PSA purchases SGC

[KhalDrogo]

Originally Posted by fabiani12333

According to Gemrate, SGC was up 94% year-over-year in total submissions in January 2024, vs 22% for PSA and 40% for CGC:
https://www.gemrate.com/january-2024-recap

SGC was outpacing their competitors in growth.

Cherry picking one month is very dense of you.

SGC 2023 vs 2022 was up 22%. PSA 2023 vs 2022 was up 21%.

[KhalDrogo]

Originally Posted by Bcr

Why would they turn away easy money?

They might establish a discount on crossover submissions. They will not auto-cross anything. Doing things like adding 28 PSA 10 86F MJ to the pop overnight is not good for the brand. And if they plan to keep the SGC brand, they’re not going to destroy it this way.

[NYBBFAN]

I will use SGC as much as I did before. Zero.

[theshowandme]

PSA did NOT buy SGC

Collectors Universe did

[theshowandme]

We have seen the hobby doctors, lawyers, and accountants.

It’s now the hobby MBAs time to shine

[ggxarmy]

Originally Posted by The_Reverend

Not at all! This will make SGC even less desired by the flippers. The question will be how will the vintage grading market change.

I mean you hate SGC anyway, so whether it was CGC, Fanatics, or surprisingly PSA as it is, you were going to trash the decision.

[rentz]

oh dang i was switching back to sgc for vintage only.
but this also makes sense why i havent seen a series 1 topps cheap special from them

[The_Reverend]

Originally Posted by ggxarmy

I mean you hate SGC anyway, so whether it was CGC, Fanatics, or surprisingly PSA as it is, you were going to trash the decision.

I have always stated SGC would be my preferred vintage company if I did vintage, but for modern and ultra modern, having used them multiple times, moving their slabs took too much effort.

[Scottish Punk]

Originally Posted by theshowandme

PSA did NOT buy SGC

Collectors Universe did

This is a slight distinction, but may be an important one. I thought about the overall grading market last night before falling asleep. Collectors may not be as bullish as others on the growth of the grading market. They might be thinking 1.2 million slabs a month is about where they want to maxed out at. If the overall pie isn't enough growth, the next best thing is to buy out the next biggest slice.

SGC can remain their own entity, but collectors ultimately owns that market share in the end. I still think this erodes away confidence in SGC for the market. How much money are they going to allow SGC to invest in expansion? registry? etc.

If you are an eternal optimist, you could look at and say SGC can pull in some PSA expertise and capital and they will get a bunch of upgrades done. PSA knows how to build a registry. Maybe even use PSA/DNA to authenticate non pulled autos and send them back to be slabbed with an SGC slab.

Lots of questions on how this plays out.

[lakesidez]

Article:

https://www.sportscollectorsdaily.co...o-acquire-sgc/

[cavsfan70]

buy up SGC 10s to cross? that might be worth it if they have some kind of 1:1 grade.

they probably did this for the grading facility for a southeastern hub.

does this "explain" why SGC has been "slow" recently?

[CardGoonies]

Originally Posted by imbluestreak23

Lots of questions and I donÂ’t understand the angle

But the SGC tux bois better be okay with PSA because CU now owns them lol

I'm going to guess that PSA will use SGC for Vintage only. This will become their vintage facility, ship to, grading specialists, etc.

If the above happens, I'm curious as to what the cutoff for Vintage would be. I hate PSA's grading scale trends for prior to 1990 cards. I think, generally speaking, that requires a harder skillet to scale up w new employees. I would guess PSA would classify vintage as pre-1980, which is a bummer to me.

I also think this blocks Fanatics from getting into grading as well. Fanatics only viable move here now is to buy Beckett, which was what I was thinking was the smart play for them all along.

[KGD54]

I think everyone is looking at this from a collectors perspective but not at a business perspective. Lets not forget that PSA/Collectors is a business and the bottom line is what they care most about.
I am assuming they looked at SGC's books and determined they could buy at a good cost ratio. I think PSA sees this as farther solidifying the market dominance they have. SGC has always been the company with cheaper fees and fast turn aronund times. By buying SGC PSA can insulate there prices with less competition. I think we were headed to a $15 or less grading by the end of the year from most places as companies try to race to the cheapest services, now that goes away and we do not see anything under $15 other than specials.
Keeping the two businesses separate can also be a smart move. The infrastructure that is built at SGC would take time to switch over to PSA. This includes the submission process, post grading process and the pop report. To try to change the submission process form SGC to PSA would take time to shut down SGC in order to change, and that simply is not worth it currently.

[sauceboy]

This sucks. SGC was my favorite grading company by far. I'm guessing PSA will gradually phase them out completely, yeah?

[premium1981]

Didn't see this one coming. Interesting.

[CardGoonies]

Originally Posted by KGD54

I think everyone is looking at this from a collectors perspective but not at a business perspective. Lets not forget that PSA/Collectors is a business and the bottom line is what they care most about.
I am assuming they looked at SGC's books and determined they could buy at a good cost ratio. I think PSA sees this as farther solidifying the market dominance they have. SGC has always been the company with cheaper fees and fast turn aronund times. By buying SGC PSA can insulate there prices with less competition. I think we were headed to a $15 or less grading by the end of the year from most places as companies try to race to the cheapest services, now that goes away and we do not see anything under $15 other than specials.
Keeping the two businesses separate can also be a smart move. The infrastructure that is built at SGC would take time to switch over to PSA. This includes the submission process, post grading process and the pop report. To try to change the submission process form SGC to PSA would take time to shut down SGC in order to change, and that simply is not worth it currently.

I think this is more strategic from an added value or use standpoint. I don't see this as at all strategic from a "kill the competition" standpoint.

Monthly grading numbers show that PSA has no competition in the market. #2 is so far behind them & has no chance of catchup up that there's no way they would waste capital to just eliminate them. SGC could grade cards for $5 & it wouldn't move the needle.

Hell, PSA's building could burn down w all of the cards in it & PSA would still be #1 by a mile while operating at local card shows under tent poles & tarps.

[OhioLawyerF5]

Originally Posted by sauceboy

This sucks. SGC was my favorite grading company by far. I'm guessing PSA will gradually phase them out completely, yeah?

Not likely at all. People aren't understanding that PSA did not purchase SGC. Collectors did. It is a large conglomerate investing firm that purchases companies. They then keep those companies operating for the most profit they can. The companies under their umbrella are completely separate. There is likely no noticeable change for SGC. Collectors has a fiduciary interest in keeping both PSA and SGC growing and profiting as much as possible.

[JeremyNick]

Originally Posted by MiamiMarlinsFan

You guys keep saying “monopoly” when it’s actually a oligopoly…

Nat’s Russian?

[base set]

theshowandme's post of several SGC pre-war slabs illustrates my main question on this - my perception was that SGC was the strongest with these cards. given that a lot of collectors seek simple consistency in slab appearance, it would seem to me that there would be good reason for CU to keep the 'brand' alive for that market segment in particular. ?

my next grading submission was going to be that same Matthewson card and a couple John McGraw cards, as well as a Wagner (not -that- Wagner). I think I will wait on that for now and just send in a few moderns to PSA instead.

[rentz]

Originally Posted by KGD54

I think everyone is looking at this from a collectors perspective but not at a business perspective. Lets not forget that PSA/Collectors is a business and the bottom line is what they care most about.
I am assuming they looked at SGC's books and determined they could buy at a good cost ratio. I think PSA sees this as farther solidifying the market dominance they have. SGC has always been the company with cheaper fees and fast turn aronund times. By buying SGC PSA can insulate there prices with less competition. I think we were headed to a $15 or less grading by the end of the year from most places as companies try to race to the cheapest services, now that goes away and we do not see anything under $15 other than specials.
Keeping the two businesses separate can also be a smart move. The infrastructure that is built at SGC would take time to switch over to PSA. This includes the submission process, post grading process and the pop report. To try to change the submission process form SGC to PSA would take time to shut down SGC in order to change, and that simply is not worth it currently.

good points. SGC wont go away quick for sure, but i would love to see them keep sgc as their vintage arm of grading.

[OhioLawyerF5]

Originally Posted by base set

theshowandme's post of several SGC pre-war slabs illustrates my main question on this - my perception was that SGC was the strongest with these cards. given that a lot of collectors seek simple consistency in slab appearance, it would seem to me that there would be good reason for CU to keep the 'brand' alive for that market segment in particular. ?

my next grading submission was going to be that same Matthewson card and a couple John McGraw cards, as well as a Wagner (not -that- Wagner). I think I will wait on that for now and just send in a few moderns to PSA instead.

They already announced the two grading companies in their portfolio would continue to operate as separate businesses. This is much ado about nothing. It's just a different name signing the checks. That's it.

[Philthy]

They stated the two companies will be run separately but we don't know what their long term plans are. It can take years to full integrate a company after a purchase.

[jduds]

I've noticed the premiums for graded cards dropping in the last couple of years (not just overall pricing). I dug into this recently and out of the cards I track SGC's premium fell to 2.67x of raw where it had been 3.6x a couple of years ago the last time I tracked it. I'm guessing collectors will realize this eventually and there will be a sharp drop in demand for grading. I'd wager the smaller companies will get zapped first and that this was the perfect time to have sold SGC for the SGC-side of the equation. Good for them.

[anusinha]

Originally Posted by OhioLawyerF5

They already announced the two grading companies in their portfolio would continue to operate as separate businesses. This is much ado about nothing. It's just a different name signing the checks. That's it.

Think of it as Yum Brands operating both KFC and Pizza Hut, each entity fills a different niche.

[base set]

Originally Posted by OhioLawyerF5

They already announced the two grading companies in their portfolio would continue to operate as separate businesses. This is much ado about nothing. It's just a different name signing the checks. That's it.

thanks, that's what I was thinkin. the Internet is all about 'ado'