Is There Serious Trouble At CGC?

The month of October was a very strong one for submissions. But that does not necessarily mean that the entire grading sector is healthy nowadays, far from it.

PSA is so dominant that it seems on the verge of swallowing up the competition. There are signs of weakness particularly at CGC, which specializes in grading comics. We are seeing significant downsizing there and murmurs of further steps in that direction.

But how serious are these problems? Could the company be on the verge of shutting down, or are these more temporary struggles? What does the entry of PSA into the comic book grading space in 2025 mean for the industry? We have the answers in our overview of the serious trouble at CGC.

The Firing Of CGC Mike Signals Serious Trouble At CGC

Though CGC is not one of the preferred sports card grading companies. They are very popular in the comics space and have a loyal following there.

A lot of the interaction between regular users and the company takes place through the CGC Forums, hosted and run by the company. They are worth checking out if you are into comic book grading.

They also have some fairly good discussions on CGC sports card grading. Perhaps the best way to understand what this forum is for us sports card collectors: is that it is the comics equivalent of the Blowout Forums.

However, it differs in that it has direct ties to a grading company (rather than a sports card seller) and was used by CGC to manage customer relations.

The company employed a liaison there to serve as the face of the company in the forums. An individual generally known as CGC Mike, who was beloved in the community and provided quick and accurate answers to the users of the forums.

Whenever there was a controversy or problem with the company and its performance, he served as the liaison and mouthpiece for the company.

By all accounts he handled these situations very well and therefore had a special status in the community. I know we would like to have someone similar working for PSA, SGC and even Fanatics!

How the problems at CGC came to light

On Thursday, a thread appeared on the forums alerting users that CGC Mike had been fired. According to the user named skypinkblu, this is what happened:

“Hi, I just got a call from Mike, who asked me to post because the CGC Mike account has been disabled. He was told just now that CGC is having some personnel layoffs and his item was one of the ones that has been cut as of today. He doesn’t know how many other people are involved, but he was not the only cut. Kind of a shock, I don’t have much other information.”

The thread had 575 comments, almost all of which were people expressing distress and dismay. Including some amusing memes featuring their hero, CGC Mike.

The petition to reinstate CGC Mike

The petition by CGC Forum members to have CGC Mike reinstated read as follows:

“Dear Matt and Harshen,

We were shocked and dismayed to find that our forum moderator Michael Greenwood (“CGC Mike”) was terminated this week. Michael has been the soul and backbone of the forums for years now. He’s done an excellent job of moderation and has earned the respect of collectors across the board for his even-handed policies.

Mike’s presence on the forums and role as a liaison to your team over the last few years have been a significant part of the rebuilding of trust between the forum collectors and CGC. I personally have watched in real time countless times as he’s turned disgruntled customers into satisfied ones, and have received similar firsthand stories via PM over the course of organizing this petition. We don’t feel he’s easily replaceable, and as an aside this has led to larger concerns about the future of the forum community. 

The shock was compounded by hearing that Michael was abruptly locked out of his own moderation account, and the firing took place in the middle of a grading contest with 100+ contestants, a quarterly contest that he has nurtured and put a great deal of his after-hours time into in the last few years. Quite frankly, it’s shabby treatment of a lovely guy that has given his heart and soul to the forums.

We do understand that at the end of the day CGC is a business and that there are times business decisions must be made, and perhaps there is context that we’re not privy to. Fair enough. Even so we hold out hope that there is another way, a way that supports and respects the wishes of CGC’s longtime fanbase.”

Signs of Financial Trouble At CGC

We don’t have access to the CGC balance sheet here and companies don’t go around advertising that they are in trouble. That just isn’t how things work. But layoffs are often a sign that there is trouble in paradise.

That is not the only indication that there are issues at the vaunted comics grading company. We have also seen a lot of promotions and sales in recent months, some of which have reeked of desperation, honestly.

The reason seems to be that while sports card submissions were up in October, the same was not true for comics. One user posted the following:

 “Ran the numbers for October 2024 and the CGC Census addition rate per month is trending down below pre-COVID levels. Last month was only 50,266. This is from CGCDATA.COM which tracks the number of CGC Census Additions per month (a decent approximation of the number of submissions processed per month). Blue line is Actual, Orange line is 6 Month Moving Average since Dec-2019.”

You can see that since June 2022 the number of submissions has been decreasing steadily. It is now around the point where it was during the pandemic.

That is linked to a demonstrable decline in the value of comic books on the open market. Because the grading of comic books is generally more expensive than with sports cards (there is more to check and they are more difficult to handle), the margin for profit is smaller. So submissions in this sector are more sensitive to price changes than the sports card market.

A culture problem at CGC

I talked to a source at the company and they confirmed that several layoffs at different levels occurred at the same that CGC Mike was removed from his job. The estimate this individual provided was that 15 people had been made redundant in the downsizing.

This wave of firings was focused primarily on support staff. However, in the past, CGC has quietly let go of a portion of its grading staff as well. That means that customers will now be “enjoying” worse support and lower quality grading, possibly with higher wait times.

As background, CGC was bought by Blackstone Tactical Opportunities in 2021. That may sound like the name of a mercenary group committing war crimes in Africa somewhere, but it’s a major investment company (billing itself as an alternative investment company, whatever that means).

In essence that is the heart of the classic heartless corporate world that looks at companies like this as a bottom line. Sure, every company does that. But investment firms and hedge funds like this are particularly ruthless in this regard.

They are known as the kings of the leveraged buyout, and took advantage of the 2008 financial crisis to strong arm control over companies like Hilton and Travelport.

So with more than US$1 trillion in total assets under management in their various portfolios, CGC is of very little interest to them. Unless it is making money, it is worthless. Say what you want about PSA and Fanatics, they have a far deeper involvement and understanding of the hobby they are part of.

What does this mean for the problems at CGC

There is a general sense that the company is now being run by people “without a real understanding of the comic book industry.” The source, who prefers to remain anonymous also stated that they have “one foot out the door” and are actively looking for new employment.

The source also lamented that they now have fewer people grading and the ones remaining now have higher quotas. Therefore, they are checking the comics with less attention to detail. “We are getting fewer submissions and now we are also grading them worse. What could go wrong?”

Meanwhile, the company appears to be trying to get cheaper labor elsewhere. They are recruiting people from a nearby high school. At a career fair at a school nearby in Florida, they were trying to attract young graduates from the school.

In a post by bronzeagebryon, a local on Instagram, he wrote: “Had a career fair at school this week. Guess who had a table to hire “High School” students? Looks like everything will be 9.8’s if that’s the easiest way to do it. Context: CGC is about 7 miles from the school where I teach.” To which another user replied, “…really….that definitely describes their talent.”

Confirming the culture problems At CGC

One commenter on YouTube claiming to have inside knowledge seemed to confirm what this source told us. They wrote:

“The amount of employees there that have never even been to a comic shop let alone read a single book that continually damage books because CGC is too busy dealing with their multitude of QC problems to actually train anyone on the proper handling of books. Also the place is crawling with miserable people who constantly talk trash about the customers and actively hold resentment towards all of them for making them actually do their job. And don’t even get me started on the terrible “popularity contest” system they have for being promoted, you could be the BEST worker in that building but if you haven’t kissed at least 12 people’s asses you are getting nowhere. So if you ever wondered why your books got damaged or you got the wrong information on a label, it’s probably because the people verifying these books don’t actually know jack dick about comics, they are just buddy buddy with the people who handle the promotions.”

My guess is that this individual does indeed work at CGC. However, this is not my source. Though what they say is quite similar.

What this means for the future of CGC

While PSA flourishes in the sports card and TCG market, it is clear that CGC is struggling. The firing of a few employees late in the year is not necessarily a sign that the company is in terrible condition. But if we add the declining number of submissions since 2022, we get a more concerning picture for the company.

They are making some headway with cards. In October, the company had a 43% increase in submissions of cards. That brought them to 207,000 overall, making CGC the second most popular company for card grading. About 40,000 a month more than SGC. But they are utterly dwarfed by PSA with close to 1 and a half million submissions in the same month.

Indeed, many in the comic book-collecting world are waiting for PSA to enter that market. In July 2024, PSA announced that they will start grading comic books at some point in 2025.

According to their website: “In 2025, PSA will begin a new chapter in its heritage-rich hobby history with the introduction of comic book and magazine authentication and grading, along with comic book and magazine pressing.

From Superman to Spidey, Thor to Thanos and Bruce Wayne to Bruce Banner, comic books have played a pivotal role in pop culture for a century. It only feels right for PSA to expand its offering to include some of the most important collectibles in the hobby.”

Right now it feels like PSA will be able to easily overtake CGC as the main avenue for comic book grading. While there is a high degree of customer loyalty to the company built over the years, their recent performance will not help. The firing of figures like CGC Mike will not help either.

Final word on the troubles at CGC

The folks at CGC have had over two decades to build a strong relationship with the comic book community. To some extent, they have done so.

However, the entry of Blackstone into the equation in 2021 seems to have transformed the company into a soulless corporation worried only about the bottom line. The firing of CGC Mike is just a symptom of a deeper malady.

A company in a passionate space of collectors that does not understand or connect with its community. That leaves an open space for PSA to enter the equation and dominate.