Last month I was accused of being a bit too dramatic about SGC‘s sudden month-over-month decline of nearly 50% in card grading volume. I questioned whether this was the beginning of the end of an era for SGC, and some though that assessment too harsh. This month, I’ll go with another dramatic headline by calling it an all-out freefall for SGC.

I’m an SGC collector through and through. I bleed SGC black and have been known to wear a tux recreationally. But October volume suggests that September was no fluke. In fact, SGC’s volume declined even further from 60k cards graded in September to just 50k in October. That’s a 16% month-over month decline, and a shocking 69% year-over-year retreat. For context, the “top 3” were all up both month-over-month and year-over-year.

All data per Gemrate:

Inside the numbers: SGC Freefall

Let’s look at SGC’s volume from the last 5 months to get some scale:

June: 158k
July: 153k
August: 118k
September: 60k
October: 50k

When you look at it this way, it’s pretty stark.

Probably not coincidentally, July is also the month when SGC President Peter Steinberg announced his departure from SGC. No new SGC president was appointed, keeping in line with Collectors’ / PSA’s practice of having just one President over all grading operations, Ryan Hoge. In other words, it sure does seem like the idea of SGC and PSA remaining separate and independent was a myth after all. The “merger” talk was a narrative I resisted as a vintage / SGC collector, but it’s hard to envision any other possibility now.

I saw–and still see–room for SGC as a boutique vintage specialty grader. But since Peter’s resignation, SGC has been quiet, with a minimal footprint at big shows. They also seem a bit aimless. SGC’s social media continues to show off modern cards more often than vintage, leaving them positioned as something of a boutique with no specialty. And we know that SGC employees are being cross-trained to PSA.

With no substantive announcements about SGC’s current or future plans, it’s hard to reach any other conclusion than a phase-out. That still strikes me as an expensive way to gain very little market share, but what do I know.

TAG Grading Has Entered the Chat 

SGC is no longer the #3 grader behind PSA and CGC (that’s now resurgent Beckett‘s spot). In fact, they aren’t even the 4th busiest grader by volume! That spot goes to . . . TAG?? If there’s any sign that the SGC apocalypse is upon us, it’s that. TAG isn’t exactly surging–down month over month, even as an upstart that should be in growth mode.

It’s more the case that this is how far SGC has fallen–now grading fewer cards than a company most have not heard of or used.

SGC Clings to Sports

SGC is still #3 in the sports category, and that’s unlikely to change any time soon. But also, sports is a declining category overall, with TCG making up about two thirds of the total grading volume. But just a few short months ago, SGC was out-grading PSA for vintage sports, and that’s not even almost the case now.

What Does It All Mean?

• The obvious conclusion here is that SGC is on borrowed time. PSA will continue to absorb SGC’s employees and physical space, and expand their own capacity while also striving for faster turnaround and, obviously, more revenue.
• I though that an SGC downturn might represent an opportunity for Beckett to gain some ground in the sports category, but that isn’t materializing yet. I contacted Beckett for an interview about sports card grading, but received no response.
• CGC got a boost from a sports special a couple months ago, but so far that looks like a temporary increase.
• SGC’s “output” seems to be matching incoming submissions, because they are currently right around the advertised 20 business days. So they are operating with a tiny crew–but also just handling dramatically decreased submissions.

So maybe the PSA pundits were right from the get-go. Maybe the ultimate plan is simply to eliminate SGC and soak up a few more points of precious market share.

Implications for Vintage?

As primarily a vintage sports blogger, I always try to think through the market from a vintage collector’s perspective.

So, full disclosure: I just sent a nice submission of vintage rarities to SGC last week (through group sub extraordinaire Boca Card Subs). But why? Why send good cards to a potentially sinking ship of a grading company?

The same reasons as always:

• SGC is the most reputable grader for most rare vintage cards–especially prewar. This is especially true for the cards I collect–rare Cuban cards from the 1920’s-1940’s.
• Prewar looks better in SGC.
• I have never and will never submit a card to PSA for grading.
• I firmly believe that SGC grades and values will hold up regardless of SGC’s future.

All this said, I can still be objective and say that things continue to look pretty bleak for the SGC brand. I would love to have to come up with a more optimistic headline next month–stay tuned!

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