Diamond Comics Distributor Has Filed for Chapter 11
I’m honestly rather shocked it took this long. But the company that is arguably the most responsible for the entire American comic book industry failing has failed itself.
From Business Wire:
Diamond Comic Distributors (“Diamond” or “the Company”), today announced that it has filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Maryland to facilitate the restructuring of its business. As part of the restructuring process, Diamond has received a $39 million stalking horse bid from an affiliate of Universal Distribution (“Universal”) for Alliance Game Distributors.
The Company has received commitments for up to $41 million in debtor-in-possession (DIP) financing from JP Morgan Chase that will be used to fund post-petition operating expenses and ensure adequate working capital to meet its obligations to associates and suppliers.
In addition to securing DIP financing, and a stalking horse bid for Alliance Game Distributors, Diamond has received strong interest in its specialized business divisions, having also entered into a Non-Binding Letter of Intent (LOI) with Universal to acquire Diamond UK. Diamond is actively pursuing offers for, and has received interest from potential purchasers for, its other business units, including Diamond Book Distributors, Collectible Grading Authority, and Diamond Select Toys, as well as its main comic, toy, and collectible distribution lines.
In a world before the comic book shop the only issues available to you were the ones that were on the turnstile. If you were following a prolonged story arc and your local Five and Dime didn’t carry it that month you just plain missed that episode of the story.
Your only hope of being able to catch up with it is if you were enough of a nerd to go to a comic book convention. There you would find a herd of tubby guys who loved comics enough to load up a bunch of long boxes into their creepy-ass windowless vans (with bad mural art on them) and drive from convention to convention. The more sensible ones had day jobs to support them but they all wanted to make it in comics and it just wasn’t going to happen for them due to the fact that the openings were very limited.
Then in the early 1970s, a guy named Phil Seuling got DC and Marvel to agree to a new system in which he would act as their middleman. They didn’t actually have one that was dedicated strictly to comics before then.
That changed everything for the comic book guys. The first comic book shops of the Seventies flopped but they paved the way for the totally gnarly comic book shops of the Eighties. Now these shops, by comic book nerds for comic book nerds, created a marketplace for independent comic publishers.
Titles like Elf Quest, Rocketeer, and Teenage Mutant Ninja Turtles began appearing on their shelves, (which were actual shelves). I admit I am viewing these stores through rose-colored glasses, but I did love them back in the day. It was a place you could go and hang out and the owner would hate you for not having a shopping agenda. Although, the owner was just doing this store thing until his comic book about a Fat Ninja (that was real) took off.
As with all things that are expanding too fast, there came a crash. A lot of the comic artists decided it was time to let the dream die and got real jobs. There was a Gaiman-inflated second bubble of adult-oriented comics in the 1990s. This led to another crash about the same time Sandman ended its run. Fairchild couldn’t keep their doors open.
I tried
There was a system of multiple distributors in place for a while. And by multiple, I mean more than one. However, the various comic book crashes took out the rival distributors. DC Comics (which is to say Warner Publishing) tried to take it all over. The short story is that they failed, which left Diamond Distributors as the only game in town. Diamond has held, (up until quite recently), the monopoly on comic shop distribution. The problem with Diamond is the same problem every monopoly has, inherent inefficiency. Technically they have to make a profit to stay in business but they never have to work all that hard for it, so they don’t. Also, they collect parasites like a dog collects fleas. “Your cousin Marvin lost another job, couldn’t take him on as driver or something?” Consequently, the comic book price soared to a ridiculous height for what is in actuality a 24-page pamphlet.
The comic book industry did absolutely nothing to future-proof itself. There was the occasional and halfhearted attempt to attract younger readers but after a while, they gave up on what had been their traditional market and just concentrated on bald tubby guys with ponytails and BO.
It was a dying market to be certain but why would that matter? The comic books themselves weren’t valuable but the intellectual properties damn well were. Once X-Men came out the future became obvious and that future was being a parasite on a corporate body that was so vast that the annual losses for comic book divisions were basically a rounding error.
And that was before DC and Marvel got barnacled by SJWs who didn’t give a fuck about the characters they had taken over.
So long as Warner and Disney were doing alright, DC and Marvel would be just fine.
This was all before Covid-19.
When the Covid lockdown first hit back in March of 2022, Diamond Distributors went into bunker mode and announced they were halting all deliveries and they weren’t making any disbursements to the publishers either. Marvel didn’t seem to care all that much, they were still able to operate off of the old system of corporate parasitism. Marvel Comics was just fine because Disney didn’t care. But DC had the vast misfortune to have passed into the cold unfeeling clutches of AT&T.
To the abject horror of DC Comics employees, Ma Bell told them she wanted results or else.
DC announced it was severing all ties with Diamond and hiring its own distribution system.
This sent the comic shops that couldn’t open into an apoplectic fury. One thing that Diamond had brought to the party was a very generous payment plan system that amounted to letting comic shops buy on credit. Since these are the same shops that said, Arkhaven readers “aren’t our customers!” I suppose it was technically none of our business but it was amusing to watch them flail. Anyway, the California shops were pissed AF that some shops in other states were going to be getting new comics when they couldn’t even open their doors. And held quite the tantrum over it.
DC went forward anyway, and USC and Lunar became their new distributors. There were, however, a lot of questions at the time about these guys’ ability to handle the job.
The answer to those questions was, “No, they can’t.”
DC announced that in defiance of the entire history of comic books that they would now accept returns of unsold comics. Up until then, the comic shops were stuck with whatever they bought whether it sold or not. If a comic didn’t sell, they either threw it out or put it in the $1 long box. Now there is an option (B) for DC comics only.
USC suddenly became a lot less interested in being a DC distributor when they found out about shops being able to remainder unsold merch. They were out. This left Lunar as DC’s distributor and so they remain.
However, I don’t know what the future is going to hold for Diamond now that they are bankrupt. They haven’t ceased operations. But whenever a company files for Chapter 11 disbandment is on the board. Nor for that matter do the publishers who delivered their goods to Diamond know if they are going to get their money. If its track record during Covid is anything to go by the answer is “no.”
I won’t say it’s the end of the comic shops because the ones that are still in business have made comics a secondary if not tertiary income stream. But I strongly suspect this is the end of a business model that was shuffling along zombie-like and has finally fallen over the edge of a cliff.
