So for those that don't know, there has been
traditionally one really big distributor in the
comic book industry. Diamond distribution. Diamond
distribution is just massive, right? And they
owned Alliance Game Distributors. Like they they
owned a lot of different stuff and they were
for most comic book shops the primary distributor
Well diamond has declared bankruptcy Right now
here's the interesting thing about this particular
situation diamond is not a wholesaler per se
right They are a sales agent right that matches
the the comic book publishers to the stores right
so oh that got all goofy um so what ends up happening
is that diamond takes possession of these things
like comic books right and then they take them
on consignment something called consignment which
means uh you are comic publisher a I don't pay
you upfront for the comics that you give me.
I take them. I put them in my warehouse and as
I sell them, I give you your cut. Right. So now
diamonds declared bankruptcy. Right. What does
this mean? It means a lot. It means that most
of the comic publishers and the comic book stores
do not have a way of getting their comic books
into the stores okay now there's another problem
right and this is a problem with consignment
right um and that's this diamond has possession
of all this material and thus far They are holding
the inventory hostage. Okay. And so what's happening
now is that the court thus far has said, you
don't have to pay these guys as you sell this
stuff to clear your debt. So basically anybody
who sent diamond stuff on consignment Diamond
has possession of that and they are allowed to
sell that to clear their debt but are not required
To give the publishers any money Okay, there's
a great There's a great interview on ICV2 with
the head of Fanta graphics, which is in Seattle
right now. I believe they say they have a. Diamonds
got a retail inventory estimated in the low seven
figures. Right. So somewhere in the millions
of dollars. However, again, the court is saying,
nope, you can hold that. Now, somebody has challenged
that. Two Morals Publishing has filed a legal
objection to say, hey, you can't liquidate consignment
without paying us, right? Because the court has
said, yes, we can. Yes, they can. And this guy's
saying, no, you can't. because it's technically
their property because it's on a consignment
deal. This is a massive, massive mess. And if
you think it's just comic books, right, it's
not. Let's talk about Paizo. Paizo has said that
due to this distribution snafu during August
and September, the following Paizo releases will
not be available at bookstores or Amazon. Starfinder
Core, Starfinder Retail, Starfinder Special Edition.
Pathfinder, Battlecry, Pathfinder, Pathfinder,
Pathfinder. Like I'm showing you in this, in
the browser, just a huge list of stuff. They've
got a bunch of stuff that D &D owns, that Wizards
of the Coast owns, right? Because again, they
do all this on consignment. And again, for everybody
but Marvel and DC because during COVID, so Marvel
and DC used to be distributed through Diamond.
During COVID, Marvel and DC pulled out and they're
like, we'll just do it ourselves, right? So Marvel
and DC aren't part of this, but everybody else
is, literally every other, basically every other
comic publisher. So this is a giant, giant mess.
Jay, I'm going to I'm going to flip it over to
you. What are your thoughts on this whole? And
again, you're a big like weekly comic book guy,
stuff like that. You have we both have a couple
of favorite local comic shops that I'm sure are
going to be affected by this. What are your first
thoughts about this whole situation? So. One,
I am a little concerned because. And I don't
think you know this Alex, but I have been very
recently within the past week. I started reaching
out to a lot of comic book, local comic book
shops to do research into the comic business.
I'm hoping that they would share like their business
model, the finances to do research for an MBA
project that I'm working on. So I really wanted
to dig deep into the business of common books.
And now I'm just like. Great research project
now. Yeah, I think it's an even better research
project now. Yes, but I think I think I'm going
to get a lot of like, hey, this is this is really
fucked right now and we're trying to figure this
out. Sorry. It could be it could be really good,
could be a really good research project, but
or I could get a lot of like. Yeah, we don't
know if we're going to stay open or not. This
I did not know about Diamond. They're essentially
a monopoly. Yeah. And that that's what kind of
worries me that we're going to see one a lot
of like little struggling comic book shops just
close. And then I'm worried about the little
comic book. Publishers are the ones that, yeah,
they're screwed. Yeah. So yeah, my initial thoughts
is like, yeah, this is like, this is really,
this is really bad. Am I like worried about like
Marvel DC? Like not really. I think that's fine.
Um, but some of the smaller ones that I follow,
like I'm kind of like, are these, are they going
to still be around? Like, in three or four months
from now. So. Well, and again, I'll go back to
Fanta graphics. They said seven figure thing.
They say that right now, like they all Fanta
graphics, thirty five thousand dollars. And anybody
that knows anything about small business, thirty
five grand is a massive amount of money for just
this. Fanta says as of May 16th, they'd stopped
returning their calls. Right. This whole thing
is a giant, giant mess. I so something that I
will say. I like to draw. I used to be way more
into it when I was younger, started recently
getting back into it. I looked at last year,
I looked at. uh, becoming a comic book artists,
like one, what would it take? Is there like a
degree program? Yes, there is. And this is something
that really, really shocked me one to get your,
uh, I think it was a bachelor's in fine arts
with a focus and comic book art. I would spend
more money getting that degree than I spent on
my engineering degree. And your engineering degree
is going to pay you a whole lot more. By the
way, side note, I can actually introduce you
to a formal Marvel and D .C. artist if you'd
like to meet them and ask. Oh, nice. But yeah,
looking at their salary, like I would get paid
less. And then also there's no guarantee that
you're even going to going to get a job. Nope.
And I was like, wow, like this is really not
like a good kind of investment thing to try to
go for. But yeah, I think the whole people struggle
and you know, Alex, we've talked to a few people
at comic con. Um, there's some people that are
able to pull it off that go to like kind of travel
with the cons, right? They do a lot of, um, they
sell a lot of their art. They do commissions.
Um, but then you have others that aren't really
that. Diverse, uh, and they struggle. And this
is, I feel like we're going to see. Small little
comic book companies close. And again, not just
comic book companies. I'm going to bring this
back up. Green Road and Publishing, which publishes
a lot of various comic book stuff, says that
Diamond has eighty five hundred books in their
inventory with a retail value of over three hundred
thousand dollars. And if Diamond is permitted
to quote, let me get the quote here. Sell its
consigned inventory quote free and clear of liens
claims interest or encumbrances Right meaning
they don't have to give anybody any money to
sell this stuff, right? Yeah It's it's huge In
March, publishers weekly reported that Diamond
owed $9 .2 million to Penguin Random House, $1
.7 million to Consumer Products, $500 ,000 to
Lunar, as well as additional funds to publishers
like D &D's Wizards of the Coast. Just wow. Yeah,
this is going to be interesting to see how this
plays out because I don't think there's a whole
lot that some of these companies can do. I mean,
like they can sue. They can sue. That's just
it. It'll be a legal fight. Like and how much
money they got to spend on lawyers to get this
done. Yeah. Couple of things I think you're going
to see out of this is one. I think you're going
to start seeing random RPG show up at fucking
discount stores. You're going to head over to
the dollar general. They're going to have copies
of Pathfinder for 10 bucks. Right, um And that's
where a lot of shit goes The other thing that
I think is is is that we need to take into account
here and coming from I published a role -playing
game owned a game store All the companies up
and down the chain in this in this physical media
market whether it's comic book stores gaming
stores, etc to distributors The margins are so
tight and there is zero room for error, right?
So you get yourself into a bad situation that
what and you're just you're done. You're you're
toast. Right. It just. It crushes you. Right.
Somebody in the chat talking about Paiso Paiso
CEO Jim Butler says, quote, Please support your
favorite game and comic publishers by buying
directly from them or going to your favorite
LGS and asking them to order for upcoming releases.
Right. For gaming, for tabletop gaming, the upside
is there's other distributors. There's MagEx,
there's GTS, there's Southern Hobby, there's
Peachtree. the tabletop space while this is gonna
screw a lot of tabletop companies believe me
because diamonds screwing them there at least
are other Distributors out there who carry this
stuff and can can get money to your favorite
tabletop Really? This is gonna hurt the comic
book guys. This is just all the small publishers
are screwed And again, they don't have the money
for a shit ton of lawyers And by the way, if
you know anything about bankruptcy proceedings,
they're gonna get in line Right chase says chase
bank has a 45 million dollar line of credit out
to diamond who you think is gonna get paid first
Yep Because you know what chase has lawyers and
they'll pay their lawyers Three million to recover
30 million of the 45 that they're owed and then
they'll write the rest off as a tax deduction
So pour one out for the guys we love them Boy
oh boy Jay any other final thoughts on this on
this story before we move on to our next Actually
kind of nicer story sucks. Yeah, it just sucks
like yeah Stay tuned as we watch this develop.
This is probably a story that will update a bunch
as it moves to the courts and things like that.
So I'm gonna keep my eyes open on this one. So
yeah, stay tuned to this channel for more updates
on this.