently as today in a post on this site, of graded cards that are accompanied not only by numbers, but by suspicions. To my knowledge, any suspicious cards beyond the Gretzky Wagner have not been consciously graded as unaltered despite knowledge by the grader that it was.

Even with Mastro's allegations, the market for high grade vintage does not seem to have been impacted. It's as hot as ever.

What I would see as a death knell is more of a systematic pattern of deception by <insert TPG name here> that completely undermines their process, their products, their reputation and all their preceding work. So that graded VG 1965 Topps Tigers Rookies Roman/Brubaker, along with everything else the company has done, is suddenly questionable (at best).

Funny thing with the Wagner, and probably other cards of that ilk (both in alterations and prestige), is that I've read in places that people would be just as interested in acquiring it as they were before the trimming was confirmed as it makes for a great story.

I had to read this a few times to make sure I was reading what I thought I was reading.

I guess this makes two of us that are laughing because I can't fathom that one could think the hobby would be just as alive if third party grading went away. So much demand is built around the pursuit of value. Why do unopened boxes sell for what they do? Sure a peace of the value comes from nostalgia but the vast majority comes from the fact that there might be hidden treasures inside that can grade high.

PSA grades in the neighborhood of 1.6 million cards a year. A large percentage of those are for resale and if there wasn't grading prices wouldn't be anywhere near what they are and many of these cards wouldn't be bought in the first place.

No one needs a mint or gem mint card but because of grading and the value proposition that can follow it has breathed life back into the hobby. Not a day goes by that I don't read about record prices for HOF cards and guess what they are all graded. If grading goes away these prices aren't even remotely sustainable and as prices collapse so will interest.

It isn't just the registry stuff that would decline. There are plenty of cards that sell for many multiples from NM to NM-MT to Mint to Gem Mint. Sure there would be variance but you wouldn't see cards sell for 100 times more then another copy.

Let's assume that if PSA went out of business, then all PSA web functions would cease when PSA ceased to exist.

People would not be able to continue the insanity of trying to have the HIGHEST rated set in the universe. Nobody would know about it. Where would all the CU posters go for their daily dose of talking about who has/had the best set. Perhaps they join N54 and then they start arguing about it.

Maybe this could depress the price of cards. I sure wouldn't mind if that happened.

Yes, this hobby was absolutely dead before grading came along. How did it survive for so long? Thank goodness TPGs came along and saved our hobby. :rolleyes:

Psa
 

I don't care. Been collecting since 1957 and have as few graded cards as possible. My collection is likely worth a lot but it has always been a hobby to me and my family will not need the money from my cards. That's the way a hobby should be.

Where is Doug when you need him ?

right Baseball is a business too.... scandals have happened as well in baseball I believe.............like I said you can pose the question if you want about if PSA went away, but I can also bring up what if baseball went away...if one is silly to say, so is the other for the same reason...or neither one is silly to bring up....that's fine by me..

Isn't it reasonable to assume that technology will one day put PSA out of business? I don't find it difficult to imagine the day that a scanner will be capable of more accurately grading a card than the kids over at PSA. After all, isn't technology as responsible for putting companies, and entire industries, out of business as much as anything else? (including Blockbuster!)

technology is taking away umpire decisions in the game with instant replay....there was a recent baseball game exhibition where computer called balls and strikes..no more umpire....maybe the players will be replaced with technology as well...

My guess is that of the 3 major TPGs, SGC is the most likely to disappear, after having been acquired by Beckett.
Val

Artificial intelligence may someday start collecting baseball cards too, as soon as it gets the collecting bug chip.

Acquired? That would be news to Beckett, I think.

[QUOTE=ALR-bishop;1493309]I don't care. Been collecting since 1957 and have as few graded cards as possible. My collection is likely worth a lot but it has always been a hobby to me and my family will not need the money from my cards. That's the way a hobby should be.

[QUOTE]

This.
For those of us that do not earn our livelihood from this hobby, this is exactly the right mindset

Leon, I'm merely forecasting the future! :D
Val

If PSA is the company to employ that technology, it wouldn't go out of business, though. It would probably reduce it's workforce of kids...

+1

Sent from my SM-G900V using Tapatalk

FYI there is already a company in the works to employ that technology. That is all I have to say for now

It's another 30 years minimum before robots will be able to do the authenticity smell test of cardboard.

If PSA went out of business everyone would go back to the arbitrary system of grading we all loathed before TPG's. One man's NRMT is another's EXMT and so on. You need a TPG to even out everything. Of course that TPG doesn't have to be PSA.

They, like the gasoline engine, aren't going anywhere in our lifetimes.

Larry

Wow, what a thread.

Most of the points I would make have been made, to me the best one regards a certain trimmed card that "started" it all.

Before you correct me, note my use of quotation marks, I don't need a history lesson regarding the people who get paid for their opinions.

What would happen if the people who get paid for their opinions went out of business? I think the world would be a slightly happier place.

But that's just me.

And Al.

And Robert.

And...

30 years? Today we have retinal scans, 3D printers, even iPhones with fingerprint recognition, etc. It's actually hard for me to believe that the technology does not exist today to measure a card's printing resolution, cardboard stock, level of gloss, centering, topography for creases, and all the other elements that would authenticate and grade a card.

said technology detecting surface issues would be the key component and the reason scanners can't be employed to go the entire length of the field.

ya still need the monkeys in one way or another...

eta: now dance monkey! ;)

lol how true!!