The Future of Golden Age comic book collecting post 2021: Blackstone, Promise and Beyond: The great unknown.
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Crystal Ball time here fellow board members and I hope you will add, extend, and give your opinion as to where we are headed in Golden Age collecting land...up up and above for the future. After, my God, 60 years of comic book collecting since buying  FF#1 off newsstand in 1961 we have come a long long way. But I can honestly say that 2021 is by far the most significant year in GA comic book collecting that I have participated with joy in. All is not 100% bright, but he is my guess, after 60 years years and I believe over 50 years or ago when I stated the Comic book collecting Clue for all Sacramento comic book collectors (see earlier posts for  Journey of a comic book collector for a copy of the clue flyer say circa 1965) we have a hit a milestone year which in 10/20 years from 2021 will be judged very historical.

 1- BLACKSTONE Buys CGC in 2021:

 Let me be clear here about two things. 1- when you control the company 50.1% or more you OWN it, you can at any time take existing shareholders and bleed them out through stock dilution. Now not every company who acquires it will, since the principal owners might actually direct or control the company and then just report to corporate ( Blackstone management) but at some point or whenever they want, they can wipe out anybody. A  fundamental rule  when it comes to civil litigation: whoever has the most money wins...eventially.  Blackstone has the money, a lot of it. It would be exceptionally unusual , probably impossible to get a sophisticated  company like Blackstone to grant "non-dilution" shares to the original stockholders...2- Blackstone does not invest $500 million if it does not thing its gonna make a Billion... or more with some of the best number crunchers in the company buying biz. So they own it...lock stock and barrel .

 Now we deal with the issue that Wall Street now controls a major GA comic book player, and is it that a good thing?  It is, 100% and why. Here we have a "Warren Buffet" type company betting half a billion dollars on the CG/SA comic book market and collectables market in general  PLUS putting further cash infusions into their purchase to get the "numbers" for their shareholders or investors, or Wall Street or whomever. I like the fact these guys know what they are doing and do not think that this end for "big investor money coming in to buy other players in our GA comic book world, this is just the beginning . It is like the old add, EF Hutton commercial with a 2021 variant .. When Blackstone makes a move..."people listen". The happiness guy alive today or yesterday is not the sellers of the CGC, LOL they are number 2. But Steve, our  the CGC competitor IF he got as part of his "sale" of the other company a stock option in that company or some type of retained ownership of his former  grading service because that company just became target #2 on the Wall Street investor hit list, especially if Blackstone turns its 500M investment into gold, heck they could even buy them.

 The future is clear for both  CGC and the other guy as I related in earlier posts over the last few years, the" other guy" was created for a" buy out" once they has established a significant market share by their competition. Where the miscalculation lied was that CGC had the market wrapped up on ultra high end sales of GA and SA books and they could not shake them out with a price reduction or quicker grading time. So, they went lateral and sold to another collectable  grading company and I am sure after sale today, that it looks really really great today the company that bought them for a bargain with hindsight , and look out..they could be then $400 Million future  buyout. The flip side of this is that no way will the competitor ever be able to outspend, outthink, or outdo Blackstone. These guys are the real deal, they put their money. where their month is and they make a profit overall. This insures CGC status at the #1 comic book grading company for the long term future.

 So that means for the time being that CGC is bulletproof from anyone else. That is not good thing but a great thing. The future and the company performance will determine whether it is a long term hold for Blackstone, or a revamp lipstick resell job. I believe, with this major Wall Street leap of faith in the collectables market, that it looks very good that we will have their management knowledge, expertise and expansion of CGC for a very long time. I am not saying their are not coming in wanting to make money, I am saying if the payoff each year gets better and better they do NOT have to sell, but reap the benefits as long as the return is above their average rate of minimum retention goals they have for their company and investors.

 I predict Blackstone will keep CGC for a very long time, and when they sell they will make a very very large profit. Even if they sell, for a very large price the new buyers will want keep the asset alive and well with that substantial of a new investment. When Blackstone throws the dice, they are not looking for say 10% or 20% long term return..no they do that probably on stock market trading alone, they are look at two of three times the roll amount, 1 Billion and probably more for the payout.

2- The Promise collection and record GA sales prices in general in 2021:

 I know a lot of us what to find the "golden Willy Wonka" easy single answer here. Well folks is not one, but a combination of economic and GA/SA comic book Wall Street/ investor recognition flamed by the greatest GA comic book OO pedigree collection coming to market in the last 30/40 years. That is it. Full acceptance that GASA  comic books have intrinsic value both in 2021 and in the foreseeable  future. That to a lot  people GA comic books are and will be in the future attractive widgets to invest in, like gold, coins and artwork. We are there now 2-21 with the greatest acceptance of that fact in the history of our Ga/SA comic book world. We will continue to see record GA/SA prices especially in the Upper or Ultra keys from this day forward for the next 20 years unless a meteor  hits the planet earth and gets us again like dinosaurs. Sure, there will be pauses in the next twenty years, some sideways, but overall look forGA CGC graded collectables to hold their own. The one good thing Cyptro currency has created is a generation  of NEW investors who will take a chance, gamble etc. The emergence of the Marvel and DC universe both on the movie screen as well as media platforms such as Disney/HBO Max on this new generation of new investors  is to EXPOSE this generation of  media drive  to this material and has thus in 2021 created the perfect storm here in out comic book collecting world. They do not know about stamps, and to some extent coins...but they know JLA directors cut premier on HBO/Max . 2020/21 and Avengers  thus as a result  this has been very favorable to the comic book world in general with the forced stay at home media driven investor.

 When great material like the Promise collection  hits the GA comic book market it infuses new energy., excitement , and new publicity even to non-collectors as mentioned in other post on the board. That is  great thing for everyone here on the form as long term collectors.

GA comic book collecting has grown up and matured into a full collecting body in its prime of life in 2021. Hitting on al cylinders.

In the past I have been afraid of the "widget" buyer in our great comic book world. With this Blackstone purchase, however I have changed my opinion to say I accept you in our world. Wall Street, widget buyer, pancake presser the world world.  I admit it creates  our GA even SA comic book world a more exciting and competitive place. Yes we do not know if our E-bay under bidder was "flipper" or even worse LOL a presser flipper...but so be it. I love our GA comic book and will do so until I take my last breath. I for one remember trying to convince the 99.9% of the outside back in the lates/ early 70's that comic books and especially GA comics were  much greater than the category that society had placed them in. In 2021 our GA comic book world is bigger,badder and who is to judge whether anyone can participate in it.

 Ga/SA books could are  artistic masterpieces and added with  superb stories in my opinion. They can  transport you back to a time when we were fighting the greatest evil man has know in history and which Captain American #1 so bravely put on the cover of the newsstands of America knocking it on the jaw or seeing Superman  race a train in Superman#3 

 Now a bigger, even better world can enjoy GA comic book collecting in 2021 and and my prediction for the future  GA/SA comic book world the is very very bright.

 

Edited by Mmehdy
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Mitch - I love your market prediction posts. 

I think this move will be far less sweeping and grandiose than you predicted. 

From a strictly business stand point, this was a no brainer for Blackstone.  CGC has a product with huge demand and they can't meet that demand, despite their best efforts to scale. 

An investor looks at that, CGCs position in the market and how they've taken action to diversify in the collectible space and sees a great opportunity to improve effecienicies and grow market share in new areas (cards).  

Blackstone will make them more efficient and continue to grow the brand and product. 

I think this is less an indication of where GA is going and more a comment on the sustainability of comics as an asset. Also it's about the growth potential of cards and Blackstone's ability to scale that business. 

Will this be a good thing collectors? I'm not sure. Over the next year I would expect improved TATs, an easier submission process, better quality control and an overall more efficient company. 

The key will be to streamline without hurting grading standards.  

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Ultimately, the question for Blackstone is going to be whether they believe having a reputation for high-quality, accurate and timely grading and slabbing of comic books, cards and other collectibles is important, or whether the primary goal is to maximize the income and profit from the CGC portfolio.  In response to the relatively recent explosion of items submitted for grading, CGC has been making a valiant attempt to "scale up" to meet the demand.  The biggest cost of most businesses is people - salaries and benefits.  In a business like this, however, you can't just hire anyone, and I think it's fair to say that the number of people who are well-qualified or experienced - or at least enough to be trained - in accurate grading of collectibles is relatively small.  If a large pool of "ready-to-grade" experts were available, the Company wouldn't have been advertising for employees for months and the backlog would have been winnowed down by now.

So the challenges CGC has faced in this area remain.  Blackstone brings a lot of additional capital to the discussion, and if they value and want to create a quicker, better CGC, they certainly have the resources to do so.  But if maximizing profit is paramount, the dramatic qualified employee expansion that's needed may never come to pass and the prices charged for services may increase instead.

I've an open mind, but it bears watching.

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Or they can bleed it dry like what was done with Sears.  
 

Or they can look at short term gains that have a negative impact on the grading integrity that CGC has established… like authentication of autographs instead of maintaining CGC’s integrity if witnessed autographs.

Or a few other things that I wish not to provide free consultation to in case the the Big Black Stone ever tries to mine ideas from these boards. 

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The question in my mind is, is Blackstone's strategy long-term or short-term? Are they going to try to maintain or improve CGC's reputation? Or are they going relax the grading criteria so much that collectors en masse feel compelled to re-submit all of their books? If it's the latter, they may just make a ton of money quickly, issue a huge dividend to the owners, and then ditch CGC after it has been bled dry.

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20 minutes ago, jimbo_7071 said:

The question in my mind is, is Blackstone's strategy long-term or short-term? Are they going to try to maintain or improve CGC's reputation? Or are they going relax the grading criteria so much that collectors en masse feel compelled to re-submit all of their books? If it's the latter, they may just make a ton of money quickly, issue a huge dividend to the owners, and then ditch CGC after it has been bled dry.

Blackstone bought CGC because they see demand for grading higher than the company can serve.  Long wait times for grading comics and massive growth in demand for grading cards gives them a growth market.  I'm also sure they know about PSA's huge grading backlog and their suspension in accepting new card submissions.  

Prices are going up and I'm sure they will look at every step in the grading process looking for ways to increase efficiency and output.

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This is more about sports trading cards and digital NFTs than comic books (the latter is mentioned exactly once, in passing, in Blackstone's SEC filing announcing the acquisition). Co-investors are almost all in the professional sports and entertainment industry. Blackstone made the investment through its "Tactical Opportunities" shop, meaning it's sock-drawer change to them but with potential for a big breakout, which can only come in a field yet to be exploited -- digital collectibles. The rest of us in comics land may benefit indirectly through CGC hiring more people, resulting in shorter TATs, but we won't be invited to the champagne reception when they hit a billion dollars in revenue. Which, I should add, is fine by me!

Edited by Grottu
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yes.  this deal is a bet that they can control and grow the burgeoning collectibles market while its still young. To take CCG to another level: adding new collectibles, and utilizing their partners for special access to sports etc..  Blackstone is looking at the potential on top of what CGC has already carved out, and they and their investors see a long way they can push it... Hopefully not too cynically that they break it instead. 

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Right for starters. Use CCG to get the lead in lots of as yet uncertified areas.  

downside of course is, as cynical and money chasing many here accused CGC of being, that Blackstone might do things that would make Steve and Mark blush! 

Edited by Aman619
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15 minutes ago, catman76 said:

How is any of this great for collectors? cgc and all this promise collection bs etc just makes all the rich keep driving prices up so no real person can afford anything. I couldn't afford much 35 years ago and now I can't even afford what used to be dirt cheap and no one cared about. But now that it's encased in plastic and has some made up number on it everyone pays tons for it all and now even trashed comics are getting out of my price range.

Comic collecting just keeps getting worse and worse to me.

Yup... If you call driving up prices good for collectors than fine.  But it's downright discouraging to see some of the prices being realized. 

And sure, you can sell to buy... But eventually that leads to having to make tough decisions.  

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