WEBVTT 00:00:00.000 --> 00:00:03.319 So for those that don't know, there has been 00:00:03.319 --> 00:00:06.559 traditionally one really big distributor in the 00:00:06.559 --> 00:00:11.939 comic book industry. Diamond distribution. Diamond 00:00:11.939 --> 00:00:16.399 distribution is just massive, right? And they 00:00:16.399 --> 00:00:23.120 owned Alliance Game Distributors. Like they they 00:00:23.120 --> 00:00:25.820 owned a lot of different stuff and they were 00:00:25.820 --> 00:00:29.600 for most comic book shops the primary distributor 00:00:29.600 --> 00:00:37.200 Well diamond has declared bankruptcy Right now 00:00:37.200 --> 00:00:40.359 here's the interesting thing about this particular 00:00:40.359 --> 00:00:45.039 situation diamond is not a wholesaler per se 00:00:45.039 --> 00:00:50.789 right They are a sales agent right that matches 00:00:50.789 --> 00:00:54.450 the the comic book publishers to the stores right 00:00:54.450 --> 00:00:59.590 so oh that got all goofy um so what ends up happening 00:00:59.590 --> 00:01:04.409 is that diamond takes possession of these things 00:01:04.409 --> 00:01:10.409 like comic books right and then they take them 00:01:10.409 --> 00:01:13.090 on consignment something called consignment which 00:01:13.090 --> 00:01:17.219 means uh you are comic publisher a I don't pay 00:01:17.219 --> 00:01:19.540 you upfront for the comics that you give me. 00:01:19.959 --> 00:01:22.900 I take them. I put them in my warehouse and as 00:01:22.900 --> 00:01:29.420 I sell them, I give you your cut. Right. So now 00:01:29.420 --> 00:01:33.620 diamonds declared bankruptcy. Right. What does 00:01:33.620 --> 00:01:38.700 this mean? It means a lot. It means that most 00:01:38.700 --> 00:01:42.319 of the comic publishers and the comic book stores 00:01:42.319 --> 00:01:46.540 do not have a way of getting their comic books 00:01:46.540 --> 00:01:52.739 into the stores okay now there's another problem 00:01:52.739 --> 00:01:58.159 right and this is a problem with consignment 00:01:58.159 --> 00:02:07.739 right um and that's this diamond has possession 00:02:07.739 --> 00:02:13.099 of all this material and thus far They are holding 00:02:13.099 --> 00:02:20.620 the inventory hostage. Okay. And so what's happening 00:02:20.620 --> 00:02:30.939 now is that the court thus far has said, you 00:02:30.939 --> 00:02:35.620 don't have to pay these guys as you sell this 00:02:35.620 --> 00:02:43.810 stuff to clear your debt. So basically anybody 00:02:43.810 --> 00:02:48.189 who sent diamond stuff on consignment Diamond 00:02:48.189 --> 00:02:51.030 has possession of that and they are allowed to 00:02:51.030 --> 00:02:55.830 sell that to clear their debt but are not required 00:02:55.830 --> 00:03:05.389 To give the publishers any money Okay, there's 00:03:05.389 --> 00:03:09.509 a great There's a great interview on ICV2 with 00:03:09.509 --> 00:03:11.830 the head of Fanta graphics, which is in Seattle 00:03:11.830 --> 00:03:20.310 right now. I believe they say they have a. Diamonds 00:03:20.310 --> 00:03:23.389 got a retail inventory estimated in the low seven 00:03:23.389 --> 00:03:29.770 figures. Right. So somewhere in the millions 00:03:29.770 --> 00:03:38.969 of dollars. However, again, the court is saying, 00:03:39.270 --> 00:03:42.430 nope, you can hold that. Now, somebody has challenged 00:03:42.430 --> 00:03:46.189 that. Two Morals Publishing has filed a legal 00:03:46.189 --> 00:03:52.449 objection to say, hey, you can't liquidate consignment 00:03:52.449 --> 00:03:55.590 without paying us, right? Because the court has 00:03:55.590 --> 00:03:58.189 said, yes, we can. Yes, they can. And this guy's 00:03:58.189 --> 00:04:05.840 saying, no, you can't. because it's technically 00:04:05.840 --> 00:04:07.500 their property because it's on a consignment 00:04:07.500 --> 00:04:12.060 deal. This is a massive, massive mess. And if 00:04:12.060 --> 00:04:15.280 you think it's just comic books, right, it's 00:04:15.280 --> 00:04:20.100 not. Let's talk about Paizo. Paizo has said that 00:04:20.100 --> 00:04:24.920 due to this distribution snafu during August 00:04:24.920 --> 00:04:27.720 and September, the following Paizo releases will 00:04:27.720 --> 00:04:30.540 not be available at bookstores or Amazon. Starfinder 00:04:30.540 --> 00:04:33.540 Core, Starfinder Retail, Starfinder Special Edition. 00:04:34.710 --> 00:04:36.689 Pathfinder, Battlecry, Pathfinder, Pathfinder, 00:04:36.930 --> 00:04:39.649 Pathfinder. Like I'm showing you in this, in 00:04:39.649 --> 00:04:45.990 the browser, just a huge list of stuff. They've 00:04:45.990 --> 00:04:48.769 got a bunch of stuff that D &D owns, that Wizards 00:04:48.769 --> 00:04:52.310 of the Coast owns, right? Because again, they 00:04:52.310 --> 00:04:58.480 do all this on consignment. And again, for everybody 00:04:58.480 --> 00:05:01.639 but Marvel and DC because during COVID, so Marvel 00:05:01.639 --> 00:05:04.139 and DC used to be distributed through Diamond. 00:05:04.860 --> 00:05:07.379 During COVID, Marvel and DC pulled out and they're 00:05:07.379 --> 00:05:09.360 like, we'll just do it ourselves, right? So Marvel 00:05:09.360 --> 00:05:13.639 and DC aren't part of this, but everybody else 00:05:13.639 --> 00:05:15.759 is, literally every other, basically every other 00:05:15.759 --> 00:05:21.120 comic publisher. So this is a giant, giant mess. 00:05:24.360 --> 00:05:26.160 Jay, I'm going to I'm going to flip it over to 00:05:26.160 --> 00:05:33.439 you. What are your thoughts on this whole? And 00:05:33.439 --> 00:05:36.060 again, you're a big like weekly comic book guy, 00:05:36.480 --> 00:05:39.180 stuff like that. You have we both have a couple 00:05:39.180 --> 00:05:40.899 of favorite local comic shops that I'm sure are 00:05:40.899 --> 00:05:43.199 going to be affected by this. What are your first 00:05:43.199 --> 00:05:50.160 thoughts about this whole situation? So. One, 00:05:50.319 --> 00:05:54.540 I am a little concerned because. And I don't 00:05:54.540 --> 00:05:58.720 think you know this Alex, but I have been very 00:05:58.720 --> 00:06:02.800 recently within the past week. I started reaching 00:06:02.800 --> 00:06:06.060 out to a lot of comic book, local comic book 00:06:06.060 --> 00:06:11.339 shops to do research into the comic business. 00:06:11.519 --> 00:06:13.639 I'm hoping that they would share like their business 00:06:13.639 --> 00:06:18.379 model, the finances to do research for an MBA 00:06:18.379 --> 00:06:21.050 project that I'm working on. So I really wanted 00:06:21.050 --> 00:06:24.110 to dig deep into the business of common books. 00:06:25.110 --> 00:06:28.730 And now I'm just like. Great research project 00:06:28.730 --> 00:06:32.509 now. Yeah, I think it's an even better research 00:06:32.509 --> 00:06:36.110 project now. Yes, but I think I think I'm going 00:06:36.110 --> 00:06:38.810 to get a lot of like, hey, this is this is really 00:06:38.810 --> 00:06:40.470 fucked right now and we're trying to figure this 00:06:40.470 --> 00:06:45.670 out. Sorry. It could be it could be really good, 00:06:45.810 --> 00:06:47.810 could be a really good research project, but 00:06:47.810 --> 00:06:50.579 or I could get a lot of like. Yeah, we don't 00:06:50.579 --> 00:06:55.980 know if we're going to stay open or not. This 00:06:55.980 --> 00:07:02.060 I did not know about Diamond. They're essentially 00:07:02.060 --> 00:07:06.540 a monopoly. Yeah. And that that's what kind of 00:07:06.540 --> 00:07:10.839 worries me that we're going to see one a lot 00:07:10.839 --> 00:07:14.300 of like little struggling comic book shops just 00:07:14.300 --> 00:07:17.160 close. And then I'm worried about the little 00:07:20.339 --> 00:07:25.519 comic book. Publishers are the ones that, yeah, 00:07:25.560 --> 00:07:31.100 they're screwed. Yeah. So yeah, my initial thoughts 00:07:31.100 --> 00:07:34.199 is like, yeah, this is like, this is really, 00:07:34.420 --> 00:07:36.639 this is really bad. Am I like worried about like 00:07:36.639 --> 00:07:39.740 Marvel DC? Like not really. I think that's fine. 00:07:40.319 --> 00:07:44.779 Um, but some of the smaller ones that I follow, 00:07:44.879 --> 00:07:47.360 like I'm kind of like, are these, are they going 00:07:47.360 --> 00:07:50.000 to still be around? Like, in three or four months 00:07:50.000 --> 00:07:52.199 from now. So. Well, and again, I'll go back to 00:07:52.199 --> 00:07:59.579 Fanta graphics. They said seven figure thing. 00:07:59.819 --> 00:08:01.839 They say that right now, like they all Fanta 00:08:01.839 --> 00:08:04.339 graphics, thirty five thousand dollars. And anybody 00:08:04.339 --> 00:08:07.000 that knows anything about small business, thirty 00:08:07.000 --> 00:08:10.379 five grand is a massive amount of money for just 00:08:10.379 --> 00:08:14.939 this. Fanta says as of May 16th, they'd stopped 00:08:14.939 --> 00:08:23.360 returning their calls. Right. This whole thing 00:08:23.360 --> 00:08:28.639 is a giant, giant mess. I so something that I 00:08:28.639 --> 00:08:37.659 will say. I like to draw. I used to be way more 00:08:37.659 --> 00:08:39.700 into it when I was younger, started recently 00:08:39.700 --> 00:08:43.919 getting back into it. I looked at last year, 00:08:44.019 --> 00:08:48.019 I looked at. uh, becoming a comic book artists, 00:08:48.200 --> 00:08:50.399 like one, what would it take? Is there like a 00:08:50.399 --> 00:08:53.820 degree program? Yes, there is. And this is something 00:08:53.820 --> 00:09:00.360 that really, really shocked me one to get your, 00:09:00.360 --> 00:09:03.539 uh, I think it was a bachelor's in fine arts 00:09:03.539 --> 00:09:07.500 with a focus and comic book art. I would spend 00:09:07.500 --> 00:09:11.179 more money getting that degree than I spent on 00:09:11.179 --> 00:09:13.870 my engineering degree. And your engineering degree 00:09:13.870 --> 00:09:15.250 is going to pay you a whole lot more. By the 00:09:15.250 --> 00:09:17.370 way, side note, I can actually introduce you 00:09:17.370 --> 00:09:20.169 to a formal Marvel and D .C. artist if you'd 00:09:20.169 --> 00:09:23.809 like to meet them and ask. Oh, nice. But yeah, 00:09:23.850 --> 00:09:25.629 looking at their salary, like I would get paid 00:09:25.629 --> 00:09:27.850 less. And then also there's no guarantee that 00:09:27.850 --> 00:09:29.950 you're even going to going to get a job. Nope. 00:09:30.049 --> 00:09:32.889 And I was like, wow, like this is really not 00:09:32.889 --> 00:09:37.389 like a good kind of investment thing to try to 00:09:37.389 --> 00:09:42.600 go for. But yeah, I think the whole people struggle 00:09:42.600 --> 00:09:45.080 and you know, Alex, we've talked to a few people 00:09:45.080 --> 00:09:47.759 at comic con. Um, there's some people that are 00:09:47.759 --> 00:09:50.639 able to pull it off that go to like kind of travel 00:09:50.639 --> 00:09:54.500 with the cons, right? They do a lot of, um, they 00:09:54.500 --> 00:09:56.539 sell a lot of their art. They do commissions. 00:09:57.259 --> 00:09:59.980 Um, but then you have others that aren't really 00:09:59.980 --> 00:10:05.340 that. Diverse, uh, and they struggle. And this 00:10:05.340 --> 00:10:08.980 is, I feel like we're going to see. Small little 00:10:08.980 --> 00:10:14.100 comic book companies close. And again, not just 00:10:14.100 --> 00:10:15.940 comic book companies. I'm going to bring this 00:10:15.940 --> 00:10:19.419 back up. Green Road and Publishing, which publishes 00:10:19.419 --> 00:10:23.840 a lot of various comic book stuff, says that 00:10:23.840 --> 00:10:26.980 Diamond has eighty five hundred books in their 00:10:26.980 --> 00:10:30.720 inventory with a retail value of over three hundred 00:10:30.720 --> 00:10:34.259 thousand dollars. And if Diamond is permitted 00:10:34.259 --> 00:10:39.610 to quote, let me get the quote here. Sell its 00:10:39.610 --> 00:10:42.289 consigned inventory quote free and clear of liens 00:10:42.289 --> 00:10:45.590 claims interest or encumbrances Right meaning 00:10:45.590 --> 00:10:47.490 they don't have to give anybody any money to 00:10:47.490 --> 00:11:02.000 sell this stuff, right? Yeah It's it's huge In 00:11:02.000 --> 00:11:03.960 March, publishers weekly reported that Diamond 00:11:03.960 --> 00:11:07.159 owed $9 .2 million to Penguin Random House, $1 00:11:07.159 --> 00:11:10.139 .7 million to Consumer Products, $500 ,000 to 00:11:10.139 --> 00:11:11.799 Lunar, as well as additional funds to publishers 00:11:11.799 --> 00:11:24.860 like D &D's Wizards of the Coast. Just wow. Yeah, 00:11:25.379 --> 00:11:27.539 this is going to be interesting to see how this 00:11:27.539 --> 00:11:32.620 plays out because I don't think there's a whole 00:11:32.620 --> 00:11:39.259 lot that some of these companies can do. I mean, 00:11:39.320 --> 00:11:42.600 like they can sue. They can sue. That's just 00:11:42.600 --> 00:11:45.700 it. It'll be a legal fight. Like and how much 00:11:45.700 --> 00:11:47.340 money they got to spend on lawyers to get this 00:11:47.340 --> 00:11:50.279 done. Yeah. Couple of things I think you're going 00:11:50.279 --> 00:11:51.980 to see out of this is one. I think you're going 00:11:51.980 --> 00:11:54.139 to start seeing random RPG show up at fucking 00:11:54.139 --> 00:11:56.120 discount stores. You're going to head over to 00:11:56.120 --> 00:11:57.580 the dollar general. They're going to have copies 00:11:57.580 --> 00:12:02.029 of Pathfinder for 10 bucks. Right, um And that's 00:12:02.029 --> 00:12:04.889 where a lot of shit goes The other thing that 00:12:04.889 --> 00:12:07.110 I think is is is that we need to take into account 00:12:07.110 --> 00:12:10.350 here and coming from I published a role -playing 00:12:10.350 --> 00:12:14.789 game owned a game store All the companies up 00:12:14.789 --> 00:12:17.450 and down the chain in this in this physical media 00:12:17.450 --> 00:12:19.789 market whether it's comic book stores gaming 00:12:19.789 --> 00:12:24.690 stores, etc to distributors The margins are so 00:12:24.690 --> 00:12:29.370 tight and there is zero room for error, right? 00:12:29.720 --> 00:12:32.600 So you get yourself into a bad situation that 00:12:32.600 --> 00:12:34.679 what and you're just you're done. You're you're 00:12:34.679 --> 00:12:44.200 toast. Right. It just. It crushes you. Right. 00:12:45.519 --> 00:12:47.279 Somebody in the chat talking about Paiso Paiso 00:12:47.279 --> 00:12:49.919 CEO Jim Butler says, quote, Please support your 00:12:49.919 --> 00:12:52.039 favorite game and comic publishers by buying 00:12:52.039 --> 00:12:54.700 directly from them or going to your favorite 00:12:54.700 --> 00:12:57.299 LGS and asking them to order for upcoming releases. 00:12:57.820 --> 00:13:02.590 Right. For gaming, for tabletop gaming, the upside 00:13:02.590 --> 00:13:05.210 is there's other distributors. There's MagEx, 00:13:05.389 --> 00:13:09.409 there's GTS, there's Southern Hobby, there's 00:13:09.409 --> 00:13:13.600 Peachtree. the tabletop space while this is gonna 00:13:13.600 --> 00:13:15.500 screw a lot of tabletop companies believe me 00:13:15.500 --> 00:13:17.740 because diamonds screwing them there at least 00:13:17.740 --> 00:13:21.580 are other Distributors out there who carry this 00:13:21.580 --> 00:13:23.399 stuff and can can get money to your favorite 00:13:23.399 --> 00:13:25.679 tabletop Really? This is gonna hurt the comic 00:13:25.679 --> 00:13:28.500 book guys. This is just all the small publishers 00:13:28.500 --> 00:13:32.639 are screwed And again, they don't have the money 00:13:32.639 --> 00:13:35.059 for a shit ton of lawyers And by the way, if 00:13:35.059 --> 00:13:36.860 you know anything about bankruptcy proceedings, 00:13:37.259 --> 00:13:40.620 they're gonna get in line Right chase says chase 00:13:40.620 --> 00:13:43.919 bank has a 45 million dollar line of credit out 00:13:43.919 --> 00:13:49.840 to diamond who you think is gonna get paid first 00:13:49.840 --> 00:13:54.960 Yep Because you know what chase has lawyers and 00:13:54.960 --> 00:13:58.299 they'll pay their lawyers Three million to recover 00:13:58.299 --> 00:14:01.440 30 million of the 45 that they're owed and then 00:14:01.440 --> 00:14:04.019 they'll write the rest off as a tax deduction 00:14:09.789 --> 00:14:16.070 So pour one out for the guys we love them Boy 00:14:16.070 --> 00:14:20.370 oh boy Jay any other final thoughts on this on 00:14:20.370 --> 00:14:24.870 this story before we move on to our next Actually 00:14:24.870 --> 00:14:29.230 kind of nicer story sucks. Yeah, it just sucks 00:14:29.230 --> 00:14:34.990 like yeah Stay tuned as we watch this develop. 00:14:35.370 --> 00:14:37.710 This is probably a story that will update a bunch 00:14:37.710 --> 00:14:40.629 as it moves to the courts and things like that. 00:14:40.669 --> 00:14:43.409 So I'm gonna keep my eyes open on this one. So 00:14:43.409 --> 00:14:45.429 yeah, stay tuned to this channel for more updates 00:14:45.429 --> 00:14:45.909 on this.