Collectors (PSA) Acquired SGC

[Jeremy102175]

Originally Posted by ValKehl

Is this merger something that the anti-monopoly lawyers are likely to pursue?

I think for the merger to violate anti-trust laws a party would need to prove that the merger would make it impossible to compete in the market. Companies like Beckett and CGC will have a tough time making that case since they probably won't go bankrupt as a result of the merger. Consumers already have limited choices for quality grading companies though so this really sucks for collectors and nobody can do much about it.

[Peter_Spaeth]

Originally Posted by Jeremy102175

I think for the merger to violate anti-trust laws a party would need to prove that the merger would make it impossible to compete in the market. Companies like Beckett and CGC will have a tough time making that case since they probably won't go bankrupt as a result of the merger. Consumers already have limited choices for quality grading companies though so this really sucks for collectors and nobody can do much about it.

Actually, the standard is that the merger has to threaten to substantially lessen competition or tend to create a monopoly. It doesn't have to make it impossible to compete. Section 7 of the Clayton Act.

[raulus]

Originally Posted by Peter_Spaeth

Actually, the standard is that the merger has to threaten to substantially lessen competition or tend to create a monopoly. It doesn't have to make it impossible to compete. Section 7 of the Clayton Act.

Combined company will have what? 70% of grading by volume? And if we're just looking at baseball, probably closer to 100% of prewar and 90% of postwar vintage?

[Peter_Spaeth]

Originally Posted by raulus

Combined company will have what? 70% of grading by volume? And if we're just looking at baseball, probably closer to 100% of prewar and 90% of postwar vintage?

PSA may already have been a monopoly. And given PSA's already huge market share and SGC's small share, change in market concentration may not be that great as a result of the deal. For a quick test add up the sum of the squares of their market shares before and after. This is called the HHI Index and is one tool used by the government. It's been a while since I've done this so would need to remind myself how to interpret the results. You also have to consider entry barriers not just existing market structure.