The task is daunting, but as each day passes, Professional Sports Authenticator (PSA) is making a small dent in its backlog of trading cards that need to be graded.
PSA was reportedly behind by several months and backlogged by approximately 10 million cards that were submitted by collectors when it suspended its Value, Economy, Regular and Express services on April 1. PSA’s Super Express service, which costs $300 per card, is still available.
The California-based company is working as hard as it can to catch up and grade as many cards as possible each day. Nat Turner, executive chairman of Collectors Universe, PSA’s parent company, told Sports Collectors Digest on April 21 that PSA is currently grading cards that were submitted as far back as seven months ago.
“We’re doing tens of thousands of cards every day,” Turner said. “I’d say it depends on the day. We’ve consistently been north of 20,000 cards a day in output.”
PSA, founded in 1991, is the largest third-party trading card authentication and grading company in the sports collectible industry. It has a solid reputation as one of the leading — if not the leading — graders in the hobby. PSA wants to stay that way, but it isn’t going to risk its integrity to cut corners, Turner said.
“These are largely human processes … and human process is pretty hard to scale as well. In our case, we’re not willing to sacrifice on quality, so we’re not just going to hire a bunch of people off the street and say, ‘Here, have at it,’ and put cards in cases,” Turner said. “We’re never going to do that. Even as the cards are piling up, literally behind them, that’s just not something we’re willing to do.”
Turner said the enormous backlog of card submissions was caused by a perfect storm of factors during the pandemic during the past year.
“What happened is an avalanche of demand,” he said. “We saw with the COVID pandemic and people going home and rediscovering their collections and opening packs more than ever and low interest rates driving a flight to alternative assets and investors getting involved and funds getting involved, it created a perfect storm of demand for sports cards.
“As things are more valuable, the question of, is it real or not, and what grade is it in, is even more important, and so that’s what’s happened to us as an industry. As the prices go up, people realize, like auction companies, that we’re no longer taking raw cards. All those things in total just multiplied demand by like a factor of 10 over the course of the last couple of years. I don’t think anyone could have predicted that or prepared for it.”
That begs the question: was it inevitable that PSA had to suspend card submissions?
“I want to say it wasn’t; I think we were optimistic. But, in hindsight, it probably was,” Turner said. “We just couldn’t keep up.
“Specifically, what happened is we received an actual avalanche of cards around mid-March. It was like a power surge to the system, and we couldn’t even tell people if their box was in the building. That’s just not acceptable. It’s not fine, but it’s more fine to like say, ‘Look, it’s going to take seven months to get your cards turned around.’
“I think people are willing to understand that. They’re not happy about it, but it’s definitely not acceptable to say, ‘Hey, your precious cards, we can’t even tell you if we have them.’ That’s definitely not OK, so that’s really what precipitated the suspension of service. We needed to get through that power surge of demand — all the boxes that had piled up — so that we could confidently tell everybody, ‘Your cards are in the building. Here’s where they are in the process. They’re all here and accounted for.’”
In January, Turner and a group of partners that included hedge fund manager and New York Mets majority owner Steve Cohen purchased Collectors Universe for $853 million. On April 21, Collectors Universe announced it had purchased the technology company Genamint, Inc., to help improve card grading.
Turner said Collectors Universe had been in talks with Genamint founder Kevin Lenane even before Turner and his group of investors bought Collectors Universe.
“The acquisition of Genamint even predates that, where we kind of saw some of that coming and we said, ‘Look, we have to invest in technology to get ahead and stay ahead and build scalability,’” Turner said. “That’s priority number one, being able to be more efficient.”
Genamint’s technology analyzes each card in real-time and is able to provide diagnostics and measurements, and detect alterations or other changes made to a card’s surface in an effort to assist human graders.
“Genamint allows us to automatically identify cards and all sorts of things in the grading process to assist the graders, not replace them,” Turner said. “The second thing is that it’s another level of security and investment around staying ahead of, in my opinion, the fraudsters in the industry that are getting more clever than ever.
“At the end of the day, all grading companies are largely a human process, even processes are prone to the occasional error or slip-up. I want us to be better. I think we’re great now, but again, I think to stay ahead and to do all the things to keep up with what’s happening, I think this was highly necessary.”
PSA has said it’s going to try to reopen all its grading services on July 1. Turner isn’t sure at this point if that’s a feasible date.
“Time is going to tell,” he said. “We have quite a few investments we’re making right now simultaneous to Genamint that we’re going to announce soon that will greatly accelerate our capacity. I wish I could tell you. I just don’t have a good sense for what the timelines of those are yet.”
In just three weeks since PSA suspended submissions, Turner is pleased with the progress the company has made on grading the piles upon piles of backlogged cards.
“I’ve gotten a lot of great messages from customers, from collectors, saying, ‘Hey, I’ve noticed my Express order, even my bulk order, it’s moving finally,’” Turner said. “I got a lot of nasty emails when we raised prices, which we had to do. I didn’t get a single nasty message about this suspension. Most people, in fact, were positive. They were like, ‘Great news. I can’t wait to get my cards back faster now. Thanks for doing this.’ That’s pretty encouraging.”
With its 30-year history and solid stature in the hobby, PSA loyalists have been understanding of the shutdown. Turner noted he’s heard from diehard PSA users that are holding off and waiting for the company to reopen and wouldn’t consider switching to any of the other grading companies.
“It’s really inspiring,” Turner said. “Look, at the end of the day, we’re completely understanding of people if they choose a different company. We don’t want that, but we realize it’s on us to get the service back to a point where it’s more reasonable timelines and turnaround times.
“We’re working our hardest. We’ve gotten a ton of messages from people saying, ‘Hey, we’ll be waiting and ready when you’re able to open up again.’ Our biggest fear, of course, if phasing that in so that we don’t get another avalanche in July, which we’re obviously thinking about.”