On July 6, the Certified Collectibles Group publically revealed their plans for its latest venture under the CGC grading banner. If the acronym CGC is not familiar to you, you probably dont collect vintage comic books. CGC stands for Comics Guaranty Corporation, and they revolutionized the vintage comic book marketplace by being the first impartial company to grade and encapsulate comic books in tamper evident plastic enclosures back in the year 2000. They are partially responsible for the massive prices being paid for vintage key issue comic books as of late, by bringing confidence and liquidity to the marketplace. CGC is just one division of the Certified Collectibles Group. NGC (Numismatic Guaranty Corporation), which focuses on third party coin grading, and PMG (Paper Money Guaranty), which focuses on paper money grading, help make up the two other major divisions. And no mention of third party grading companies would be complete without stating the obvious--most of these companies go by a three- or four-letter acronym.
CGC Enters The Trading Card Grading Market
The Certified Collectibles Group has always been at the forefront of analyzing new business opportunities from within the collectibles trade, and CGC has been a revenue driver for the company since they have a virtual lock on comic book grading at present time. Their closest competitor is CBCS, but many consider CGC to be the dominant force, since they revolutionized comic grading and have since graded well over 5 million comic books. NGC, which is also owned by the Certified Collectibles Group, has been fighting a battle against PCGS. PCGS stands for Professional Coin Grading Service and is owned by the Certified Collectibles Groups closest competitor, Collectors Universe. PCGS is considered by some to be the leader in coin grading at present time, leaving NGC to take the title of second place should this be true. Along with PCGS, the Collectors Universe also owns PSA. PSA stands for Professional Sports Authenticator, which grades trading cards; whether they be sports trading cards or non-sports cards.
Confusing matters (and acronyms) even more, CGC no longer grades just comic books. Over the years, the company has expanded the CGC moniker into a magazine grading division, a movie lobby card grading division, and even a concert poster grading division. This left a lot of collectors and enthusiasts in the trade curious as to what other opportunities the company was considering. One such market that has been completely ignored by third party grading and encapsulation has been movie poster grading. Since CGC already grades large size vintage concert posters, most analysts in the trade (myself included) were hoping that CGC would use their vast expertise to start grading and encapsulating movie posters, so when word was announced that CGC was looking to get into other businesses, this would have been an obvious and exciting choice, in my opinion. To this day, buying vintage collectible movie posters even at highly respected auction houses has been a challenge at best, and CGC would easily be able to become the dominant player in this market.
Unfortunately, by the time CGC released their statement on their new venture, most of the industry was already buzzing with rumors. Their announcement that CGC would venture into the trading card grading business was met with a lukewarm response from some collectors and exceptional praise from others. The market for collectible trading cards has seen a massive speculative boom over these past few years. Record prices are not only being paid for modern and vintage era sports cards, but also collectible card games like Pokemon and Magic: The Gathering. Both have been around since the 1990s and have captivated the generation of enthusiasts who grew up with both pop culture icons, so it makes sense that these items are now collectibles and in demand.
But, CGCs entry into this market is somewhat baffling. Even with record prices being paid, there already exist several prominent grading companies in this market. Most of these companies are very respectful, much like CGC, and each tends to cater to different segments of the market, with some cross over. The first is PSA. PSA has been a boon to the trading card industry and grades both sports cards and non-sports card collectibles alike. Pokemon collectors have flocked to PSA en masse to get their cherished cards graded. Due to how popular PSA is, it has received criticism due to their backlogged turnaround times as of late, but the company has been doing a great job trying to work through the demand.
The primary competitor to PSA is BGS (Beckett Grading Services). BGS is another top tier grading company that grades both sports and non-sports trading cards. Magic: The Gathering collectors seem to gravitate toward BGS, while Pokemon collectors have been flocking to PSA. A primary difference between PSA and BGS is the breakdown of the grading scale used. While both companies use a 1 to 10 grading scale, there are subtle differences. BGS uses something called subgrades. These grades break down the individual assigned grading on four separate categories--centering, corners, edges, and surfaces--and then a final grade is assigned as a result. This does help clarify why a card got the assigned grade it did, but it also can cause confusion among PSA collectors who are used to a simple PSA 10 grade. BGS can award cards a grade of 9.5 with differing subgrades. For instance, a BGS card that scores a 9.5 overall grade and has all four subgrades also at 9.5 is called a quad in BGS grading terms. Confused yet?
CGC Trading Card Grading appears to have borrowed this grading element from BGS. This means there will be now two grading companies using a more precise (or complex to quote some critics) grading scale. Ironically, still other trading card grading companies exist, and they do have credibility in the market. This is why when I analyze CGCs decision to enter the trading card grading market, I have my own mixed feelings. CGC has been at the forefront of third-party grading for decades now, but it will be interesting to watch if collectors gravitate to CGC for trading card grading when so many other respectful options exist in this one corner of the market overall. Im still not giving up hope on CGC entering the market for movie poster grading sometime in the near future, and for critics who say it cannot be done, I ask you to check out their concert poster grading division. Will collectors flock to have their trading cards graded by CGC or will they remain squarely with PSA, BGS, and others? Time will tell, but it is obvious the fine folks at CGC saw something here that they just could not ignore. Sadly, I can at least for now.