On Tuesday, January 14, Diamond filed for Chapter 11 bankruptcy, and now the fate of the comics world hangs in the balance.
Or does it?
We won’t know for a bit, but if nothing else, this is a turning point. The basic facts are this: Diamond filed for Chapter 11 on January 14. The purpose is to allow the sale of Diamond and all its assets, and that process has begun: Universal Distribution has submitted a “stalking horse” bid, basically a minimum bid, of $39 million for Diamond’s game distribution arm, Alliance. Universal may also purchase Diamond Comic Distributors UK. They are also looking to sell the other pieces of the company, Diamond Comic Distributors (the thing we all just call “Diamond”) and Collectible Grading Authority (CGA).
As of the Chapter 11 filing, Diamond owed $32.6 million to JP Morgan and another $40 million to its vendors and others. The JP Morgan loan is a secured debt, backed by collateral, and will be paid, while the $40 million is unsecured debt that may or may not be paid in full. Many of the unsecured debtors are comics publishers who have not gotten any payments from Diamond for up to two months, which may be unsustainable for some. The largest unsecured creditor is Penguin Random House, which is owed $9.2 million.
What Happened?
What has happened to Diamond is, ironically, an unraveling of the exclusives that allowed it to dominate in the first place. In the mid-1990s, Diamond signed exclusive distribution agreements with Marvel, DC, and a number of smaller publishers, effectively locking other distributors out of the most lucrative part of the market. From 1996 to 2020, Diamond was the sole distributor to the direct market, but in 2020, history started to reverse itself as first DC and then Marvel left for other distributors, and most of the mid-size publishers followed.
The change was spurred by the pandemic. In March 2020, Diamond notified its business partners that it would stop distributing to the direct market as of April 1. Owner Steve Geppi cited closures of comic shops and its own distribution centers, as well as disruptions in the supply chain and freight networks, as reasons for the closing.
Reactions to the closing were mixed. “I absolutely applaud the decision to cease shipping books during COVID,” said Joe Murray, owner of Captain Blue Hen Comics in Newark, Delaware, and the current president of the retailer association ComicsPRO. “I don't think we would have survived during that time if stuff had continued to come out.” Others pointed out that book distribution didn’t shut down even in the early days of the pandemic, and many retailers did not close down either, using a combination of delivery, curbside pickup, and mail order to continue serving customers who could not enter the stores.
Nonetheless, the suspension in service led to more serious consequences for Diamond. DC made the first break, announcing in mid-April that it had established an alternative distribution system and would start shipping new comics to retailers on April 28. They began by working with two mail-order retailers, Midtown Comics and DCBS, to set up distribution; by the end of the year, Midtown was out of the distribution business and the DCBS distributor had established Lunar Distribution. Diamond had both lost a major account and acquired a competitor.
The other shoe dropped in March 2021, when Penguin Random House announced that it had set up its own distribution arm, PRHComics, and its first client was Marvel. The two largest comics publishers were now with other distributors. In 2023 the third largest, Image, signed on with Lunar, and by the beginning of 2025, most of the others had departed as well, with Dynamite left as Diamond’s largest exclusive publisher (BOOM! Studios is slated to depart for new owner PRH on April 1). While DC is exclusive to Lunar, the other publishers were still distributed by Diamond on a wholesale basis—Diamond gets the comics from the distributors and ships them to the stores, adding an extra step but allowing stores to order from a single source.
Nonetheless, for Diamond, the loss of its biggest clients led to both a loss of sales and an increase in operating expenses. “This is a result of smaller order quantities of comic books, graphic novels, and toys or merchandise products per shipment from the same existing customer base,” the bankruptcy petition states. “Because the Debtors service thousands of customers, the associated overhead—including labor costs and rent—for fulfilling customer orders has remained constant despite the smaller individual order quantities.” As sales shrink, it’s harder to meet the threshold for volume discounts from freight carriers, and of course, the price of everything has gone up for everyone.
In an attempt to consolidate and cut costs, Diamond decided to stop using its Plattsburgh, N.Y., warehouse, shifting everything to its other warehouse in Olive Branch, Michigan. Even this backfired, however, when the owner of the Plattsburgh warehouse forced Diamond to leave earlier than planned (they had a month-to-month lease) and the distributor scrambled, unsuccessfully in some cases, to get product to the market in time, hindered even further by a January 2025 blizzard that briefly shut down the Olive Branch facility.
Retailers React
The changes immediately made retailers’ lives more complicated; after years of dealing with a single distributor, they now had to order from at least two. Although the terms were less favorable, many retailers opted to continue getting Marvel, Image, and other publishers’ titles from Diamond.
Jen King, owner of Space Cadets Collection Collection in Shenandoah, Texas, has been ordering from Diamond since her first store opened in 1995. “Over the years, I’ve bought toy lines straight from the distributors who hold the licenses and nerdy accessories as well, but until the pandemic, my comics came from Diamond,” she said. “When they shut down for that period and our store stayed open (under the warehouse rule) we needed comics for our live shows and so we reached out to small press companies and creators so that we could keep our staff working. It kept our customers reading also.”
Since then, she has been ordering from Lunar and PRH as well. “It was a financial decision,” she said. “Shipping was quicker (sometimes as much as a week faster) and much cheaper.” She also occasionally orders direct from publishers.
Murray also goes way back with Diamond; Captain Blue Hen comics was account number 12. Nonetheless, he said, “I think that this is a seismic shift that's a little bit overdue for the industry to evolve to a level of greater professionalism. We've been doing things this way for 30 years, but we never questioned whether it was the right way to do it. Most of this industry and the infrastructure in it was built by accretion rather than by design, and it is always very difficult to fix a boat while it's on the water.”
Like King, Murray orders from a variety of sources, but he acknowledges that may be a stretch for some stores. “I'm a mid-level store, and even I have trouble hitting a HarperCollins or Scholastic minimum sometimes,” he said. “I can't order that as constantly as I did from Diamond or from the other distributors. So it's going to require everybody in the biz to kind of look and see, well, what's important, what should be the focus, what has been costing me money? What have I been taking for granted? Just because this item is available, should I have been ordering it?”
That viewpoint was echoed by Andrea Gilroy, who opened Books With Pictures Eugene, in Eugene, Oregon, on March 3, 2020, three weeks before the pandemic took over. “There's an opportunity for the industry, regardless of what happens to Diamond, to think about, what are our processes?” she said. “Maybe we rethink how periodicals get distributed. Maybe we rethink what things we choose to be periodicals and what things we choose to be books. And it's a real opportunity, I think, to think about not just what has been working, but what can be sustainable into the future.”
With single-issue comics accounting for only 28% of her business, she has never depended heavily on Diamond, often preferring to order graphic novels from book distributors because of better terms. And while many retailers have praised Diamond for extending credit to hard-pressed shops during difficult times, Gilroy points out that’s a double-edged sword. “Penguin Random House doesn't need me to survive,” she pointed out. “But Diamond does need comic shops to survive, so there was, I think, a certain kind of symbiosis between comic retailers and Diamond.” Having to deal with larger distributors has forced some retailers to shift gears and adapt to a new, sometimes less forgiving, set of business practices.
Publishers Adapting
The Chapter 11 filing led to an immediate exodus from Diamond, as Image declared it would henceforth be exclusive with Lunar and BOOM! Studios moved up the date for its already planned departure to PRH to April 1. Mad Cave Studios, also announced it was going exclusive with Lunar. Other publishers announced they were ending Diamond exclusives but would still solicit through Diamond; it appears that neither Lunar nor PRH is interested in taking the smaller publishers as clients. On the other hand, many of these publishers have already been working on other ways to reach their audience.
Diamond’s list of its top 30 unsecured creditors include Penguin Random House (to which it owes $9.2 million), Simon & Schuster ($600,000), Lunar Distribution (almost $500,000), Viz ($421,000), Titan ($357,000), Square Enix ($314,000), Dynamic Forces ($217,000), and Udon ($202,000), as well as providers of toys and collectibles and other vendors.
The reason Diamond’s debt to PRH is so high is that Diamond distributes Marvel and other publishers on a wholesale basis, so they pay PRH instead of the publisher. This has put at least one publisher in jeopardy: In its annual report, IDW noted that “PRH paid IDW for IDW products ordered by Diamond, and, as a result of Diamond’s bankruptcy, PRH may not be able to collect all or any of the corresponding amounts owed to PRH by Diamond.” Instead, PRH indicated in an informal communication, they will take that money from future payments to IDW. “[A]s of the date of this report, we are unable to determine the potential impact,” the report stated, “however it may have a significant negative impact on our future financial results and cash position.” Nonetheless, the company stated in the report that it expects to have sufficient cash flow to continue operating for its next fiscal year (which ends on October 31, 2025).
Erik Ko, Chief of Udon Entertainment, remains unruffled, at least for now, by the bankruptcy and the uncollected debt. “I am very conservative on how I run Udon,” he said. “I plan the business based solely on what I have in my bank account. Therefore, luckily, this Diamond hiccup does not affect how we operate too much.” Furthermore, Udon does not depend entirely on Diamond but also has robust sales through its web store, as well as directly to retailers who order retailer-exclusive covers. “At this moment, we are going to still publish our comics as usual,” he said. “Diamond is still distributing our books as of this moment. On top of that, other than our regular sales to comic shops, we also have retailer exclusives and our web store exclusives that are direct revenues for us in case anything really happens to Diamond. And our web store also offers to sell the regular editions so fans can also pick those up directly from us if they choose to.”
Alien Books, which has taken over the Valiant line, had already decided to release fewer books in winter 2024-2025 as the publisher worked on the relaunch of its Valiant Beyond initiative, Director MatÃas Timarchi told TCJ. Diamond hasn’t paid Alien since December, Timarchi said, and his current strategy is to delay the publishing plan and focus on crowdfunding campaigns such as the one currently running for I Dragon, a boxed set of medieval fantasy graphic novels that has racked up $36,000 in pledges so far.
“This will be a heavy blow for us, as it interrupts us during a growth phase, and we’ll have to reinvent ourselves,” Timarchi said. “However, I have faith that we’ll be able to do it and continue on the path we started some time ago.”
Other publishers were not so sanguine. “The truth is – we don’t know if we are going to survive this,” the small publisher American Mythology posted on its website. “We've reached out to other distributors but no one is looking for small publishers to add to their distribution slates. We were exclusive with Diamond and now we are facing a world where we may not have access to comic shops in the future.” Diamond owes American Mythology for about two months’ worth of books, leaving the publisher on the hook for creative and printing costs.
Black Panel Press has started a GoFundMe, stating that Diamond owes them $28,000. “We need that money to pay our authors' royalties and to print our upcoming titles, plus everything else that goes into running a business,” the GoFundMe page said. “We have a plan to set things back on course, but we need help to get us through the next few months. After that period, either Diamond will stabilize or we'll have new distribution.”
Other publishers, including Vault and Coffin Comics, are setting up direct-to-retailer distribution in addition to their other channels.
Changes in Attitudes, Changes in Marketing Plans
Five years ago, Diamond’s Chapter 11 filing would have been disastrous for comics as a whole, but the industry has not been standing still. With the boom in manga sales, bookstores and mass market outlets are carrying more graphic novels than ever. Kickstarter and Zoop have emerged as important platforms for funding individual projects, with Patreon as a way for readers to directly support creators. Publishers sell comics and exclusives from their own web stores, and ICv2 recently launched ICv2 Direct as a platform allowing them to sell small-batch comics and collectibles directly to customers. Marvel and DC have both leaned in on their digital services, and webtoons are reaching readers directly through their cell phones, much as the teens of a generation ago found manga in the Waldenbooks in their local mall. The comics industry, which has been growing for decades, is bigger than ever before, but it has also expanded far beyond the brick-and-mortar stores of the direct market.
Consider Z2, which publishes graphic novels by and about popular musicians such as Iron Maiden, Dee Snider, and Blondie. Their offerings come in a variety of formats: A basic paperback graphic novel that is available in comic shops (via Diamond), and an additional line of hardcovers with assorted extras, from coasters to vinyl records to a guitar, that are sold at higher prices through their web store. Their audience is narrow but deep – and willing to spend money on premium items connected with the musicians they love.
Bad Egg is another niche publisher that markets directly to its customers, who in this case are fans of particular YouTube and Twitch streamers. At the ICv2 panel at New York Comic Con last fall, Director of Publishing Robert Meyers said that their flagship book, Godslap #1, has sold over 100,000 copies. Bad Egg began selling directly from their webstore and then went to Diamond for direct market distribution; as of last October, their comics were in about 200 stores.
What has happened is that “comics” has expanded, from superhero comics sold in standalone brick-and-mortar shops to sequential narratives that serve many different audiences, and publishers can do quite well by catering to their niche audience. This is not necessarily a loss for the retailers. As Ko points out, Udon customers are very specific. “Our comics serve a very niche and specific audience,” he said. “The Street Fighter fans are very, very loyal and dedicated. They go to stores to hunt down our comics to read stories of their beloved World Warriors. I am not sure how many of our fans cross over to other books. Like, if they go into a store to look for a Street Fighter comic, will they actually also pick up a Wolverine or Batman comic also? I am not sure about that.”
Now What?
Diamond’s next steps have been laid out in the court papers. The auction will take place in mid-March and the sale will be completed in mid-April. In the meantime, Diamond is continuing to do business as usual but with a much reduced slate of products.
Some efforts are under way to ensure that small publishers will still be able to get into direct market stores if they want to. Massive Publishing, which was formerly exclusive with Diamond, has not only gone over to Lunar but is setting up a sub-distribution program, Massive Indies, basically allowing small publishers to group together and be distributed under a single name, and several other publishers are floating similar ideas.
It will be more difficult to replace Diamond as de facto center of a very decentralized business. For years, Diamond set the cadence of the direct market: Comics were listed in the Previews catalog two months before their release month; retailers had a set time to submit their orders, and new comics were released every Wednesday. Behind the scenes, Diamond was doing something else that nobody noticed until it was too late: They were taking the metadata from publishers and putting it into a consistent format. Metadata is simply all the data about a comic: Title, author, publisher, date, subject matter, the sort of thing that is pretty standard for books, but with the added complexity of series codes, crossovers, variant covers, and multiple creators in roles, such as inker, letterer, and colorist, that don’t usually get credits in other types of books. And Diamond also holds various retailer events where retailers can meet each other and hear from publishers what’s coming up next.
The retailer organization ComicsPRO has launched a number of initiatives in the past year, including the Comet project to create a unified metadata standard (which is the first step toward getting real sales data for comics) and new educational programs. “I think we have each other to pull on a lot more than we did in the past,” Murray said. “There were a lot more voices crying in the wilderness, and now we're, at least loosely, in packs to help each other.”
At the same time, he sees the decentralization of the comics industry as its strength. “The reason there has not been a big box store for comics is it moves a little bit too fast,” Murray said, “because everything is too perishable, and because of the level of service and maintenance comic shop customers need. You cannot franchise or handbook-ize that. If I had to describe the comic book industry is, it is 1% rule and 99% exception. I think the most annoying and frustrating things about being a comics retailer are why it's difficult to become a big box comics retailer, so that’s our saving grace.”
The post A New Chapter (11) for Diamond appeared first on The Comics Journal.
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