Comics Guaranty, LLC. (CGC)

Posted: 1/21/2005

Thanks to Matt Brady and the fine people at Newsarama.com, CGC's Steve Borock (Primary Grader and President), Mark Haspel (Senior Grader and Vice President) and Paul Litch (Senior Grader) offer an insightful look into CGC's impact on the comic book industry in its first five years. Enjoy!

Love them, hate them, there's no denying Comics Guaranty, LLC (CGC) has had an impact on the comics industry over the course of the last five years.

Clearing the air a little (as there are many misconceptions about what CGC does, is, has done, is connected to), the company line from their website (www.cgccomics.com) reads:

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, and now CGC the first independent, impartial, expert third party grading service in comics.

Our certification companies have a proven and respected commitment to integrity, accuracy, consistency and impartiality in grading collectibles that has made them leaders in their fields. This proven model of success is ideally suited to adapt to the unique challenges of grading comic books.
In short, CGC is a standardized grading service for comics. That is, they receive a comic, examine it, grade its condition (on a 0.5-10 scale, with 10 being perfect, and 0.5 being too crappy for bird cage liner), and then ensure that it will stay in the condition in which they examined it by encasing it in a clear plastic case (or "slab"). The "slabbed" comic then carries with it a color-coded identification tag, listing the grade, as well as any notes about the book's condition, such as if the issue has had restorative work done on it.

A fairly simple process, but its always the simple ones that cause the controversies, isn't it?

CGC advocates cite its aid in online auctions as well as general comic book sales, as one individual's Very Fine is another's Good. With CGC, both buyer and seller know exactly what they are talking about. A CGC-graded 9.8 is a known quantity, where as a "My brother, who's really good at grading comics, says it's Near Mint" isn't.

On the flipside, those who find fault with CGC point out that CGC grading can often inflate the price of a comic to re-donk-u-lous levels, that is, an in-demand comic that came out a year ago, graded and slabbed by CGC can often command an eBay price anywhere from 10 to 100 times greater than a non-graded, non-slabbed copy. Not to mention the impressive prices CGC graded 10.0 books from the current era can command, as well as CGC-graded variants.

The division of minds over CGC and what they do falls somewhere along the "collectors vs. readers" line, that is, those who buy comics for the sake of collecting them (and the potential for investment or resale opportunities) versus those who buy comics strictly to read them.

What's the view from the inside? We took the opportunity of CGC's Fifth Anniversary to sit down with three CGC folks to get their view. Our subjects: Paul Litch: Modern Age Specialist and Restoration Detection Expert; Mark Haspel: Vice President and Pedigee Expert; and Steve Borock: President and Primary Grader.

Newsarama: First off, what was the mission when you launched CGC five years back? Has that mission changed at all in the intervening years?

Steve Borock: Our mission was pretty straightforward: to become the "industry standard" by grading consistently and impartially while holding ourselves to the highest of standards. That mission has not and will not change.

NRAMA: That said, did you think you'd be here, five years later?

SB: I was hoping we would be, but there were a few times at the beginning when we were unsure. Looking back I believe that there was no need to worry. CGC was needed, if not at first wanted. When you look at how successful we have become and seeing one or two non-expert "Mom & Pop" type services open up, we now know that CGC becoming our industry's "Good Housekeeping Seal of Approval" was inevitable.

NRAMA: What, do you feel, is the effect of CGC on the larger industry, both good and bad over the past five years?

Paul Litch: I think the good CGC has done is apparent and has caused a ripple effect in the industry. CGC increased buyer confidence and that increased liquidity and the ability to move comics, thus helping the back issue market. Collectors love our restoration check, but I feel that caused an unnecessary and unfortunate ripple. Restored books are greatly undervalued and wrongfully cast aside. Steve wrote an article in the 31st Edition of The Overstreet Price Guide that I suggest everyone read. Why would you rather own a comic with tape on the spine that will deteriorate the comic book instead of a professionally restored book that looks beautiful and won't deteriorate at an accelerated rate? It makes no sense to me and it is something that I feel CGC will try to address in the future.

NRAMA: That said, what are the other benefits of CGC grading, especially in light of the massive increase in eBay buying we've seen over the past five years.

Mark Haspel: Before CGC anyone could represent any book as being any grade. Most people who bought expensive books on eBay were either disappointed with what came in the mail or didn't know enough about grading/restoration to be disappointed. Now, with CGC, a buyer knows the condition and restoration status of the book being purchased.

NRAMA: By and large, who does CGC cater to in regards to the services offered? The investment collector? The small collector? The eBay-er?

SB: CGC levels the playing field, enabling any collector to be an informed investor and seller in an arena like eBay, that previously was akin to the Wild West. Even mail-order, you would always go with a dealer whose grading you felt you knew. With a CGC certified comic, the collector doesn't have to constantly second guess a seller. Honestly, I feel that this shows that we cater to the industry as a whole.

NRAMA: Along with grading and slabbing, CGC has endeavored to establish a census for the comics it sees come through its offices. Explain that a little – what comics do you track? How many comics are in the census to date?

MH: Every comic book that is certified by CGC is entered into our free online census. As of December 16th, 2004, there were 518,030 certified comic books and comic magazines. There are quite a few things that have come out of the census. People track our tracking like CGC Chat Board member, Valiantman, aka. Greg Holland. He has a website called www.gregholland.com which analyzes the CGC census in really unique and thoughtful ways. It is so much fun to explore his site and really look at all the census data in this different format. Check it out!

NRAMA: For each of you, what was your own personal, "gasp" book, that is, the book that you received and gasped due to its price, condition, etc?

MH: Daredevil Battles Hitler #1, Mile High copy and Amazing Man #5, Mile High Copy. The Amazing Man #5 is a major key. CGC has only done 7 copies in 5 years. 3 of those are unrestored. The Mile High copy is a 9.4, the other 2 copies are a 2.5 and 1.0.

PL: For me it's my grail book, All-American #16. Our receiving department always let's me know when one comes in so I can go ogle it for a little. A close second is Marvel Comics #1.

SB: I'm not too impressed with grade or price as I have owned some of the best comics in the world like the Edgar Church/Mile High copy of Flash Comics #1, two copies of Action #1, and six high grade copies of Incredible Hulk #1 just to name a few. I've owned hundreds of pedigree Golden Age comics and thousands of high grade Gold, Silver and Bronze Age comics, so I only "gasp" when I see a comic that I have never seen before. I also read a new comic book every night before bed, I get just as excited seeing the 1st issue of a new series that turns out to be a great read, as I do seeing old comics.

NRAMA: Over the years, have there been any real surprises come through, that is, books that you didn't think were around in the condition they were?

MH: Detective Comics #29, Allentown Copy CGC 9.6

SB: Yeah, that book was unreal! We should not forget the Curator copy of Amazing Spider-Man #1, that was another comic that looked to good to be true. I think Tom Brulato - super collector - owns that one.

NRAMA: In the five years since CGC started, a "CGC market," that is CGC books being their own distinct subset of the back issue market, has also developed – was this anticipated?

SB: Of course. If you look at the history of coin and sports card certification, it was expected and counted on. We based CGC on the most respected leaders in certification, Numismatic Guaranty Corporation (NGC) and Sportscard Guaranty Corporation (SGC). CGC has not only followed their path, but our development has exceeded all projections in a less amount of time.

NRAMA: CGC, obviously, is not without its critics. What's your response to claims that by CGCing books, collectibles are being manufactured?

PL: Comics are manufactured in the first place, and ever since fandom began, they have been turned into collectibles. CGC is not a Manufactured Collectible. That's ridiculous.

CGC is a buying and selling tool that has made many thieves leave our hobby, has helped stabilize prices on mid and low grade books, brought an inexpensive expert restoration check to our hobby, rejuvenated the back issue market by increasing buyer confidence, created the hobby's only verified and certified authentication for signatures through our Signature Series among other things I can't seem to think of right now.

To all those with the war cry, "But you can't read ‘em!", we've spent many months and a lot of money to insure that the holder could be safely opened so the comics can be taken out and read if the owner chooses to do so. The point of certification is to protect both the buyer and the seller. Don't forget, we are all comic fans at the office.

NRAMA: That said though, with CGC, you've now got some companies offering new, uncirculated books as CGC-graded collectibles, driving up their price to, well, silly levels. What's your feeling on that, or is it a non-issue for you, in that you provide a service, and what people wish to do afterwards is up to them?

PL: What's a silly price? What is silly to one may not be silly to another. If the books didn't sell, then the price would be lower. The only price CGC sets is for our tiers of service. CGC is a service, like you said. The bottom line is that the free enterprise marketplace sets the prices. The prices fluctuate due to basic supply vs. demand. CGC has nothing to do with prices realized and CGC gets no money if the book sells for more.

CGC gets paid once; when the book is submitted for certification. We don't choose the books that are submitted to us. If we did, then we would be determining what is collectible and that would be wrong.

NRAMA: To date, has there been anything you've seen people do with CGC books that made you think, "I wish they wouldn't have done that…"?

SB: (Laughs) Use them as Frisbees?

NRAMA: In the last five years - what's been the most gratifying experience you've had with CGC?

MH: We needed to hire more graders and CGC hired the same person who hired me as an 11 year old to work in his comic book store.

Also, and most importantly, all the feedback that we get from satisfied buyers who use CGC to make sure the books they are buying really are the real thing, free from restoration and really the grade that the seller says.

PL: That's hard for me to nail down. Running the risk of sounding cliché, I'm going to say that every day is gratifying in its own way. Steve and Mark are like brothers to me and everyone at CGC is like family. I've made friends for life, not only at CGC but in the industry as well. Everyday I get paid to examine comic books and give my opinion. It is gratifying, it is a huge responsibility and it is an honor.

SB: Paul, you're still not getting a raise, so cut it out!

NRAMA: And the next five years? Do you have any goals/plans such as how the census came about in the first five? What data does doing what CGC does make available that you haven't yet tapped?

MH: A new item that CGC has made available is the CGC Registry. The Registry is on the Collector's Society website. People can go on the registry and "register" their run of Amazing Spider-Man, X-Men, Fantastic Four or Avengers. There are well over 40 different "sets" of titles that you can register for. Now the site will actually rank who has the best set of each title. There might be 60 people registered for the Amazing Spider-Man set and your set could be the 6th best out of all those people. A lot of collectors now have definitive bragging rights with respect to their collection now that the registry is up.

PL: Also in the next five years, you can expect us to work to improve upon every aspect of CGC and expand to certification of mainline magazines such as, Time, Sports Illustrated and even Playboy.




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