Collectors (PSA) Acquired SGC

[Yoda]

Originally Posted by Peter_Spaeth

It would not surprise me at all to see a ton of SGC cards for sale soon as guys calculate it's better to get what they can now rather than take the crossover risk or wait for the brand to be further devalued.

Great, bring it on! What a buying feast for those that consider the card primary over the flip.

[raulus]

Originally Posted by Yoda

Great, bring it on! What a buying feast for those that consider the card primary over the flip.

Yoda’s approach will certainly appeal to part of the collecting base. And certainly I find that notion to be attractive as well.

But if some of the fears expressed here come to fruition, in some ways it exposes the potential fragility of current valuations for high grade stuff, and not just for SGC, but for those of us with our collections in PSA slabs as well.

Recalls to mind some of the recent marveling we’ve done at a PSA 9 slabs selling for 100x the PSA 8 slabs for some vintage pieces of common players.

The whole thing smacks of the emperor whose clothing wasn’t as fine as those around him suggested it was. Maybe Jingram was right all along…

[Lorewalker]

It is not just because of PSA's registry that their cards, for the most part, sell for a premium over an SGC counterpart but also that when buying PSA you are buying into a much larger company. SGC was owned by one guy...some of whom claim he has a bad rep. Maybe this hurt their resale value or peoples' desire to invest in those holders, whether or not they did a better job or not?

The owner of SGC made a great business decision for himself. It is too bad for all of the collectors that the buyer of SGC was a competitor who will, sooner than later, eliminate the brand. At the end of the day, collectors who stuck with SGC were inventing in the owner, not the company.

[The Detroit Collector]

I was looking through some cards and noticed I have some graded by Sports Collectors Digest. A reputable company back in the day that got bought out as well. I don't see SCD slabs anymore these days, but if I did, I doubt you would have to pay the same price as a PSA or SGC graded version.
Point I am trying to make is, as some have mentioned, if SGC is no longer a company in the future, I can see the value of low tier SGC slabbed cards dropping.

[Fred]

Originally Posted by The Detroit Collector

I was looking through some cards and noticed I have some graded by Sports Collectors Digest. A reputable company back in the day that got bought out as well. I don't see SCD slabs anymore these days, but if I did, I doubt you would have to pay the same price as a PSA or SGC graded version.
Point I am trying to make is, as some have mentioned, if SGC is no longer a company in the future, I can see the value of low tier SGC slabbed cards dropping.

If I see an SCD graded card, I put a premium on it over PSA (I'm sure nobody else does) Unfortunately SCD didn't grade many cards. I'll always keep the few SCD graded cards that I own encapsulated in the SCD slabs. If for nothing else, for historical collecting significance. Who knows, maybe someday some knuckleheads will put a value on the plastic and flip ROI baby.. (insert vomit emoji)...

[Exhibitman]

Originally Posted by The Detroit Collector

I was looking through some cards and noticed I have some graded by Sports Collectors Digest. A reputable company back in the day that got bought out as well. I don't see SCD slabs anymore these days, but if I did, I doubt you would have to pay the same price as a PSA or SGC graded version.

You don't, thankfully. I look for the red logo ones.

[cgjackson222]

Originally Posted by Lorewalker

It is not just because of PSA's It is too bad for all of the collectors that the buyer of SGC was a competitor who will, sooner than later, eliminate the brand. At the end of the day, collectors who stuck with SGC were inventing in the owner, not the company.

I am not sure that SGC being eliminated is a foregone conclusion. I invest in cards, not holders or owners of TPGs.

[Lorewalker]

Originally Posted by cgjackson222

I am not sure that SGC being eliminated is a foregone conclusion. I invest in cards, not holders or owners of TPGs.

I am not good with a crystal ball and I hope you are right. I have far more SGC cards in my collection than PSA. Each of us...or at least most of us...are simply guessing at what is going to happen.

If SGC ceases to exist then those of us who stayed loyal to SGC invested in the owner and whether or not you or I see those SGC cards as being worth less once the brand is gone, what you and I think is meaningless.

Anything in an SGC holder at some point will be seen/construed/assumed to being unworthy of crossing either because the owner did not want to take a 2 grade point hit or because PSA was going to put the card in an Auth holder. The perception will be more important than the reality.

[cgjackson222]

I have no idea what will happen to SGC, but I am not writing them off just yet.

[Directly]

Sold my SGC Cobb and SGC Cap Anson just last couple weeks for good $$$$--not sure if either would have crossed over with same grade, the Anson possibly just Authentic-Lucky timing if prices collapse-guess we'll wait and see.

[JollyElm]

One thing is certain from reading this thread:
The answer to every single question asked about this acquisition will be an absolutely guaranteed 100% NO, while also being an absolutely guaranteed 100% YES.

[Snowman]

Much of what I've read from people both here and on various other platforms seems to be rooted in either wishful thinking or out of fear of the worst-case scenarios. Not many people seem to be putting themselves in Nat's shoes or in SGC's shoes when trying to predict what is most likely to happen.

I love game theory, and I usually try to view these sorts of things through that lens. So, what do we know?

We know that any PR message put out right now by either company means nothing about their long-term vision. They simply have to state that nothing will change and that it will be business as usual, regardless of their true intentions. But that doesn't mean their true intentions can't be to maintain both brands indefinitely. To solve that riddle, we can make some assumptions based on what we know and assume that Nat et al will act rationally.

We know PSA wants more quality vintage graders. SGC has them. Bringing them into the fold is a strong value add. We also know that PSA wants to continue to expand its footprint physically. Adding a location in FL makes a lot of sense for them. We also know that SGC has been growing significantly over the past couple years. Their growth rate is many multiples of PSAs. Had that trend continued, and had they been acquired by someone with more financial backing like Fanatics or CGC, they might have become a serious threat to PSA. So Collectors buying them out before someone else caps that threat at the knees.

But just because they bought out SGC doesn't mean they did so just to shut down competition and steal their graders (who would certainly become disgruntled employees if that were the case). It just doesn't make sense financially.

Here's what I think will happen. I think Collectors does in fact want to allow SGC to continue to operate for the foreseeable future. Not because they said so, but because it makes the most sense financially. SGC has a loyal vintage following, and PSA doesn't exactly win them over if they were to buy them out and shut it down. That would risk an army of disgruntled SGC employees all jumping ship and just moving over to CGC where they'd be welcomed with open arms. News would spread quickly that CGC is the new SGC and the vintage community would follow them over in an instant. Nat & company aren't stupid. They are fully aware of these risks. They want to keep SGC customers happy and they want to keep SGC employees happy. That said, most of the growth that SGC has experienced came from the ultra-modern side of the hobby. Those submitters are not loyal to SGC. They don't care about the cards at all. They just want to flip their cards as quickly as possible and get 10s on them. SGC is often their best option because of the turnaround times and lower grading fees. If SGC were to shut down, most of that business likely would transfer over to PSA - especially if they are able to improve their turnaround times by then.

I suspect PSA's long-term intentions are to keep SGC up and running for as long as it makes sense. If the market continues to show strong demand for SGC's services, then they'll continue to offer them. If the market turns its back on SGC as a result of the merger, then they'll be more likely to let the brand die. I doubt they have concrete long-term plans with everything completely ironed out at this point. I think what we'll see after a couple of years is a joint PSA/SGC office in FL where both brands operate independently but with shared resources; technical, grading, and operations. PSA will likely take advantage of the vintage grading experts at SGC and put them to work on both PSA and SGC submissions. FL will become their vintage hub. All bulk vintage submissions will likely be sent there. They'll allow anyone who wants to move from CA to FL to do so, and vice versa. But they won't force any of them to. This could be a good thing for us as collectors. The SGC graders have pride in their work, and they're better at grading vintage cards than most PSA vintage graders, and they know it. PSA knows it as well. These guys will eventually be grading our PSA cards. That will result in more consistent and accurate vintage grades at PSA. It will also likely result in more SGC slabs crossing over at a higher rate as they have pride in those slabs.

Turn-around times at SGC will likely slow as PSA shares resources at the FL office to balance out volumes across both brands. Grading fees (and their corresponding value thresholds) are likely to be slightly less favorable at SGC in the future, but not for a while.

I think it's premature to assume that the sky is falling. Getting rid of SGC completely just doesn't make a ton of sense for PSA. But putting them under the same roof in FL as PSA and creating a joint office does make a ton of sense. These guys are going to do whatever makes the most sense financially. And it doesn't make sense to spend $100M to acquire SGC only to shut them down, steal their graders, and piss off all their customers. That's just not going to happen.

That said, if SGC does eventually go away, it will have a measurable effect on their slab values in the limit. At first, values will remain fairly close to where they are now as the market trusts their grades and people will continue to pay top dollar for their cards because they'll have confidence that they will cross over to PSA (and I do believe they will cross over at a higher rate in the future when former SGC graders are the ones crossing them). But as time goes on and more and more of these cards get crossed over, there will eventually be a sentiment among collectors that the remaining SGC slabs that are still out there are less and less likely to cross. This sentiment will exist because it will be true. That will slowly devalue SGC slabs. But there will be a floor to how far they can fall. The market will always respect their grading, and ultimately, the cards inside are still what matters most.

[Rhotchkiss]

Originally Posted by Snowman

These guys are going to do whatever makes the most sense financially. And it doesn't make sense to spend $100M to acquire SGC only to shut them down, steal their graders, and piss off all their customers. That's just not going to happen.

Snowman, I will admit, I disagree with many of the things you post. However, I think your post above is well written, sensible, and likely accurate. This time, I agree with you completely, especially the part re-quoted above.

[cgjackson222]

I pretty much agree with everything that snowman/Travis just wrote.

Its a well-reasoned guess.

(You beat me to it Ryan)

[Snowman]

I think this does create a very real opportunity though for CGC. I really hope they are able to capitalize on it.