Rave : 2002 : The Great CGC Debacle
The Comics Buyer's Guide #1480 (March 29, 2002) reports that a copy of Amazing Spider-Man (Vol. 2) #36 (Black Cover), slabbed by Comics Guaranty LLC and graded as a 10.0, sold recently on eBay for $1,525.01. To which, I would like to add, "Enough!"
What in the world is this all about? Why would anyone bother to spend this kind of money on a comic that is only a few months old and is sealed up in plastic? You can't read it because you can't open it. As soon as you break the seal in order to assess the accuracy of the grading, you immediately void the authenticity of the grading. The only reason to buy one of these slabbed books is as an investment and, in effect, you are staking your money on the perceived reliability of the slabbers, since you cannot examine the book to determine for yourself.
But is the perception of reliability a commodity that is sure to maintain its integrity? After all, who are these CGC guys anyway? Who chose them as the ultimate arbiters of grading in comics? Here is what they tell us about themselves on their web site (www.cgccomics.com):
"Comics Guaranty, LLC (CGC) is an independent member of the Certified Collectibles Group of companies. The Certified Collectibles Group is an umbrella organization consisting of Numismatic Guaranty Corporation of America (NGC) the leading grading service in rare coins, Sportscard Guaranty, LLC (SGC) the fastest growing grading service in sportscards, and now CGC the first independent, impartial, expert third party grading service in comics."
Their pricing, also reproduced from their web site is as follows:
- Economy (40 Business Day turnaround) $25 per book.
- Standard (15 Business Day turnaround) $45 per book.
- Express (5 Business Day turnaround) $70 per book
- Walkthru (Same Day turnaround) 2.5% of Fair Market Value with a minimum charge of $110 per book. Modern (15 Business Day turnaround) $15 per book.
The website goes on to add that
"CGC guarantees one pre-grader and two senior graders will review every comic book submitted for grading [and that] CGC guarantees its holder to be free of defects" but "CGC does not offer a grading guarantee".
In his article "CGC Grading: The Good, the Bad, and the Ugly" (at www.Teako170.com) Terrence J. Brady adds that,
"CGC has a unique policy which does not allow its employees to engage in the commercial buying or selling of comic books. By doing this, CGC remains completely impartial, having no vested interest other than serving clients through accurate and consistent grading."
and explains that,
"When the book is ready for examination, it undergoes an initial page count, content and restoration check, description of the book's notable characteristics, and finally is given a CGC grade. The grade is a compilation of three grader's opinions which is finalized by [the] primary grader... The book is then encapsulated (or slabbed) with a color-coded bar (restored books get a label of a different color than non-restored) and label with information regarding the book's condition, contents and restoration state."
How did CGC manage to get itself established as THE comic grading group?
"In order for a comic to be graded and slabbed by CGC, one must submit their book(s) through one of CGC's dealers or Internet partners such as Amazon.com Auctions, eBay, and Wizard. When CGC offered limited charter membership in July '99, it took only a few weeks for retailers and dealers to fill the one hundred slots available. Some of the most well-known names in fandom are on-board: Sotheby's, Diamond, Wizard World"
and others. Clearly, CGC is honest, upright, fair-minded and intent on working with the major comic dealers even as they work hard to eliminate any conflict of interest, which is very nice to know for if ever a grader could be seduced into payola this present hysterical climate could do it. And yet, even with these assurances, at the grassroots level, dissension is already seeping in.
At the shop where I buy my comics, the proprietor submitted a small stack of recent comics, all of which looked mint or near-mint, for the Modern fee of $15 apiece. None of them came back any higher than 9.2. No "label with information regarding the book's condition" was anywhere to be found. Instead, each one carried a bar code that presumably allowed the owner to contact CGC for details, a procedure just time-consuming enough so that the proprietor didn't bother to check.
All of the customers that looked at these books would have killed for a descriptive label since none of them could see anything wrong. The general consensus was that "there must be something wrong in the interior" but the owners of the books couldn't remember any defects and since you can't open the book to find out, there is no way to be sure.
As the discussion continued, it was suggested that the books be submitted for a re-evaluation. This is allowed by CGC for another $5 fee per resubmitted comic. This news prompted a series of thoughts by a number of those in the discussion. First, if you kept resubmitting and paid an additional $5 each time, would the grade inch up with each submission? Second, if you broke the comic out of its casing, issued it again without telling CGC it was a previously issued book, would it get the exact same grading? Then things got truly insidious. One customer told of a slabbed Silver Surfer (Vol. 1) #3 that he examined at another comic book shop. The square-bound spine of the book was clearly snipped off at the corner and yet the book got a 9.4, a higher grade than all the "mint" issues at which we were currently looking. The customer asked the owner of the other shop how he could account for the grade with this obvious damage. The owner shrugged and suggested he got the higher grade because he paid for the Express service rather than the cheaper Standard service. "Besides" he added, "it doesn't matter what the real grade is. It's a 9.4 book forever now."
What I am slinging around here is the vilest of hearsay. I haven't a shred of proof that this event ever took place. I have never seen the 9.4 book with the corner cut off. I was not there when the owner was asked the question. I did not hear the owner give his answer. I heard this story from one comic shop customer who, for all I know, may have made it all up for the sake of effect. But the fact that he said it, the fact that this group conversation took place and that the above items were discussed does not bode well for the future stability of these slabbed books as investments.
In case it is not entirely clear, let me say again that I think CGC is completely legitimate and honest. I have nothing against CGC making a living slabbing comic books. More power to them. I have nothing against anyone wanting to slab their comics in order to preserve them or to boost their appeal on the open market. Let me further add that I have a potential ulterior motive here in that I submitted one of the books sent by my comic dealer, a Grant Morrison JLA #1 which I felt was very close to a mint book, and got the lowest grade of any of them... an 8.5!
But here's the point about all of this. I let the proprietor take my slabbed book with his others to a show and every one of them sold. Not for a huge amount. But, even at an 8.5, somebody thought that a five year old comic they cannot open was worth the investment. This may not be madness on the same scale as the Black Cover Spidey purchase but it is still madness and, like any other insanity, it simply cannot last.
Trust me. If you're paying $1500 for a six-month old book because of its grading, the value will only go down. It doesn't matter how reliable the graders are. It takes nothing more than a disagreement on the grades to start rumors, as demonstrated above. Sooner or later, this creates cracks in even the strongest armor. Sooner or later, these investments will go the way of the whole Valiant Line and Howard the Duck #1. You want my advice? Turn around and sell it on eBay again just as fast as you can, before it ends up in your garage sale of 2012. Then go buy an unslabbed copy of the comic, sit down, and open it. You know, it is a pretty good read.