Fanatics buys PWCC

[raulus]

Originally Posted by BobC

Or what about TPG contingent grading fees based on cards values? In supposedly providing a completely unbiased and equal service to ALL submitters, it should take approximately the exact same amount of time and efforts to grade and slab a 1952 Topps Mickey Mantle card as it does for say a common '52 Topps card from the low series. So why the huge difference in grading fees? This is an absolutely inexcusable, direct bias and conflict of interest on the part of the TPGs, yet the hobby community forgives and allows it to happen anyway.

Bob: While you might pooh-pooh the notion that it's meaningful, PSA does offer faster turnaround time at the higher grading price points. So the upcharge also delivers faster service. And for a TPG with turnaround measured in multiple months at the lower price points, faster service isn't nothing.

Of course, there's room to debate whether that faster service is really commensurate with the upcharge.

As an added bonus, many of the service level price points cover value ranges, so if you happen to be right on the cusp of bumping into the next highest range, then your grading costs could double, for example, simply by going from $24,999 to $25,001 in value. I guess the good news from my perspective is that I've yet to see PSA attempt to get cute with it by bumping me up if I'm just a little over the limit.

[BobC]

Originally Posted by raulus

Bob: While you might pooh-pooh the notion that it's meaningful, PSA does offer faster turnaround time at the higher grading price points. So the upcharge also delivers faster service. And for a TPG with turnaround measured in multiple months at the lower price points, faster service isn't nothing.

Of course, there's room to debate whether that faster service is really commensurate with the upcharge.

As an added bonus, many of the service level price points cover value ranges, so if you happen to be right on the cusp of bumping into the next highest range, then your grading costs could double, for example, simply by going from $24,999 to $25,001 in value. I guess the good news from my perspective is that I've yet to see PSA attempt to get cute with it by bumping me up if I'm just a little over the limit.

Nic,

Are you kidding me?

How long have you been a CPA now? You know as well as I that the ONLY thing that a CPA license allows you and I to do, that no one else can, is give our OPINION on a company's financial statements and how good they are. Not really much different than a TPG giving their OPINION on the condition of a card they grade. Both CPAs and TPGs are paid to give their honest, UNBIASED, and INDEPENDENT opinions on certain things they are looking at.

And as a CPA, you know we are supposed to be independent of the parties we give our opinions on, in both fact AND appearance. You also know as well as I do that as a CPA, if you go and charge any clients/customers a contingent fee, they will take our CPA license away as that is not allowed, as it may be deemed or viewed as a type of bias, conflict-of-interest, or lack of independence. (Fact AND appearance, remember!?!?!?)

TPGs charge contingent fees based on the value of a card they grade, correct? And I'm not talking about different service levels. In fact, I don't know where (or even how) you got the idea I was making any reference to service or service levels at all. Correct me if I'm wrong, but if I submit a '52 Topps Mantle card to a TPG for grading in what turns out to be say a 5 grade, along with a low series, '52 Topps common card that also ends up grading a similar 5, and ask for the exact same service level for both cards, I'm guessing I'm going to pay a hell of a lot more money in grading fees for my '52 Mantle because they charge more for grading it simply because it has a higher value. And this is even though they are supposedly providing the exact same services, work and effort as they are putting forth to opine on, grade, and slab my '52 Topps common card as they are for my '52 Topps Mantle, right? That is a contingent grading fee.......PERIOD!!! They are charging based solely on the value of the card they are giving nothing more than their opinion on when they are grading it. And in the case of that '52 Mantle card, even a slight change in the grade given can significantly increase (or decrease) the value of that card dramatically, which can also then impact what the TPG can then charge me for grading and giving their opinion on it. So, tell me, and everyone here on the forum, what is there really to stop a TPG grader from maybe bumping up the grade they give a card so that it results in a higher value, that they can then charge you more for grading? And before you even dare to say that no TPG would ever do that, fact AND appearance, remember!!! That contingent fee charge by TPGs is such a blatant, unquestionable conflict-of-interest and bias that it is truly laughable that apparently almost no one in the hobby calls them out for it, and we just blindly continue to let them get away with it and accept all their potentially tainted opinions on virtually every graded card that exists!!!

And if the TPGs have no problem giving their supposedly honest and unbiased opinions when such blatant bias and conflicts-of interest so clearly exist in what they do, it can only make one wonder what other areas of conflict or bias might they also be ignoring. For another example, I seem to remember that David Hall was known to have one of the greatest (if not THE greatest) T206 collections ever assembled. And if memory also serves, wasn't he also a major owner/officer of Collector's Universe for quite a few years, the same corporation that also just happens to own PSA? I'll give you three guesses as to which TPG Hall likely had all his T206 cards graded by, and the first two guesses don't count.

As a fellow CPA, you know as well as I do that if you, or the firm you work for, audits a company to opine on its financial statements, you and the people working on the audit can't also own a piece of the company that is being audited. That is a totally unallowable, biased, conflict-of-interest, and could potentially result in the loss of one's CPA license once again. I know in all my years working in public accounting, at least once every year I had to go through the checklist and let whoever I was working with/for know what stock holdings/business interests I, or my close family members, owned or had, so they could make sure they weren't doing any audit work requiring the giving of an opinion on a business/firm for which there was a conflict-of-interest because I or someone else at the firm owned or was otherwise somehow directly associated with a company we were hired and paid to audit and opine on. Once again, a CPA/CPA firm has to have and maintain a totally independent and unbiased relationship with any company/client they provide their audit/opinion servicers for, in both fact AND appearance. So, what does that say about people like David Hall, Nat Turner, James Beckett, or David Forman, if they ever went and had cards they, or family members, owned, and had them graded by the TPG companies they owned/operated at the same time?

This is what I'm talking about. Not faster services or different service levels.

And your last comment about you personally not seeing PSA ever getting "cute" with you and their valuation/grading process, potentially resulting in you being charged a higher grading fee, doesn't mean the potential still doesn't exist. Independent and unbiased in fact AND appearance, remember that from your own profession. And since TPGs do nothing but give their opinions, similar to what CPAs do, I would hope that one day they start to be held to similar, honorable standards, like CPAs as well. The fact that the hobby community has let TPGs, and the rest of the major players in the hobby industry, get away with this continuing non-independent, biased, and completely filled with conflicts-of-interest crap for decades now, is truly sad, and in my opinion, almost downright criminal on so many levels.

[Peter_Spaeth]

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

[Peter_Spaeth]

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.

[G1911]

Originally Posted by Peter_Spaeth

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.

[Peter_Spaeth]

Originally Posted by G1911

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.

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.

[bnorth]

Originally Posted by Peter_Spaeth

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.

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

[Exhibitman]

Originally Posted by Peter_Spaeth

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.

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.

[BobC]

Originally Posted by Peter_Spaeth

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.

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........................

[raulus]

Originally Posted by BobC

Nic,

Are you kidding me?

How long have you been a CPA now? You know as well as I that the ONLY thing that a CPA license allows you and I to do, that no one else can, is give our OPINION on a company's financial statements and how good they are. Not really much different than a TPG giving their OPINION on the condition of a card they grade. Both CPAs and TPGs are paid to give their honest, UNBIASED, and INDEPENDENT opinions on certain things they are looking at.

And as a CPA, you know we are supposed to be independent of the parties we give our opinions on, in both fact AND appearance. You also know as well as I do that as a CPA, if you go and charge any clients/customers a contingent fee, they will take our CPA license away as that is not allowed, as it may be deemed or viewed as a type of bias, conflict-of-interest, or lack of independence. (Fact AND appearance, remember!?!?!?)

TPGs charge contingent fees based on the value of a card they grade, correct? And I'm not talking about different service levels. In fact, I don't know where (or even how) you got the idea I was making any reference to service or service levels at all. Correct me if I'm wrong, but if I submit a '52 Topps Mantle card to a TPG for grading in what turns out to be say a 5 grade, along with a low series, '52 Topps common card that also ends up grading a similar 5, and ask for the exact same service level for both cards, I'm guessing I'm going to pay a hell of a lot more money in grading fees for my '52 Mantle because they charge more for grading it simply because it has a higher value. And this is even though they are supposedly providing the exact same services, work and effort as they are putting forth to opine on, grade, and slab my '52 Topps common card as they are for my '52 Topps Mantle, right? That is a contingent grading fee.......PERIOD!!! They are charging based solely on the value of the card they are giving nothing more than their opinion on when they are grading it. And in the case of that '52 Mantle card, even a slight change in the grade given can significantly increase (or decrease) the value of that card dramatically, which can also then impact what the TPG can then charge me for grading and giving their opinion on it. So, tell me, and everyone here on the forum, what is there really to stop a TPG grader from maybe bumping up the grade they give a card so that it results in a higher value, that they can then charge you more for grading? And before you even dare to say that no TPG would ever do that, fact AND appearance, remember!!! That contingent fee charge by TPGs is such a blatant, unquestionable conflict-of-interest and bias that it is truly laughable that apparently almost no one in the hobby calls them out for it, and we just blindly continue to let them get away with it and accept all their potentially tainted opinions on virtually every graded card that exists!!!

And if the TPGs have no problem giving their supposedly honest and unbiased opinions when such blatant bias and conflicts-of interest so clearly exist in what they do, it can only make one wonder what other areas of conflict or bias might they also be ignoring. For another example, I seem to remember that David Hall was known to have one of the greatest (if not THE greatest) T206 collections ever assembled. And if memory also serves, wasn't he also a major owner/officer of Collector's Universe for quite a few years, the same corporation that also just happens to own PSA? I'll give you three guesses as to which TPG Hall likely had all his T206 cards graded by, and the first two guesses don't count.

As a fellow CPA, you know as well as I do that if you, or the firm you work for, audits a company to opine on its financial statements, you and the people working on the audit can't also own a piece of the company that is being audited. That is a totally unallowable, biased, conflict-of-interest, and could potentially result in the loss of one's CPA license once again. I know in all my years working in public accounting, at least once every year I had to go through the checklist and let whoever I was working with/for know what stock holdings/business interests I, or my close family members, owned or had, so they could make sure they weren't doing any audit work requiring the giving of an opinion on a business/firm for which there was a conflict-of-interest because I or someone else at the firm owned or was otherwise somehow directly associated with a company we were hired and paid to audit and opine on. Once again, a CPA/CPA firm has to have and maintain a totally independent and unbiased relationship with any company/client they provide their audit/opinion servicers for, in both fact AND appearance. So, what does that say about people like David Hall, Nat Turner, James Beckett, or David Forman, if they ever went and had cards they, or family members, owned, and had them graded by the TPG companies they owned/operated at the same time?

This is what I'm talking about. Not faster services or different service levels.

And your last comment about you personally not seeing PSA ever getting "cute" with you and their valuation/grading process, potentially resulting in you being charged a higher grading fee, doesn't mean the potential still doesn't exist. Independent and unbiased in fact AND appearance, remember that from your own profession. And since TPGs do nothing but give their opinions, similar to what CPAs do, I would hope that one day they start to be held to similar, honorable standards, like CPAs as well. The fact that the hobby community has let TPGs, and the rest of the major players in the hobby industry, get away with this continuing non-independent, biased, and completely filled with conflicts-of-interest crap for decades now, is truly sad, and in my opinion, almost downright criminal on so many levels.

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.

[BobC]

Originally Posted by raulus

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.

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.

[Peter_Spaeth]

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.

[Eric72]

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

[BobC]

Originally Posted by Eric72

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

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.

[Mark17]

Originally Posted by Eric72

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

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.

[BobC]

Originally Posted by Peter_Spaeth

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.

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.”

[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.

[Peter_Spaeth]

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

[G1911]

Originally Posted by Peter_Spaeth

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

97 is shorter than most of his posts

[raulus]

Originally Posted by Peter_Spaeth

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

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