Fanatics buys PWCC

[raulus]

Originally Posted by BobC

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.

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.

Originally Posted by BobC

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?

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.

Originally Posted by BobC

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?

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.

Originally Posted by BobC

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?

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.