For Better or Worse, SGC Sheet Cuts can be Game Changer

SGC Announces it will Professionally Cut and Grade Cards from Uncut Sheets

So, I was minding my own business today, doing some work on my newly-established Dwight Gooden card collection when I received an interesting email.

Said email was from SGC and I typically get messages from every month for the monthly specials. But a closer look revealed something else entirely. SGC made a pretty significant announcement today that they were essentially getting into the business of cutting cards.

Now, to be clear, the real emphasis will be on grading those cards, obviously. And, as full disclosure, they will not be doing the exact cutting themselves. Rather, they will oversee the cutting process performed by a printing company. But SGC will perform a service that no major grading company has yet to date – and that’s to professionally oversee the cutting of uncut sheets to render what should be very high-grade cards.

Interestingly, I recently wrote about this very topic with regards to strip cards, offering up my thoughts on the idea of those issues receiving numerical grades as opposed to the Authentic designation.

When cards were originally cut in the pre-war era, they were mostly, of course, cut from uncut sheets. Nothing new there, really. But the catch here is that great attention to detail will be paid as these sheets are cut up. That’s because, today, the cards are worth a lot more than when they were simply novelty items in the past. Cards that were hastily cut in the past will be now cut with precision using today’s modern methods. Is that necessarily right?

And another ethical question being asked here is if a company should be able to grade cards where they are overseeing the cutting and have a hand in that side of it. It’s not quite the quandary of, say, grading cards you own yourself, obviously. But that aspect of it is certainly going to at least be noticed by collectors, even if there’s nothing really nefarious there (which I don’t think there is). Many collectors will see this as SGC doing the actual cutting, even if that isn’t really true.

If you own pre-war cards, you know that quality control during the cutting process wasn’t always, um, the best? Many cards were printed and cut well. But many were not, resulting in all sorts of things, such as diamond cuts, off-center cards, and the like.

Frank Nagy T204 Ramly Walter Johnson

Here’s the thing. The reason this will raise eyebrows is because one can wonder if utilizing current cutting methods to yield high-grade cards is all that acceptable. But that’s not even the point, really. Regardless of whether you deem this to be on the up and up or not, we already know that such cards are in fact treated very differently by collectors. Collectors generally have decided that cards recently cut from sheets should be as valuable as cards that were cut in the period they were printed.

It’s not as if cutting previously uncut sheets of pre-war cards hasn’t been done in more modern times. Several have tried, likely to varying degrees of success. But we know that these types of cards are seen as less valuable.

An old collector named Frank Nagy once owned an incredibly rare uncut sheet of T204 Ramly cards said to be the only known one in existence. Those cards were then subsequently cut with many (most?) earning high grades. However, cards known to be cut from that sheet have sold for significantly less than other high-grade cards that were cut when first printed and simply survived without enduring any real damage (as a very brief aside, as I mentioned on Sports Collectors Daily, SGC is actually hoping to digitally recreate the Nagy sheet – very cool).

At any rate, collectors certainly view these cards differently. This PSA 9 from the Nagy collection sold for just under $59,000 in 2014. Meanwhile, a ‘regular’ PSA 8 sold for more than twice that this year. Some of that may be due to the time period as the Nagy sale was from a few years ago. But much of the disparity in price is certainly due to the card being a recent sheet cut.

Now, because recent sheet cut cards are seen as less valuable, SGC is trying to make it abundantly clear to potential buyers what exactly these cards are/will be. To make it known to collectors that the cards were recent sheet cuts, they will slab them with a special label marked Sheetcut. But while that’s a good idea, it’s not exactly foolproof.

That’s because collectors are known to crack cards from cases for any number of reasons. Collectors like me do it because I’m generally dealing with low-grade cards and I prefer to store them in binders. Others crack cards with the hopes of getting higher grades by resubmitting them. But it’s a third classification that worries me.

What’s to prevent someone from taking a less-graded, high-dollar SGC sheet cut card, cracking it open, then sending it to, say PSA or Beckett in hopes of removing the sheet cut stigma? If said collector cracked it and tried to resubmit it to SGC to get the grade without the Sheet cut designation, that likely wouldn’t work. SGC will presumably track these things very closely and be able to see it is the same card. But, without some kind of collaborative effort with PSA and Beckett, how would they be able to tell it’s a recent sheet cut and, thus, know to label it as such to avoid drastically altering the true value?

Babe Ruth PSA 9 1933 GoudeyLet me propose this example. Joe Collector sends a sheet of 1933 Goudey cards to SGC to have cut. SGC has the cards cut and Joe finds out he has a PSA 9 Babe Ruth. This PSA 9 shown here just sold from Goldin Auctions in August for a little over $300,000 but let’s say that his SGC version is worth, I don’t know, $200,000 because of the Sheetcut designation. Joe then gambles, cracking the card open, freeing it from the case and submits it to PSA. PSA then grades it a 9 without any such designation and drastically raises the value if it doesn’t know it is a recent sheet cut.

That might be an unreasonable example. I expect word travels quickly on high-dollar cards like that so PSA might figure it out. But replace Ruth with, say, Paul Waner. You can see how the market would suddenly have a greater number of high-grade cards without the sheet cut designation.

At a minimum, too, you can expect to see fewer uncut sheets in existence because you can be that some people will be taking advantage of this service. That’s particularly true if they have a high-dollar card on the sheet in great condition. I don’t know that that necessarily bothers me personally. I think it’s cool to see old uncut sheets but without any real skin in the game, I’m less bothered by it. But if you really enjoy seeing things like uncut sheets or even collecting them if you’ve got the funds, my guess is that some are going to be lost to us to be cut into singles.

Further, I’d be concerned that this could snowball into affecting other cards. Say you are the owner of a high-grade PSA card without a sheet cut designation. Will potential buyers be a little more wary about your card, fearing it could have been a recent sheet cut, particularly if it was graded after the SGC service begins? I can see that. Probably less of a concern but something I’d throw out there.

I’m very intrigued by the whole thing. I don’t know that it’s the end of the world as some might view it. But I can also see problems with it, too. If recent sheet cuts were truly valued the same as cards that were cut back in the day, it’d be mostly a non-issue. But we know that’s not the case and, because the cards can be cracked open and then resubmitted elsewhere, it’s easy to see how problems might arise if PSA and Beckett are unable to tell they are recent cuts and/or don’t label them as such.

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