BGS vs PSA

About

With the recent resurgence of the card market, this post attempts a narrow empirical comparison between the two largest card grading providers — BGS and PSA.

Grading exploded in 1998 and again in 2020. Between 1991 to 1998, PSA graded roughly one million cards. From 1998 they graded at least one million cards per year — and now surpass two million annually.

Note: This post doesn’t cover other grading companies, such as Sportscard Guaranty Corporation (SGC) or Certified Guaranty Company (CGC).

Why Grade?

  1. Authenticity. Confidence the card isn’t a forgery or the victim of tampering (e.g. trimming edges, color touching, paper filling, reprint).
  2. Protection. Cards are sealed (“slabbed”) in plastic cases, which are very resistant to damage.
  3. Fungibility. Standardized prices for buyers and sellers — all grades of a particular card are interchangeable.
  4. Population reports. See how many cards of a particular grade exist to determine rarity.
  5. Value. Because of the reasons above, graded cards sell for a much higher premium.

Beckett Grading Services (BGS)

Launched in 1999 as part of Beckett Media — a card price guide and memorabilia company started in 1984 and best-known for printed price guides during the 1990s — which were the de-facto standard.

In 2001, launched Beckett Vintage Grading (BVG) for cards made before 1981. In 2005, sold to Apprise Media. In 2005, converted BVG to a single-grade system as older cards are more likely to suffer from single defects (e.g. extreme off-centering). In 2008, sold to Eli Global. In 2008, expanded to grade Star basketball cards. In 2010, partnership with SeatGeek. From 2006 to 2013, ran a casual sports social network named FanSpot. In 2014, launched BGS 10 black. In 2016, launched an autograph authentication company. In 2016, launched a cheaper single-grading service (i.e. no sub-grades). Exclusive grader and authenticator of Topps Vault trading cards. In 2020, fake BGS slabs reported in circulation.

In an industry first, cards are graded using a half-point scale “report card” based on four factors: centering, corners, edges and surface. The final grade is stricter than the average of the four grades — with the lowest grade weighted the most heavily. A separate grade is also provided for autographed cards. Grades in-between whole numbers are called “tweeners.”

Absolutely perfect cards have a black label; the following two grades with a gold label; silver for the next two levels; and white for all others. Cards are sonically sealed (to prevent heat damage) inside an archival inner sleeve to prevent movement. More detail on the grading process here.

Cases are bulkier than PSA for better protection and allow the edges of the card to be viewed from the side (industry first), are designed to be stackable, and are claimed to include some level of UV-resistant material.

Confusingly they also offer Beckett Collector Club Grading (BCCG), which handles high-volumes with a simplified grading scale between 5 and 10 — usually for secondary-markets (e.g. Target graded cards). Cheaper and inferior (BCCG 10 does not guarantee a BGS 9.5), with a much lower selling point.

BGS 10s are extremely rare (impossible for older cards) and is comparable to Certified Guaranty Company (CGC) comic book grading, which has many a relatively high number of 9.8 grades and very few perfect 10s.

Professional Sports Authenticator (PSA)

“The largest and most respected third-party authentication and grading company in the world for trading cards and memorabilia.”

PSA launched in 1991 by the owner of the biggest coin grading company, PCCG. Under the parent company, Collectors Universe Inc., which was formed in 1986 for third-party collectable authentication and grading. Other companies include Professional Coin Grading Service (PCGS), PSA/DNA Autograph Authentication, and the publications (Rare Coin Market Report and Sports Market Report). Licensed (later buying) the patented holder and 1–10 grading system from the first grading company, Accugrade Sportscard Authentication (ASA).

The first PSA graded card was a T206 Honus Wagner owned by Wayne Gretzky, which was later found to have been tampered (trimmed) yet given a PSA 8 grading — which it still retains. It’s accused the grader knew the card was trimmed; PSA founder David Hall still denies the card was trimmed.

In 2008, introduced half-point grading — but only between 2 and 9. In 2019, requested and secured $4 million in forgivable loans under the Covid-19 Paycheck Protection Program, but subsequently returned the money. In 2020, Collectors Universe was taken private in a $700 million all-cash buyout from hedge fund manager Steve Cohen, D1 Capital Partners, and prolific collector Nat Turner.Off-Center (OC) — They give some leeway depending on “eye appeal”, but an OC card always lowers the asking price.

Grades can also include the following qualifiers: ST (staining), PD (print defect), OF (out of focus), MK (marks), and MC (mis-cut). More detail on the grading process here.

PSA cases are slimmer (which scan better) and have consistent white labels. Collector’s Universe CEO stated that in many cases, cards are graded in around 30 seconds. PSA has evolved their cases over the years, and like BGS has been prone to fakes.

Head to Head

PSA has more full-time graders (25) than Beckett (15), and certified more items (over 40 million) than Beckett (12 million). Both services offer free card population (“pop”) lookups — the BGS Registry and PSA Population Report. Both services start at around $20 per card and turnaround times vary.

As of 2020, roughly 50% of PSA submissions are basketball; 14% baseball; 14% non-sports; 12% football; and 10% everything else. BGS submissions are 40% basketball; 25% baseball; 20% football; 10% hockey; and 5% other sports.

PSA has a cash-back policy (will buy the card at market value, or refund the difference) on the accuracy of grades. As of 2020, BGS no longer offers a guaranteed turnaround time. PSA are seen as the experts for pre-1980 vintage cards, while BGS is generally for modern (i.e. after 1980) cards.

As there hasn’t been any study into which case is technically superior (e.g. fakes, tampering, physical toughness, UV damage, heat damage), which “slab” is better is based on personal preference. Some prefer the thin PSA style with a consistent white label, others like the sturdy BGS with colored labels for easy identification, some want consistency, while others mix-and-match.

Grades

Here is my comparison between BGS and PSA grades. Note there is no PSA 11, but if there was, that’s where it would be.

* BGS 0.5

Since there are twice as many BGS grades, it makes sense there are two BGS grades for every PSA — with the exception of BGS 10, which would be equivalent to a (non-existent) PSA 11. Note that BGS “True Gem Mint” (referred to as “true gem”) has all sub-grades 9.5 or higher; BGS “Black” has all perfect 10 sub-grades. BGS 9.5 that are not “true gem” are referred to as “regular.”

BGS 10 grades are extremely rare and for many cards, don’t exist — even straight from the pack (due to printing quality) — making at least a subset of BGS 9.5 cards equivalent to PSA 10s.

BGS 10s or a BGS 9.5 “true gem” is definitely a PSA 10, but the inverse is not necessarily true. A PSA 10 might be a “true gem” BGS 9.5. Sure, a PSA 10 might also be a BGS 10, but the probabilities are very low (or possibly zero).

PSA Population Report

Population Reports

To compare grades between companies, sampled the BGS/PSA 8+ rookie cards from three of the greatest basketball players over the last three decades.

With just three cards the sample size is over 20,000 for BGS and 40,000 for PSA. Note that I manually separated out the “true gem” BGS 9.5 grades into their own category. Observations:

  • A “true gem” BGS 9.5 is harder to attain than a PSA 10 across the board (2x for Kobe, 4x for the LeBron)
  • PSA 10 percentages likely include all BGS 10 “black”, BGS 10, “true gem” BGS 9.5, and some Gem Mint BGS 9.5s
  • BGS 10s are an order of magnitude (from 16x to 100x) harder to get than a PSA 10, and never greater than 1% of the total number of BGS graded cards. With a total of only 76 cards in my sample, they account for only 0.003%!

If we add up graded percentages (e.g. all BGS 8.5 and BGS 9 cards against PSA 9s) and look at the absolute differences:

  • PSA 9 matches closet to BGS 9 combined with “regular” BGS 9.5s
  • PSA 10 matches closest to only “true gem” BGS 9.5s
  • BGG 10 numbers are too low for any meaningful impact

Link to the spreadsheet.

$5.2 million

Recent Sales

Taken from completed eBay sales listed on 130point.com:

PSA outsells BGS by a wide margin:

  • BGS 10 sold for over twice a PSA 10, even though it’s between 15 and 100 times harder to get
  • PSA 10 sells for more than double a “true gem” BGS 9.5
  • A “true gem” 9.5 sells for more than 50% more, but largely the same when containing both a 9 and 10 sub-grade (effectively cancelling out)
  • BGS 9.5 sell for about a quarter-to-third more than PSA 9

Conclusion

If we take the following to be accurate:

  1. My data set is sufficient (over 60,000 submissions spanning three decades) and calculations are correct. Let me know if that’s the case!
  2. The distribution of cards sent to both companies is roughly the same (i.e. sending better condition cards to one company over the other would skew the data). I’m not aware of any skew.
  3. Both companies grades consistently (i.e. all BGS 9.5 cards are better overall condition than BGS 9s, etc.). This is the primary function of a grading service. If the grading of a company can’t be trusted, its prices would vary wildly.

Then the price difference has nothing to do with the cardboard. Because if it did, probability tells us that all “true gem” BGS 9.5s (and even those with a single 10 sub-grade) are graded with roughly the same distribution as PSA 10s. The premium is in the plastic, not the paper.

There are many reasons for this:

  1. PSA is easier to understand, especially for buyers who aren’t educated in the subtleties (10 is a nice even number, 10 is bigger than 9.5, sub-grades add complexity). BGS doesn’t have an easy way to filter population reports by “true gem” cards.
  2. PSA grades are broader (e.g. PSA 10 spans four different BGS grades) and therefore all have the potential to be pristine BGS 10s — although the actual probability is low.
  3. PSA market effect from being the biggest and well-known, with much greater trading volume and many high-profile sales (thanks in part to vintage cards that BGS doesn’t grade) and a feedback loop where people pay a premium for PSA 10 because they can on-sell at the same premium.

In a paradox, BGS prices are lower because grading is more accurate. According to the data:

  • BGS 10s should (and do) sell for the most
  • “True gem” BGS cards should sell at the same level as the highest PSA 10s — because a “true gem” is very likely a PSA 10, but not vice-versa
  • PSA 10s should sell for more than “regular” BGS 9.5s — since a PSA 10 is likely at least a BGS 9.5

Prior to the 2020 surge in prices, high sub-grade BGS actually commanded a premium over PSA (I know this because bid more for BGS 9.5, and often had to “settle” for a PSA 10)! A nice analysis video by Cardi-C.

Arbitrage

“Arbitrage is trading that exploits the tiny differences in price between identical assets in two or more markets. The arbitrage trader buys the asset in one market and sells it in the other market at the same time in order to pocket the difference between the two prices.”

Since the actual card inside a “true gem” is almost certainty a PSA 10, the upside for re-grading (“crossover”) a BGS to PSA is a doubling in value — while the downside (if graded a PSA 9) is only losing half the value.

Example: Buy a “true gem” BGS Jordan rookie for $150,000 to potentially make over $150,000 if it grades PSA 10, but lose only $60,000 if it grades a PSA 9. It would only take half the cards coming back as PSA 10 to be profitable, with a huge upside for every extra PSA 10.

The risks to this are:

  1. Damaging the card extracting it from the BGS case (as PSA is no longer offers re-grading)
  2. More than half the cards returning as PSA 9 or lower
  3. The price of a card drops, or the gap between BGS and PSA pricing closes, during the long turnaround times from PSA

About Me

Amateur early-nineties Jordan BGS 9.5/PSA 10 collector for the past 15 years.

If all else fails, don’t forget the #1 rule of card collecting: “buy the card, not the grade!”

References

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