The Sports Card Industry Is Having A Tech Revolution - PSA Forbes Article

[parkplace33]

Originally Posted by Lorewalker

A few things that stand out to me in that article are:

"...pushing its valuation to $4.3 billion. That represents a five-fold increase from the roughly $850 million acquisition price last February..."

Wondering where they base that valuation? Is that valuation based off of the 300 million in gross revenue? CU at the time of acquisition estimated 35 million for Q2 revenue and had over 30 million in Q1. Annualized it would be reasonable to project 150 mil in gross revenue. So did the board screw shareholders and approve a sale well below the value of the company? They had 13 million cards to be graded at the time of purchase. That is a huge Receivable.

The group may have paid 853 mil for the co but they also spent money after the acquisition buying other companies and expanding operations so the 5 fold-increase while an accurate statement does not paint the whole picture. Additionally there are operating costs that have increased substantially. I just wonder if they are as profitable at this time as they were prior to being taken private.

"...PSA now has more than 100 graders, up from 44 at the time of the acquisition and the 14 the division had for many years."

In order to get those 13 million cards graded it had to be done but how do you find 56 more qualified people to grade cards? How do you remain consistent with an operation that large? Not sure that you can. Card grading might not be neurosurgery but in just over a year they located 56 qualified graders?


"A 2019 scandal exposed corrupt collectors selling altered cards through the marketplace PWCC, many of which carried grades from PSA."

2019 scandal exposed corrupt collectors selling altered cards? Maybe it is semantics but the bulk of the dudes selling altered cards through PWCC, through their own ebay accounts, etc are not collectors but dealers. Dealers who PSA promoted or promotes and at the very least allowed to submit the bad material.

I noted those but also these:

On a single day in late March, the company received 660,000 cards. “We literally broke the USPS in Southern California,” Turner says. “They called us and said they couldn’t manifest the boxes. I think we rented school buses with security guards and drove to USPS to pick them up.”

Turner says he hopes to return to the normal submission process in the next few months, but all involved concede that the days of $12 service fees for low-end cards are over.

Then there’s the competition. SGC has taken advantage of PSA’s higher prices, particularly on the lower end, and smaller grading services like CSG and HGA are hoping to capitalize as well. New entrants are joining them. A year ago, Dallas Card Investors happily functioned as a bulk submitter, essentially working as a middleman between collectors and PSA. Now, says owner Bradley Crenshaw, it’s pivoting its business to become a grader itself.

[Johnny630]

Originally Posted by parkplace33

I noted those but also these:

On a single day in late March, the company received 660,000 cards. “We literally broke the USPS in Southern California,” Turner says. “They called us and said they couldn’t manifest the boxes. I think we rented school buses with security guards and drove to USPS to pick them up.”

Turner says he hopes to return to the normal submission process in the next few months, but all involved concede that the days of $12 service fees for low-end cards are over.

Then there’s the competition. SGC has taken advantage of PSA’s higher prices, particularly on the lower end, and smaller grading services like CSG and HGA are hoping to capitalize as well. New entrants are joining them. A year ago, Dallas Card Investors happily functioned as a bulk submitter, essentially working as a middleman between collectors and PSA. Now, says owner Bradley Crenshaw, it’s pivoting its business to become a grader itself.

CSG and HGA were temporary band aids while PSA stopped taking submissions. PSA will continue to dominate only by a wider margin over their competitors.

[T205 GB]

So the snow ball of corruption continues under a different name. I feel honestly that PSA hired guys from the hobby that knew what subs they were dealing with. PSA may have not know their intentions upon hiring but there should have been flags raised when pre 70's cards are minting non stop. They gave their friends the best grades for kickbacks. I do not believe for one second that graders are unaware of whose cards they have. Pretty much says that in the article. How does one stay organized like that without identifying subs? I have the same sub # from the beginning so a friend could easily find my name or # and pull the sub for special care grading. I also watched a blatantly altered card be handed to PSA at a show, pre 18', and come back with a numerical grade. I said something and the lady turned her back on me and walked away. Proof enough they knew what was happening. More than happy to tell the feds who the card belonged to and what I witnessed but we all know they don't really care except to recoup funds for the rich who can afford to lawyer up without going broke.

Just honestly seems silly we all squawk about wanting a new grading service but the beast continues to get fed. All these guys here saying they are only collectors so grading is strictly for protection but won't buy a new service because of devaluation. So what is it then? Asinine thinking the plastic is worth that much more than the card but this hobby is all about how much plastic you have. So where is the value? Is it the actual card or the plastic holder? If you value the holder then remove the cards for someone who actually collects and keep that valuable plastic you stupidly paid for. I get grief all the time at shows for selling raw. I just tell them to spend their own money if they want a piece of plastic and an opinion so bad. I have graded 3 cards since 2012 and the rest reside raw or purchased for near the same amount as a raw example. I love this hobby but its very hypocritical. You alter cards and your no good/shunned, but those same guys that judge are the same that buy from frauds in the hobby and feed the beast.

I have lost more than I will ever recoup trying to set up a process to grade accurately and fairly each time. I came up with so many ideas and watched as my ideas were blatantly ripped off with not a thank you ever said. I hope I live long enough to buy all them out so I can fire and close the whole thing down. Make them worthless and establish a new era of card grading that actually has integrity and morals. An accurate registry and as transparent as clear glass. Special thin holders that are not breakable, UV proof, fire retardant, and are sealed specially to forever protect the card inside. You can smash it with a hammer both on the flat and along the sides and you are not able to break it open. Cards must be specially removed. Messed up part is I would have bent over backwards to help one company had they not stole. I wonder how much market share they would have now had they did the right thing and just approached me to work with them. It would have cost way less than they spent trying to figure it out. Best part was the egg in their face when it backfired like a quadrajunk carb on a 305.

[BobC]

Originally Posted by parkplace33

I noted those but also these:

On a single day in late March, the company received 660,000 cards. “We literally broke the USPS in Southern California,” Turner says. “They called us and said they couldn’t manifest the boxes. I think we rented school buses with security guards and drove to USPS to pick them up.”

Turner says he hopes to return to the normal submission process in the next few months, but all involved concede that the days of $12 service fees for low-end cards are over.

Then there’s the competition. SGC has taken advantage of PSA’s higher prices, particularly on the lower end, and smaller grading services like CSG and HGA are hoping to capitalize as well. New entrants are joining them. A year ago, Dallas Card Investors happily functioned as a bulk submitter, essentially working as a middleman between collectors and PSA. Now, says owner Bradley Crenshaw, it’s pivoting its business to become a grader itself.

I wouldn't be so quick to just summarily dismiss CSG as a small, filling in the gap, card grading company. The overall company they are part of is well known worldwide I understand for their other grading services. So, this new venture of theirs into card grading is no fly-by-night operation. Plus, as I understand it, they are going to compete with PSA in that they have a registry set up, unlike SGC, Beckett, or any of the other small, fringe grading services out there. Plus, don't forget their rather slick move in partnering with Ebay to offer their new authentication service. I can easily see CSG using that affiliation as a possible springboard to generate more business in the future. For now, all they need do is maintain and provide a consistent, accurate, timely, and reasonably priced authentication and grading service that competes with the other TPGs, especially against PSA as to timeliness and prica, and over time more and more people in the hobby will become more familiar and trusting of them. In the long run, it will behoove PSA to get their pricing and turnaround times down closer to where their competition is.

[mrreality68]

interesting read and new blood is always good