Crossover grading

[benjulmag]

Originally Posted by Peter_Spaeth

How would altered cards be relevant to the suit you are proposing? Your suit concerns already-graded A cards and B's treatment of them, not B's grading practices in general. By the way even if somehow relevant, what admissible evidence is A going to provide to show that B slabs a high percentage of altered cards?

The suit would focus on A cards that B did not cross over and show those cards to possess the attributes of B cards that do have the desired crossover grade. The purpose would be to persuade the trier of fact that the real reason they did not cross over was not because of some objective assessment by B that they did not meet B's criteria, but instead due to an unstated policy of not crossing over. It would seem to me that by showing voluminous numbers of altered B cards that did have the desired crossover grade, B grading practices would come into view.

[Peter_Spaeth]

Originally Posted by benjulmag

The suit would focus on A cards that B did not cross over and show those cards to possess the attributes of B cards that do have the desired crossover grade. The purpose would be to persuade the trier of fact that the real reason they did not cross over was not because of some objective assessment by B that they did not meet B's criteria, but instead due to an unstated policy of not crossing over. It would seem to me that by showing voluminous numbers of altered B cards that did have the desired crossover grade, B grading practices would come into view.

How would you propose to show those and prove they were altered, consistent with the rules of evidence, Daubert, etc. It might be quite difficult as a practical matter to establish an adequate foundation for expert testimony.

[Dpeck100]

I have played the cross over game both in the holder and out of the holder. I do tend to think you have a better shot out of the holder but that is where all of the risk is. Whether it is position bias or not being able to see the card it is impossible to know. There is absolutely no case here that can be brought against grading companies and I am quite surprised it is even being discussed in a serious matter as if one would ever have a legit chance of moving forward with any level of success.

Under no circumstances can anyone prove the motives of a grading company when it comes to analyzing cards in other companies holders. PSA has such a dominate position that they couldn't care less what SGC does. They have no need to beat them further into submission. The market has.

This notion that all grades are equal in third party holders is laughable. I have seen numerous examples where cards can go up or down from company to company. I have had BGS 9's turn into PSA 10's and BGS 9's turn into PSA 7's. Even worse BGS 9'5's turn into PSA 8's.

Years ago I tried crossing over several BGS 8.5's and a BGS 9 1982 Wrestling All Stars Series A Andre The Giant. No luck. Cracked them out along with several others and had a BGS 8 go to a PSA 6, two 8.5's go to 8's, a BGS 9 that went to a PSA 7 the first time and then an 8, and another BGS 9 go to a PSA 8. This example is why a PSA 9 will out sell a BGS 9.5 for this card.

The registry is not the only driving force that differentiates prices. Those with large SGC and BGS positions tell themselves this to make themselves feel better but the collective market is smarter than this and has created quite the divide in prices. No grading company is perfect but in my view on the margin PSA is definitely the toughest. I have submitted to all three by the way.

The only SGC 98 1982 Wrestling All Stars Series A Hulk Hogan was a PSA 9 that had been subbed time and time again raw and for review at PSA with no luck of landing the first PSA 10. It was cracked and sent to SGC to get the Gem Mint grade. When it sold it went for just over $100 more than the PSA 9. Why? Because it is a PSA 9 sitting in an SGC 98 case. Examples like this destroy your case.

There are numerous comments over the years about SGC being more lenient on centering than PSA. BGS having the four sub graded scoring system where a 9 corner subgrade with three 9.5's has no chance to cross over in or out of the holder to PSA. Once again there is wayyyy too many examples that show that third party grading isn't perfect and that one companies grade may be different than another.

One of the primary reasons that many cards sell for a big spread is dealers in so many cases will pay a one grade discount on SGC graded cards. Why? Because the market has built the expectation that they are over graded vs. PSA. Is this true? In some cases yes and in other cases no but enough times that the risk reward analysis points to not paying an equal value.

If cards were graded by computers and we could prove that there was virtually no variance in grading and then they didn't cross over perhaps you might be on to something but with all of these scenarios I have laid out there is absolutely without question no case here.

[benjulmag]

Originally Posted by Dpeck100

There is absolutely no case here that can be brought against grading companies and I am quite surprised it is even being discussed in a serious matter as if one would ever have a legit chance of moving forward with any level of success.

Under no circumstances can anyone prove the motives of a grading company when it comes to analyzing cards in other companies holders.

I respectfully disagree with this view. To be clear, I am not saying that if A were to go after B in this instance, A could satisfy its burden of proof. But I can think of a way A could go about trying to do so that if successful could shift the burden of proof to B to establish that it did not have improper motives in its refusal to cross over.

Suppose A were to take 10,000 good candidates of A-slabbed cards for crossover, and only 8 cross over. A then takes the 9,992 that did not cross over out of the slab and submit them raw. 8,895 come back crossed over, and 4,583 of those at higher grades. I believe that if A was to submit such evidence, B would then have the burden to come up with a explanation to explain this. A far-fetched fact pattern, perhaps. But the story I recounted about the 50 out of 50 non-crossed cards being crossed over when resubmitted raw was told to me by a source I regard as credible. And I have heard other stories, though not as egregious. So while perhaps A has an uphill climb, for me at least I do not regard it as insurmountable.

My ire at this situation arises because B says that it objectively evaluates all crossover submissions, and that submitting it raw will make no difference. And when they refuse the crossover, they might tell you something untrue about your card. If B wants to have a blanket policy of refusing to cross over A's cards, then go ahead and announce it. That would be perfectly lawful and I would have no cause to complain. But don't go about saying you are doing one thing, when in reality you are doing something else.

[Dpeck100]

Originally Posted by benjulmag

I respectfully disagree with this view. To be clear, I am not saying that if A were to go after B in this instance, A could satisfy its burden of proof. But I can think of a way A could go about trying to do so that if successful could shift the burden of proof to B to establish that it did not have improper motives in its refusal to cross over.

Suppose A were to take 10,000 good candidates of A-slabbed cards for crossover, and only 8 cross over. A then takes the 9,992 that did not cross over out of the slab and submit them raw. 8,895 come back crossed over, and 4,583 of those at higher grades. I believe that if A was to submit such evidence, B would then have the burden to come up with a explanation to explain this. A far-fetched fact pattern, perhaps. But the story I recounted about the 50 out of 50 non-crossed cards being crossed over when resubmitted raw was told to me by a source I regard as credible. And I have heard other stories, though not as egregious. So while perhaps A has an uphill climb, for me at least I do not regard it as insurmountable.

My ire at this situation arises because B says that it objectively evaluates all crossover submissions, and that submitting it raw will make no difference. And when they refuse the crossover, they might tell you something untrue about your card. If B wants to have a blanket policy of refusing to cross over A's cards, then go ahead and announce it. That would be perfectly lawful and I would have no cause to complain. But don't go about saying you are doing one thing, when in reality you are doing something else.

I just gave you numerous examples of cards going down in grade from BGS to PSA out of the holder.

In your argument they should have crossed over but because they were in another third party grading companies holder they didn't. Instead they were over graded by BGS.

One of the main arguments against grading is consistency. This is a an argument within firms and so if at times the same company isn't consistent how on earth can you prove a standard? You can't.

If you are considering trying this case give your money to a good charity or something because otherwise all you are doing is lighting it on fire.

[benjulmag]

Originally Posted by Dpeck100

If you are considering trying this case give your money to a good charity or something because otherwise all you are doing is lighting it on fire.

David, I have no plans to try this case. I have no horse in this race other than my concern about the hobby and my desire to initiate discussion about things I see going on that I don't think are kosher.

This issue is merely a subset of a myriad of other issues discussed on this Board. As someone who goes back to the 1960's and sees what it going on with blatantly altered cards receiving grades, ridiculous price differentials between half grades for differences that exist only because some 30-year old grader with little hobby experience says exists, and even if it does is based on some totally subjective determination of grading, I feel the need to speak out and try to stimulate provocative discussion that could be an impetus for change.

I respect the views of all people who in a civil manner disagree with what I say, and in a number of instances upon further reflection I have shifted my views. That is what I like about this Board. But I have real concerns much of what we are seeing is a house of cards (pun intended) ready to fall, and I think it is constructive to raise awareness of these issues.

[Peter_Spaeth]

I guess the question you have to ask is, why are people willing to pay those price differentials for an arbitrary half grade difference? In some cases I think the answer is almost circular -- because the market says they're worth more. Sort of like in the old days, cards were worth what Beckett said they were worth, despite its claim that it was merely reflecting prices not determining them. Purely from a collecting standpoint, I'm not sure.

And adding to the element of arbitrariness are all the crackouts, bumps, etc. etc. So many cards go through different grades before landing in their current holder.

Plus, and I couldn't prove it, or it would cost me a lot to do so, but I have a strong suspicion all submitters are not equal -- or some are more equal than others. (I've always been tempted to buy say 250 random 10s from a certain seller and resubmit them myself and post the results.)

[Dpeck100]

Originally Posted by benjulmag

David, I have no plans to try this case. I have no horse in this race other than my concern about the hobby and my desire to initiate discussion about things I see going on that I don't think are kosher.

This issue is merely a subset of a myriad of other issues discussed on this Board. As someone who goes back to the 1960's and sees what it going on with blatantly altered cards receiving grades, ridiculous price differentials between half grades for differences that exist only because some 30-year old grader with little hobby experience says exists, and even if it does is based on some totally subjective determination of grading, I feel the need to speak out and try to stimulate provocative discussion that could be an impetus for change.

I respect the views of all people who in a civil manner disagree with what I say, and in a number of instances upon further reflection I have shifted my views. That is what I like about this Board. But I have real concerns much of what we are seeing is a house of cards (pun intended) ready to fall, and I think it is constructive to raise awareness of these issues.

There may be some bias on PSA's part but proving it using cross over data will be impossible. I understand your concern but when the discussion moves to anti trust lawsuits is where it goes from productive to something other than that.

I think what you are missing is that many cards that are submitted to third party grading firms change grades on a second or third trip so this same argument can be used to defend against your thesis.

In 2011 I got a real eye opener when it came to grading. There was a mid 50's Topps card that was a PSA 8 in a Rick Probstein auction that went for $40 something dollars. A month or two later the same exact card showed back up in a Rick Probstein auction and was now a PSA 10 and went for $4,000+. I was honestly outraged. How could this happen? I emailed Joe Orlando with my concern thinking he would be shocked too and really want to know and he wrote back asking if I would like to talk about it. We spoke the next day and he smartened me up real quick and explained that there were lots of players in the market that buy what they think are under graded cards and send them in for review, crack and resub, and also that the graders aren't perfect and are only human and that one may see something another doesn't or value it differently when rendering a grade. It became very clear to me then that third party grading isn't a perfect science.

A lot of cards that are in PSA 10 holders were once in a PSA 9 holder. Two of the cards I have spent the most on were bumped from a 9 to a 10. Once more showing that within the same company they have graders that might not agree on the grade. If they can't agree within a company, on how earth can one determine what the exact grade of the cross over should be? Just because SGC says it is X doesn't mean it is X in the eyes of another grader.

One of these cards was submitted and received a PSA 9. It was cracked and once more received a PSA 9. The consignor auctioned it off through PWCC and won their card back via the snipe shill bid that I discuss on other forums as the preferred method of shilling. It was then sent back to PSA for review and was finally awarded the 10 and then I paid the person nearly five times as much for it. When things like this happen you can argue against third party grading as a whole but proving in court in any capacity that PSA has set out to damage it's competition by not crossing over cards all of the time at equal grades is impossible.

The market share differences are so large that they legitimately do not see either SGC or BGS as a real threat. There is no doubt that the spread in prices has caused PSA to gain more submissions but this is a kind of like a chicken or the egg argument. Which came first? The reality is the market share divergence started in the mid 2000's and saw BGS lose 30%+ of the market to PSA. The battle was won over ten years ago so the market we see today is just a reflection of that. There are more collectors who want a PSA graded card and so lots of cards that have been graded prior attempt to get moved to PSA.

I think a better question to ask is why are these people trying to cross over cards? The answer in most cases is money. In my case early on it was uniformity but at this point it would honestly be about the economics of it. If there were more examples of cards being cracked out and submitted raw and receiving either equal or higher grades you would see an increase in the demand for SGC graded cards but this isn't happening. If it was this would perhaps validate some of your concerns but there just isn't the evidence.

A comment just in the past hour showed a cross over submission. A few equal grades but mostly lower. Had the submitter asked for straight cross overs many would have been returned in card savers and PSA would have kept his money but instead he was realistic and they came back in holders.

[glchen]

Here is a crossover submission that I did recently. For this crossover, I put the minimum grade as ANY. That is, as long as PSA deemed the card Authentic, I wanted it holdered in a PSA holder. (This was for the new PSA Jumbo holders.) None of the cards were cracked out, and all went to PSA in their holders.

(1) 1921 Pathe Freres Phonograph Co. Babe Ruth

Went from SGC Authentic to PSA Authentic

(2) 1935 Wheaties-Series 1 Hand Cut Lou Gehrig

Went from SGC 35/2.5 to PSA 2

(3) 1936 R311 New York Yankees Glossy

Went from SGC 40/3 to PSA 3

(4) 1936 R311 American League All-Stars Glossy

Went from SGC 40/3 to PSA 3


(5) 1920 W529-8 i.f.s. panel


Went from BGS (Beckett) Authentic to PSA Authentic

(6) 1927 Sporting News Supplements M101-7 Babe Ruth Ad Back-Red

Went from BGS (Beckett) Authentic to PSA Authentic

(7) 1927 Sporting News Supplements M101-7 Babe Ruth

Went from BGS (Beckett) 4 to PSA 2.5

(8) 1934 R310 Butterfinger Babe Ruth

Went from BGS (Beckett) 5 to PSA 1.5

(9) 1934 R310 Butterfinger Lou Gehrig

Went from BGS (Beckett) 5 to PSA 3


(10) 1934 Goudey Premiums R309-1 American League All-Stars

Went from BGS (Beckett) 5 to PSA 5

(11) 1928 W565 Uncut Sheet / Gehrig

Went for BGS (Beckett) 3 to PSA 2

So sure, I wanted some cards to have gotten better grades in their PSA holders. However, I could still understand why they got the grades they got, so I'm fine with that.

[swarmee]

Was #8 due to a pinhole that Beckett missed?

[glchen]

Originally Posted by swarmee

Was #8 due to a pinhole that Beckett missed?

Small tear on the edge. It's a pretty fragile paper stock.