Yesterday, I read a very interesting thread in Coin World about the PCGS/Dave Hall/Hibernia Norweb bru-ha-ha. At the end of the thread there was mention that the PNG was going to endorse NGC and drop PCGS. Could some of the dealers on this forum comment as to whether this is true and why? Did this Hiberia Norweb thing have anything to do with it? By the way, the thread was fascinating reading. It seems like Mr. Hall had "Martha Stewart" syndrome by subbornly refusing to admit a $1,500 mistake at the expense of a multi-million dollar firm's reputation.
PNG is now recommending NGC. So does the ANA. NGC pays a fee to be the authorized grading service. So how much does that mean? A paid endorsement is just that. No different than any late night TV paid programming.
As a member of the CU forums, I read all the threads and posts regarding the Norweb/PCGS " problem" as they were occurring. There was much debate both pro and con regarding PCGS response (or lack of) addressing the issue. The full story will never be known to the general public, as I believe both parties reached a settlement that included no disclosure by either side. The original thread faded away. The latest fiasco on the CU boards was the fact that PCGS lost the endorsement to a higher bid by NGC. Mr. Hall was so upset by it that he threaded a statement that, in essence, accused NGC/ANA of collaborating and conspiring behind his back, posted the final bid amounts, and said something to the effect..."I guess anyone can buy respect." He was so taken to task by the thread that he edited out portions of it. AND also edited out portions of the three responses an ANA spokeperson posted. What with the articles and full page ads he took out in CoinWorld basically voicing the same sentiments shortly after these posts, it was considered by many that DH couldn't let it drop and further lost much personal respect by CU members/dealers. Up til DH made his statement regarding losing the endorsement, very few knew that PCGS had also been the high bidder for the ANA endorsement 5 years hence when he "bought respect".
Well Mr. Hall has lost a business decision. While it will hurt PCGS in a small way, it was a big step for NGC. Not so much in the inner circles of the hobby, but more for the fledgling collectors. It will give them a big boost on TV shopping channels, and Sunday mailers. Until the ANA and PNG choose a grading service based on merits their particular endorsements will mean very little to the hobby as a whole.
Since I wrote a large part of what you read - I can say yes - it is all true. And the comments made by spy88 are also true. I wrote articles on both subjects. If you would like to read them rbm - send me a P/M and I'll send you links to the articles
If it is the two articles you posted on the thread I read, then I have read them -- fascinating reading as well. ND seems to imply that the PNG endorsement switch is not that signficant, that it was driven primarily by $$$$. What would be enlightening perspective from the dealers here is how is the dealer community aligned vis-a-vis PCGS and NGC. From my somewhat limited perspective from reading books, I was under the impression that the larger dealers favored PCGS, and the "mainstream" dealers favored NGC (just an impression, no real factual basis). I was also under the impression that several large dealers had ownership in PCGS, but now that it is publicly traded, that may be less of an issue. So my first impression of the PNG switching to NGC was that there may have been a significant shift in dealer alignment with grading services. Anyway, now that both the ANA and PNG symbols will be on the NGC holograms, that appears, on the surface to be a significant competitive advantage. The answer probably is "we will see". Final question: from reading on the subject, I am still unclear about independence policies for the grading services. My understanding is that PCGS graders and executives can deal in coins (an apparent conflict of interest) and the NGC intially did not allow such personnel to deal in coins, but relaxed that somewhat to allow execs (i.e. Mr. Albanese) to deal but not graders. IGC claims independence, but I have no clue how strict thier independence standards are. Perhaps there are some "inside" rules (i.e. graders cannot grade their own coins, Dave Hall cannot grade his own coins, or only Dave Hall can grade his own coins), but I do not know what they are.
I can't speak for all dealers, but here is how it works in private. A coin will be submitted to whichever service the best grade can be obtained. After submitting thousands of coins, you have a good idea of what you will get when you send it in. If the coin will go the same in either holder, it comes down to price. PCGS has a much better retail price on most coins. Rarities do not apply. Publicly, authorized dealers must adhear to certain conditions. There is plenty of politics in this business. Both the ANA and PNG will apply these rules when and to whom they feel. They are not for one and all. I will ask you this, do you believe that when Mr. Hall submits a coin that the same grading standards apply? Most dealers agree that NGC has a better grading system in place. The coins are more consistently graded at todays standards. This has changed and will again. The market place dictates to us whom we use. The customers who compete in registry sets are forced into one group or the other. NGC took a big step in allowing both services. So how does the PNG or ANA endorsement effect you? Did any collector shy away from NGC slabbed coins last year, just because PNG was recommending another service? NGC has slabbed 10 million coins. Do they really need an endorsement? If ACG bought the endorsement, would it make them the best company? Would you rush to buy their coins because of that endorsement? One last question. If someone can buy your opinion, what is it really worth? Honesty doesn't need to be bought.
ND, I agree that the endorsements are not that meaningful if they can be "bought". However, not everyone knows that $$$$ are the primary driver, and I did not know until you mentioned it. So the endorsement might lead one to believe (as they did me) that certain standards are considered in making the endorsement. That being said, do you really think the PNG would endorse AGC, PCI, NTC,or SEGS, even if they paid double?? I somewhat doubt they would even enorse ICG or ANACS for bigger $$$. Is the ANA for sale, too?? Here's a strange one . . . what if the ANA endorsed ANACS??? The acronym would mean something again!
Well look at it this way. Why would the ANA or PNG not accept the highest dollar? As sad as it is, this hobby is driven by money. Ethics and endorsements are sold to the highest bidder.
Well, there is the golden rule, right? All things being equal, a company/organization will accept the bid with the greatest value (vis-a-vis-money). Why does NBC get the Olympics, but ABC/FOX gets the Superbowl? I know that this borders on herasey, but if NCG and PCGS cannot be distinguished from their end product (graded coins) then why wouldn't the ANA/PNG go for the highest bidder? After all, we are collectors who will buy the cheaper but equally valued and graded coin. Why not the other way around?
The bottom line is this - the endorsements are nothing but a marketing ploy. They always have been. This is something I would like to see change. Take any endorsement - the UL of Underwriters Labortories or the GH of Good Housekeeping Seal of Approval. Do you think the companies that receive these get them for free ? These endorsements are only given to products and companies that pay BIG bucks for testing in order to get these endorsements. What I would like to see is for these organizations - the PNG and ANA - to provide their endorsements to any grading company that meets a certain set of standards - not who writes the biggest check. Don't get me wrong - I have no problem with paying for the endorsement. For confirming that the grading company follows a set of standards cost money. And this would be required if my idea came to pass. It would be but one part of a series of reforms I would like to see in the grading industry.
Is it possible that this happens already, but in an informal process? (ANA/PNG setting minimum standards for those that are considered for the endoresement)
Well - to the best of my knowledge - no this is not the case. Let me illustrate by quoting a statement made by John Feigenbaum, a member of the Board of Directors of the PNG back in April. " The main reason why PNG allows sponsors (and why I think it's a good idea), is that -- like other non-profit industry orgs -- we are always running a deficit. What a boon for us that a major grading service will sponsor us which helps us create more programs and do positive things for the hobby. " Mr. Feigenbaum also went on to say this - " It has even been suggested by officials at PCGS that we allow multiple grading services to become sponsors in future years. I think that's a great idea, but it was never proposed until this contract was closed. " I find this comment that it has never before been suggested just a bit strange. For I myself suggested it to the PNG back in 2001. But I guess my voice doesn't carry as much weight as the voice of PCGS
