BGS vs PSA

Gem Mint.

About

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)

Professional Sports Authenticator (PSA)

Head to Head

Grades

* BGS 0.5
PSA Population Report

Population Reports

  • 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%!
  • 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
$5.2 million

Recent Sales

  • 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

  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.
  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.
  • 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

Arbitrage

  1. Damaging the card extracting it from the BGS case (as PSA 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

References

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