This excerpt reprinted with permission from Alan Mendleson, the Moneyreporter
We hear so much about crime in sports: There are boxers who bite ears, and hockey players who assault other players, and boxers who fight outside the ring, and hockey players who assault fans, and baseball players who are linked to gambling, and basketball players who might miss baskets on purpose to help gamblers win the spread, and boxers who may not fight when they are supposed to fight in the ring. And... you get the picture.
But there are other sports crimes that we don't hear so much about but insiders are well aware of: these crimes are in sports collectibles.
Many of the nation's top sports collectibles dealers were at a big sportscard and collectibles show this past weekend at Hollywood Park, in Inglewood, California, and they all shared this view about the crime of counterfeit collectibles, especially autographs: it's out of control and way too extensive. Most of the major dealers also shared the view that seventy percent of the autograph memorabilia on the market today is fake -- counterfeit. Seventy percent.
Unfortunately, say the dealers, prosecutors and police don't have the resources to stop, prosecute and jail these criminals because they're too busy with violent criminals. So stopping the fraud is being left to the sportscard and memorabilia industry itself.
Third Party Help
One way to help detect fraud and to put the counterfeiters out of business is to deal in authenticated collectibles which are inspected and certified by independent, third party judges. These are cards and autographs that honest experts inspect, certify and guarantee as authentic. PSA, also known as Professional Sports Authenticator, is an industry leader and is known for inspecting and certifying sportscards, grading them (grade or condition affects value), then sealing them in tamper-proof plastic holders.
Now, PSA is using DNA to authenticate and guarantee that balls, jerseys, programs and photos that bear signatures are indeed authentic. A PSA official will witness these memorabilia signings, then dab the article with a DNA solution that is invisible to the eye but can be "read" with a special laser light. The DNA is synthetic-- and matches no animal or human on earth-- and could not be reproduced without a super high-tech lab and millions of dollars, putting counterfeiting virtually out of reach of the criminal element.
The cost of certification and authentication can run between ten and thirty dollars per article, and these days, when a Mickey Mantle baseball card can fetch as much as $100,000 or a Duke Snider autographed baseball can sell for $100, the expense of authentication can be worthwhile and wise.
The Growth of the Authentication Business
Business is booming for PSA. In August of last year it had 15,000 sportscards submitted for its certification business, but during March business had boomed and some 110,000 were submitted. Business is so good, that "graders" are being recruited by PSA to handle the work and they are being paid between $100,00 and $350,000 a year each. Parents, if your kids have a love affair with sports cards, this might be the career for them. Meanwhile, the sportscard business has grown to a $750-million a year business, and the sports collectibles market is now valued at one billion dollars a year in sales. The industry is booming because of several reasons, including a stronger economy which has increased consumer disposable income, and the rising stock market which has created more capital for investing in hard assets including cards and collectibles.
The growth of the collectibles business may also be helped by the certification industry. With third party certification services available, more investors are feeling confident to put their money into collectibles. Third party certification services mean the investors no longer have to depend solely on the "promises" and opinions of sellers; and the third party certifications give investors more assurances when they spend their money.
For more information about PSA call (800) 325-1121.
Alan would love to hear from you. You can email him at [email protected]. If you're in the Los Angeles area, you can watch his financial and best buys reports on KCAL-TV channel 9, and listen for them on KFWB Radio, News 98. You can also hear his daily best buys reports on KFWB's website at www.kfwb.com by clicking on the listing for Noon Business Hour.