Third-Party Sports Card Grading and Its Effect on Value
The grading of sports cards has become a widely accepted method for verifying a card’s condition and authenticity. Grading was first introduced to the hobby in 1991 by Professional Sports Authenticator (PSA) of Newport Beach, Calif. PSA is a company spun off from Professional Coin Grading Service. It was first thought having an independent firm grading sports cards would do more damage to the hobby than help. However, by now, many have found it to be the basis for trading all sports cards of value.
To grade a card, you send it to a third-party company for authentication and state its condition. This company does not buy or sell cards as a business and is independent and credible.
Grading has many aspects. If any type of alteration to a card is evident, the card will be either rejected or placed in a holder without a number grade. In the second case, it will be noted that while authentic, there is “evidence of trimming,” that it has been “altered” or something similar. Unlike other hobbies, where cleaning or restoration of the collectible is widely accepted, in the sports card area, there is no allowance for any type of modification to a card. It must be exactly as issued to be graded.
The sports card industry has four accepted grading companies and in order of recognition, are usually ranked PSA first, then Sportscard Guaranty (SGC), Global Authentication Inc. (GAI) and Beckett. All are independent companies that strictly grade and authenticate sports cards, other types of cards and sports memorabilia. PSA is the oldest and most widely known. They are experts in all areas of the field, but it is SGC that is widely recognized for its special expertise in 19th-century cards and collectibles. This isn’t saying the other companies aren’t good, but SGC is considered by many to be the most knowledgeable in 19th-century material. Beckett is popular for grading newer (1980-present) sports cards, and GAI is very reputable in all areas.
These companies vary in their philosophy, history and approach. PSA was the first on the market. Many people collect just PSA cards, so the company has that edge. Beckett was the first to use true half-point grading ranging from 1-10 and is one of the last to enter the grading market. New card collectors seem to like the half-point grading. SGC uses a 1-100 scale that is equal to the half-point system, though I just feel it took people a while to get use to that system, thus giving Beckett the edge in new-card gradings. PSA, because of its longevity, and GAI have strong expertise in pre-1969 cards. To go one further, if choosing 19th-century cards, SGC would be first, PSA second, GAI third and Beckett fourth.
Grading a card can add great value to your collectible. At first, most people assume that one would grade just the star players, such as Mickey Mantle, Babe Ruth, Ty Cobb and so on, but there is great potential for grading the common players in each set, too. Each of these companies have what they call a set registry. Collectors can register their sets and compete against others for top spots (highest-graded cards) in each year. Card sets have been produced since the late 1800s, so collecting everything would be extremely expensive. Some collectors pick a year and set out to get the best card in that set.
How does grading increase sports card value?
You may ask how can a card increase significantly if graded? Well, with all the online auctions, major auction houses and very strong prices of rare sports memorabilia and cards, third-party grading gives buyers confidence that they are getting what they are paying for. I notice a significant difference in prices realized when selling a graded card in comparison to a similar ungraded card. The reason, I think, for grading midgrade cards is that cards on a 1-10 scale will grade 3-6 because a buyer doesn’t have the card in front of him or her when bidding. But if the card is graded a 5 by a reputable company, the bidder would know what to expect condition wise and be confident there are no hidden faults with the card. In other words, peace of mind is usually why cards in these grades bring higher money at auction.
Meanwhile, for cards graded 7-9, especially 8s and 9s of cards pre-1969, the card grade adds value in that the buyers know they are not only getting a high-quality card, they are also buying cards that are considered investment grade and have potential to increase in value.
Cards graded 9 and 10 bring top prices because they are usually the best of the best and the population (another factor in prices) is very low. The population is the number of cards in a particular grade in comparison to all the cards being graded. One example is if there are 2,000 of a certain card graded, and there are 3 graded 9 and 2 graded 10 and the rest are 8.5 and lower. When a 9 goes up for auction, it is not only being sought after by investors, but by people seeking to get the highest graded for their set in that year.
Ultimately, though, it comes down to supply and demand. I have seen common players from 1955 (and many other years) that would have a value of $15 if not graded, sell for as high as $4,000 graded as a 9 or 10. It isn’t because the producer made fewer such cards, it is just because getting one in a high grade is very difficult.
The most popular example of this I can use is a 1952 Topps Andy Pafko, card #1. Usually cards #1 and the last card of a set are tough to find in good condition because they are damaged from being on the top or bottom of a pile, have rubber-band marks and so forth. This particular card is worth about $500 in midgrade condition, and if graded up to the equivalent of a 4.5 grade, would sell for about the same price of $500. It’s when you get into high-grade examples that the price soars. Recently, this particular card graded an 8 sold for $81,000. It is a tough card in high grade, and set collectors along with investors are aggressively after it.
There are many cards that sell for 20-100 times their value when graded and in high grade. I could list hundreds of cards, but the main factors in determining high values for cards of players that aren’t major stars is the population of the card in the grade desired, along with the number of people collecting that set or player. You can have a very low-population card in high grade that won’t necessarily get a very high price if the set the card is from is one that is not popular with collectors. In that case, even though there is a low supply, there is just as low, if not lower, demand for it.
Again, while many star players in high grade bring high prices, it isn’t just the major stars that are increased in value by grading. The same is true for many common player cards. As with all hobbies and investments, investing in sports cards should be thoroughly researched before jumping in with two feet. Pick the areas of collecting and having your cards graded that suit your needs and desires.
Grading has many variables
To sum it all up, grading has many variables—the card, population of the card once graded and credibility of the grading company. I am not saying any one company is better than any other. Still, overall results show that if you take a pre-1970 card in the same grade but in the four different holders, chances are the PSA would get the highest price, SGC second highest, GAI third and Beckett fourth. Meanwhile, on post-1970 cards, it would be a close call between PSA and Beckett for top prices, SGC would be next and GAI last. I think this is just a matter of grader preference.
I have included pictures of miscellaneous cards that have been graded by the top four grading companies so that you can see what they look like in the various holders. There are more than these four companies, but the value of other companies’ high grades in comparison to these vary greatly. These four are considered the most credible companies in the industry. So saving a couple bucks and getting cards graded elsewhere will reflect greatly on the prices you can realize.
I noted the ratings by era not to confuse people but to show the different types of collectors and their preferences. This is an arbitrary rating, but I feel most would agree with the order I placed them by era.
While grading your cards can greatly increase your collection value and give it much more appeal to a potential buyer, it can also be very costly if you don’t get the grades you expect. So as noted above, proceed with caution, and always consult a professional for assistance so you don’t end up spending money on grading and not get any benefit from the service.