FYI-CGC

[bronze]

http://www.collect.com/interest/article.asp?id=6666

 

 

 

[yertle]

Only Registered Users can view this content

 

Bah, I have to register to read the article.

[Bugaboo-migration]

Yeah........could you just cut and paste the article in here.

[fantastic_four]

What's the article about?

[Kevin Boyd]

Ok. To avoid problems I've deleted my cut and paste.

 

You should register to read it. Takes 5 seconds.

 

Kev

 

 

 

[Kevin Boyd]

Please 88q7398 ignore the 782y198 numbers.

 

Kev

[fantastic_four]

Of all the copyright infringement I've seen over the last few years, you copying and pasting that article here has the highest probability of the copyright owner calling you on it of any case I've seen. Krause is a BIG company, and their editors--or at least their friends and acquaintances--read these forums.

 

I'm not lecturing...I'm warning you to avoid trouble, or at least expect it if it comes. I give it an 80% chance you're fine.

[Kevin Boyd]

Good point.

 

It's been removed.

 

Kev

[fantastic_four]

Since I raised the topic, check out this threatening letter DC Comics sent to some guy who had scanned the interiors of some Golden Age Batman comics and posted them on his web site:

 

http://www.drynet.com/comics/vintage_DC.htm

 

Their main argument makes sense--people are less likely to buy their reprint compilation books if they're available on the web for free.

[Tomega]

 

Here is the article -

 

 

Slabs today, what tomorrow?

By Maggie Thompson

 

The presence of Internet sales, including auctions, has created a venue in which third-party grading, long discussed, began to flourish and even spread to several collecting fields by the end of the 1990s.

 

It started in coins …

 

 

The first collecting hobby in which third-party grading took root was coins, even before eBay. “The starting point,” Numismatic News Editor Dave Harper told CBG, “was the American Numismatic Association. It formed the American Numismatic Association Certification Service in the early 1970s to combat counterfeiting, and grading was added as a service after the new grading standards were adopted in 1977.

 

 

“The ANA sold ANACS to Amos Press in 1990; the ANA website is www.money.org, but ANACS now is a private grading service with a right to use the acronym but no right to use the original name.” PCGS was the first privately formed third-party grading service, emerging in 1986, and NGC followed less than a year later. By May 1997, after a decade of third-party grading of coins, NGC was grading more than 36,000 coins per month.

 

… and spread to cards …

 

 

By January 1999, not only were sportscards being graded, but more than 20 companies encapsulated cards. Sports Collectors Digest Senior Price Guide Analyst Bob Lemke wrote then, “It is a fact of life in today’s hobby market that not all slabbed cards are created equal. A card certified by Professional Sports Authenticator (PSA) will consistently sell for more than a card of nominally the same grade as certified by Certified Sports Authentication (CSA) or Sportscard Guaranty Company (SGC). Central to this truth is the fact PSA has, as this goes to press, slabbed very nearly one-half million cards — about 10 times the output of all other services combined.”

The SCD Certified Card Price Guide in which that analysis ran valued cards from PSA at the value shown in the guide; SGC “may trade at a slight discount from values shown” (and were expected to narrow the gap rapidly); and CSA at a 10-25% discount.

 

 

Moreover, those prices are now four years old. Lemke even printed a chart to show corresponding grades across the first three services, with a “Gem Mint” being a 10 from PSA and CSA and a 98 (on a scale of 100) from SGC — with the higher “Pristine” for SGC 100.

 

 

As time has gone on, trading-card evaluations have been complicated further by the number of services — to the point at which Certified Card Price Guide two years ago cover-featured the story “Gem Market Mess: All 10s Are Not Equal.” KP Sports Division Editorial Director Rocky Landsverk said, “For this reason, we no longer price graded cards. CCPG is shut down, and our hands are in the air. We gave up.”

 

 

For example, following sales of a number of “Gem Mint” 1989 Upper Deck Ken Griffey Jr. rookie cards, two years ago, CCPG found they’d been in the holders of seven different companies. “The prices realized on individual specimens ranged from $322 to $4,000. None but the most novice collector or investor will believe that a $322 card is equivalent to a $4,000 card just because a grading company says it should be,” wrote Landsverk at the time. “Unfortunately, there are many novices in the market today who are being misled by the industry’s failure to achieve anything resembling unified grading standards — or at least the hobby public’s perception that it cannot do so.”

 

… and even toys

 

 

Toy Shop’s Tom Bartsch wrote two years ago, “In toys, two companies have taken the initiative — Action Figure Authority and Diecast Grading Service. Each is in the early phases of development, having come on the scene in the past 10 months. However, the two companies feel the hobby is ready for this development and even feel it could jump-start recent stagnant sales.” Diecast Grading Service offers grading for Hot Wheels and Matchbox cars. Action Figure Authority President Charles Ware, whose company grades action figures, said, “One thing I like about my position is when the card graders came out and started having an influence was when the card market was absolutely terrible. They have actually helped it a lot. [They] brought money back into the market. I hope to do the same and make a business out of it at the same time.” Comics collectors may find his comments familiar ones.

 

Controversy in comics

 

 

 

The field of comic books is one in which controversy over grading has flared — and in which only one service has surfaced so far. In comics, the hobby is based on reading an issue. And a slabbed comic book cannot be read. Moreover, there can be hidden damage, because the copy has interior pages, all of which must be evaluated. Nevertheless, thanks in part to the reputation of its graders, Comics Guaranty LLC has had a business that expanded almost beyond its staffers’ ability to keep up with the volume. The firm is one of the Certified Collectibles Group of companies, consisting of Numismatic Guaranty Corporation of America (NGC), Sportscard Guaranty LLC (SGC), and now CGC. Its acceptance can be judged by the premium buyers have placed on slabbed items in top grades. A comic book graded 9.9 (out of 10.0) now sells for a median price of the Near Mint price plus 2,500% of that price (more than double the 1,181% of two years ago). That’s what confidence in buying can do (and how rare it is to find a truly Near Mint comic book).

 

 

Long-time fans point out that an emphasis on grading seems to have decreased concern with the content of the comic books inside the slabs. But even that reflects what has happened in other fields. KP Associated Sports Publisher Dean Listle said that in his field, “Collectors are buying the grading — not the card.”

 

Taking another look

 

 

In comics, consternation at the moment involves concern over the fact that a resubmitted collectible could receive a different grade at a different time, even from the same grader. That, too, is true elsewhere. At some large coin shows, there are grading services offering same-day service at the event, although the price is not cheap. Krause Publications Coins Market Analyst Tom Michael said, “A vest-pocket dealer can make his expenses at the show that way, gambling on a higher grade for a resubmitted coin — or one graded by a different service.” And Mark Grall of KP’s numismatic advertising sales staff told CBG, “That’s what a bunch of younger guys do: They sit at the grading table and, picking out 50-60 coins from dealers at the show, crack them out, speculating on getting better grades for them.”

 

 

Michael said, “The less-ambitious people find coins they consider undergraded, strike a deal, buy the coin, and sell the coin to someone else who will crack it out and resubmit it. They’re happy with a moderate ‘finder’s fee’ profit.” CGC Head Grader Steve Borock said CGC is not likely to grade at a show: “It takes much longer to grade a comic book than a card or coin; that’s why we’re not grading at shows right now. And the equipment and the holders are much bigger. At coin shows, same-day grading is a huge expense, but most people aren’t going to give us $1,000 a throw for same-day grading at the show. We might eventually do something like a restoration check on the floor — without a guarantee. (In coins, you can pay for a ‘non-binding opinion.’) We could do it, but we’d like to stay away from it, if we can.

 

But we’re a business. And, as with everything else, we listen to the community and, if there’s a good idea, we go with it.”

 

Competition

 

 

Someday, CGC will not be the only grading service in the comic-book world. Some services may specialize in specific aspects of collecting or offer added features (say, providing associated information in the capsule). Borock said, “If somebody wants to be profitable quickly, I don’t think they can take the time to count pages. I think the only reason CGC stayed around for the first year was that the parent company had a real commitment to making it work. It certainly didn’t make a profit for the first two years.”

 

 

But, once there are two grading services, Michael said, “One service will routinely bring higher prices for the same assigned grade. Dealers will know which service is likely to do so and submit accordingly. An annual price guide? No way: Prices will vary significantly, and key Silver Age comics will bring such big bucks that investors will trade in comics the way they trade in stocks: paying attention to weekly ebbs and flows.” He referred to the coins “Gray Sheet,” a newsletter that has added a “Blue Sheet,” Certified Coin Dealer, which estimates prices by coin, listing different prices for different grading services’ “identical” grades.

 

 

Or, if there are many grading services, there could be such confusion that some price guides won’t cover graded comics. (See Page 39 on trading cards.) “Eventually,” Michael (who also collects comic books for their content) said, “third-party grading will take the hobby away from your smaller fraternity and broaden into a much larger market — and it may not go the way you want it to go. Fans will be little voices in a huge forest.”

 

 

But Borock countered by noting the personality of people who make a career of grading comics: “If CGC closed down tomorrow, I’d still spend the same amount on comic books every day.

 

 

“I think comics people are a lot pickier about the field than people in some other hobbies. I truly believe that 95% of our hobby — if not more — don’t think of this as a commodity or an investment. We actually read comic books daily.” (He quickly interjected that he does not read the comics that have been submitted to CGC for grading.)

 

 

“It’s possible to open our holder, because we know people will read the comics. And, when we get together socially, we don’t talk about the business aspect of collecting, but about the stories, the history, and the art.”

 

Its happened before

 

What will happen in comics grading, judging from what’s happened in grading in other fields? CBG polled experts in those fields and came up with the following comments (some of which, those experts were not surprised to hear, have already happened in the comic-book field):

 

(1) Holders damage contents.

It happened in coins before slabbing but — because of that — is far less likely to happen in comics. This is one respect in which comics collecting has benefited from the fact that other fields have gone through the process. CGC uses inert plastic for storage within the case, and chances are excellent that no other grading service would use holders that would degrade the comics.

 

(2) Crack-outs are common.

It’s already happening, but it will become even more routine. Krause Publications Coins Market Analyst Tom Michael said he saw — and heard — it at coin shows between the mid-1980s and mid-1990s. “It was a THX sound effect around the dealers’ room,” he said. “The sound of coin holders being cracked open is like the sound you hear in a bar where patrons drop peanut shells on the floor and people walk on them. And it’s all around you. Dealers and customers are cracking open the holders and preparing the paperwork to resubmit the coins to services by the end of the show.”

Does CGC Head Grader Steve Borock, then, recognize a resubmitted comic book when it comes to his office? “Very rarely do I recognize it.” As he spoke to CBG, he was grading an issue of Mystery in Space. “Unless someone wrote, ‘Hey, Borock!’ on the cover, I wouldn’t recognize it when I saw it again.” CGC’s imaging process photographs a copy when it comes in, but many resubmissions come in without the earlier CGC tag. Even if it is resubmitted with the tag, the two are separated at the start of the process. “The grader doesn’t know it’s a resubmission,” Borock said. “And graders don’t have the same access to computers that the receiving and customer-service departments do. I can’t type in an invoice number to find out whose it is.”

 

(3) Graders offer prescreening.

It’s already happening, a filter CGC picked up from its sister company Numismatic Guaranty Corporation of America. As cited in CBG #1526, dealers provide CGC with long boxes of high-grade comics, which the service then culls for anything at a specified grade and above. Then the dealer pays for encapsulation and final grading of those top-rated items. (It’s one reason there are so many copies of 9.8 and above Origin #1, recent copies submitted shortly after they shipped and became “hot.”)

 

(4) Dealers are grading middlemen.

It’s already happening, although CGC does offer its services to individual collectors, as well, through the Collectors’ Society, a service of the Certified Collectibles Group, the umbrella company that includes CGC.

 

(5) Containers will be marketed.

It’s already happening for comics in CGC holders, although not at the level seen in some other fields. Containers designed for card displays are not a big item, but Michael spoke of velvet-lined coin cases. “Where there’s money,” he said, “there are always more ways to make money.”

 

(6) Counterfeiting is a threat.

In the trading-card field, the FBI has already charged one company in a scheme in which high-grade graded cards were replaced with lesser-grade ones in the cases labeled with the higher grade. It’s why grading firms try to make their sealed cases clearly show tampering, when it occurs, and CGC is working on a new label to help to discourage such counterfeiting.

 

(7) Restoration will be accepted.

In comics since the advent of third-party grading, manipulation of the original to make it look better has meant plunging sale prices. Even a tiny color dot of restoration can mean a lower price than if the item had not had that dot added. But the Numismatic Guaranty Corporation of America now advertises as a positive its “conserving” service, which involves cleaning and brightening the coin, removing the discoloration which has occurred to the metal naturally. Borock said CGC graders don’t consider pressing a comic book to remove a rolled spine to be restoration. “Nothing’s being taken out or added to the comic book.” He commented that it had been found that the comic books that had been stored in the middle of the piles of comics in the Mile High collection were more flat than those on the top, not because someone had used a device to flatten them.

What is even more to the point is that it is impossible to be sure that some form of pressing has not occurred. “Nobody wants us guessing,” Borock said. Concerning reports that one dealer has bought a pressing unit, Borock said, “Who cares? Instead of sending it out, they’ll do it themselves. The point remains that it is not restoration, per se. It doesn’t matter how it’s being done. Once again, I can’t guess; we’re not being paid to guess.”

In currency collecting, Michael said, such changes as cleaning and brightening have recently become acceptable, not considered defects or “doctoring,” and added, concerning comics, “Restoration won’t be bad.”

 

(8) Costs will go up — unless.

This is continuing to happen. Associated costs for the grading services are not cheap. (Think about such expenses as insurance for submitted material, the variety of “wells” required for the variety of comic-book sizes, the costs of developing tamper-proof seals, the equipment required to seal comics — and that’s before the company starts paying for super-specialized professionals). And, of course, companies are in business to make a profit.

Borock said, “All our vendors raised prices on us on such expenses as the plastic and the microchambers. And I can’t run a business without giving people raises once in a while.”

But in card grading, they’re going down because of #10, below.

 

(9) Low-grade prices will plummet.

This is especially happening for now with unslabbed copies: a major opportunity for those who want to read their comics, rather than place primary emphasis on investment.

 

(10) Grading services will compete.

This is the big one that has yet to happen in comics. At this point, Comics Guaranty LLC is the sole third-party grading and encapsulation service, but those who have studied other fields say they are sure there will be competition. When will that day come? CGC’s Borock said, “We’ve been hearing for the last two years that it’s coming. I would say that, within the next year, we might see some kind of competition. Any time something is successful, it breeds competition. It’s very expensive to grade comics, as opposed to coins and cards.”

 

 

[Hensley300]

great piece. I remember for some time now CI and Supapimp have been accurately predicting a down swing in the modern comic prices? We've seen their predictions come true for the most part on many moderns which a high premium was paid for the first few to get 9.8 and as more came along, the average selling price declined. Perhaps this may spread to bronze/silver age are more trade and as different grading companies grade differently?

[aardvark88]

Seems like Ablue was correct after all. Clean & press it the way to go. Scoop them up now for cheap, & later when collectors realize clean & pressed covers is NOT resto, the values will no longer be 75-80% off condition guide.

If u have a vintage collectible car, & u wash & wax it to return the outside to its original lustrous (glossy) condition, that is NOT resto.

[joe_collector]

I just read an article in a collector's magazine that predicted coin, card, comic, etc. grading services would not be around in 10 years, and made some pretty compelling arguments to that fact.

 

The basic problem is, in addition to investor apathy (over time), the constant frauds and grading scams, customer insecurity, and just basic economics, there is very little new material is coming out that will ever be profitable to encapsulate and resell. New sportscards and comics may not even be around in 10 years, making the prospects even worse.

 

It's kind of a Catch-22, and once grading companies turn coins, cards and comics into traded commodities, the big money stops caring about the content and just buys the grade. Older collectibles flourish while newer content flounders, and even though there are sufficient supplies of the older stuff, relying on that alone is not enough to keep any company in business.

 

We're already seeing this happen with CGC comics, as Modern submission prices have risen, while seller profits have taken a nose-dive for 1980 and newer CGC comics. Very interesting stuff, and I guess we'll see in 10 years.

[Aman619]

geeez--who couldnt see that prices for graded Modern comics would plummet once the census started filling up with double digit totals for the highest grades? If there are 50 copies of something in 9.6 or 9.8, I dont care how much demand there is (thats the answer I always hear as to why 50 copies is not too much...) that is no longer a rare collectible. Especially since 50 copies now means a potential existence of hundreds more yet to surface!!

[murph0]

No matter how many washes you give you car, after a while it's never going to have its original gloss.

I really can't stand this collectible car argument as most people who really collect cars don't actually drive them so it doesn't need to be washed anyways. It does get toweled off regularly to get rid of dust though.

 

Brian