There is big news today, as Collector’s Universe has purchased Goldin Auctions. For those not completely up to date on the goings on of this side of the hobby, Collector’s Universe is the parent company that owns PSA grading. I have been a staunch detractor of grading since the beginning of this site, and this news only furthers my aversion to using any sort of grading in my collecting journey.

Over the last 18 months, PSA grading has gone from a present but not overwhelming aspect of being a collector to a monolithic presence that governs every last little transaction and impacts every collector in some way, shape or form. It used to be that as long as you werent dealing in prospects or vintage, grading was relegated to portions of the hobby that you could avoid if you wanted to. Thanks to a collector boom, it has become almost impossible to sell raw cards on eBay without fear of returns, and as a result, values of raw cards have become absolutely dependent on their potential grading result.

Without going into a 10 page long tirade that goes into the deep corners of why grading is more scam than service, I will sum it up in as short a manner as I can, and why this new merger is something everyone should be very interested in – especially as it pertains to potential conflicts of interest and manipulation of the grading results.

Basically – grading in general is shielded from any sort of regulation or accountability, other than to collectors that assign value to, buy and sell graded cards. Because those collectors have a vested interest above all else in making more money, its hard to rely on that as a governing body. Therefore, with no government intervention in any grading service, it allows grading companies to broadly define their service process in exceptionally vague terms, and opens giant avenues for conflicts of interest that compromise the integrity of the end product. Because they dont have to answer to why a card gets a specific grade, there is every reason to believe that manipulation of the final graded product can and does happen.

In short, grading was established as a way for collectors to be confident in buying single cards online that are authentic and in good shape. Digital cameras hadnt evolved to multiple megapixels on a phone yet, so there was need to ensure that digital faceless deals could be done without fear of getting scammed by fakes or trimmed cards. In that sense grading is TREMENDOUSLY valuable – in 1998. I would argue that piece of it is still valuable in 2021, but that is .0001% of the reason why people grade modern cards.

Right now, grading is almost entirely about marketing gimmicks. Assigning needless grading results above and beyond mint condition (hyper-mint) to entice collectors to pay more money for subjectively perfect examples of a given card, for the sole purpose of then expecting more cards to be graded. This includes BGS offering the fabled “black label BGS 10,” which by all study should never exist. Its literally a marketing gimmick designed to sell more submissions, if not only because of the ability for collectors to crack and resubmit as many times as they want, in order to achieve the desired grade. In itself, that is a giant problem.

This begs the question of how all these major problems create more problems with a grading company buying an auction house, right?

Pretty simple answer with a woven web of conflicts that arrive. Auction houses sell graded cards, now more than in any time in the history of cards. This means that by owning an auction house, there is a potential for giant conflicts of interest due to the nature of the subjective non-transparent service method grading employs.

This is not saying that grading companies or auction houses regularly conspire to defraud collectors, but co-ownership presents avenues in which that could take place. Given that grading companies and its high profile executives have had long storied histories with law enforcement, we have to cast a skeptical eye. Its our responsibility.

Lets look at ways this could take place. First, is the actual manipulation of graded cards. Although its hard to believe that a grading company would actively manipulate grades en masse to achieve higher prices in their auction house, it doesnt mean that it couldnt happen. An example would be a generational type card, one that would sell for money only spent by the top .00000001% of the hobby. If that card would get a hyper-mint grade vs a standard mint grade, it could mean the difference between selling at $XXXXX dollars to now selling at $XXXXx100 dollars. Not only would the sale benefit the auction house, but the national press from that sale would benefit both the auction house and the end goal of the grading company – more subs.

Because mainstream news has become a regular spectator in the hobby these days, attention from more people have benefitted a ton of card values to the point where a $10,000 dollar card in 2019 could now be a $100,000 dollar card or more. That’s the type of stakes we are dealing with on the smallest possible level. On the largest level, multiple cards have sold for record prices, and every single one of those record sales featured a subjective opinion grade from PSA or BGS.

Another example is any potential funneling of cards between the two sides of the business. Either PSA offering to list cards with Goldin Auctions at the end of the grading process, or Goldin Auctions featuring PSA grades more prominently in their listings. This example presents huge conflicts of interest across the board, especially if PSA starts publicly advertising direct access to auction listings.

Imagine you send in a card worth $100k. If PSA offers to directly send and list that card for you at the end, without transparency into the process of assigning a grade, there are no regulations in place that say it is illegal for them to artificially inflate that grade to get a better auction price.

That’s the whole problem here – no one knows why a PSA 10 got a PSA 10. Although PSA presents vague descriptors of what goes into the decision making behind the scenes, its not like they send out a report detailing their findings, nor do they keep record of specific cards to prevent collectors from gaming the system. PSA could also argue that its collectors that have assigned the massive values associated with hyper-mint grades and that they dont control the secondary market, but its obvious that if customers dont get the grade they want, they find ways to make sure they do down the line.

People always cite the fact that they dont care and honestly that makes sense. No one wants to see how a hot dog is made, they just want to eat a delicious meal. Even if they did see, the chance it makes a difference in their preference is slim to none.

Obviously Im just stating why I personally dont engage with grading and will always call out these inconsistencies and opportunities for fraud, despite the millions of people who have used the service. Just because we all make tons of money from a specific exploitation, doesnt mean it the merits of a potential conflict shouldnt be a part of our focus.

There are ways to fix these problems, but all of them would curb the success of PSA as a company because it would mean that they would lose access to the marketing gimmicks they have purposefully created to build their business empire. I have already seen more of a growing trend of collectors who have sworn off grading all together, but I doubt any of my ramblings will do anything to make that more prominent.