Devil’s Due leaves Diamond and lots of questions

Announced via PR yesterday, Devil’s Due, the long-running indie publisher is leaving Diamond as their distributor, for both books and periodicals, and going with Haven and self-distribution. But the reasons seem to be a tangle of financial considerations:

Devil’s Due Publishing has pulled its distribution of comics and graphic novels from Diamond Comic and Diamond Book Distributors, effective today. The Publisher will soon be announcing its new book store distribution partners, and will offer product direct to comic book retail outlets, as well as distribution through Haven Comic Distributors.

“For almost over a year Devil’s Due has been in an unwinnable situation wherein Diamond garnishes our revenues to pay back returns and fees it claims are owed from 2008 and 2009, making it impossible for us to keep up with payments to talent, printers, and other expenses while maintaining a stable business,” said Josh Blaylock, president of Devil’s Due, who was forced to wind down the company’s publishing rather than ramp up as it originally planned to do when hit with a rough econom in 2008. “We’ve exhausted every resource to get on track, with a primary focus on catching up with talent payments first and formost, but when Diamond controls the money flow, that becomes impossible.”

Devil’s Due and its owner Josh Blaylock have been in the news in recent years for owing a lot of money to its freelancers, and other distress signs of financial difficulty have been easy to find. However, the original PR left so many questions — why does Devil’s Due OWE Diamond money when it’s usually the other way around, for starters — that folks immediately leapt to the keyboard, including Graeme McMillan, who swiftly got some questions in to Blaylock. Selected excerpts:

Diamond will tell you that yes, DDP owes them money. DDP has reason to question that amount, and therefore question the entire way we’ve been forced to conduct business for the past year, even going back as far as late 2008. In the spirit of still hoping to work things out (which I still would love to see happen), I can’t go into details on dollar amounts, but it is significant, and the only way to come out of it is to be able to ramp up publishing, and then KEEP enough of the sales from that publishing to pay our bills, back debts, and marketing.

[snip] In 2009 our estimates show book store sales, returns and shortage and damage fees were much much higher in previous years, to the tune of 170% or more of our actual sales in the book market. Yes, you read that right, I said returns were almost two times as much as our actual sales. There was also a great deal of very very old material being returned that should have been past the return point, going as far back as 2006. I’d like to give Diamond the benefit of the doubt, but that is so far beyond the scope of anything acceptable that it would be negligent to let it continue.

Maybe product shortages really did increase by 800% or more from the previous year, and maybe it had nothing to do with the chaos reported about the Diamond warehouses at that time, or product being lost, but if it didn’t, then what does that mean regarding our revenue being docked for the past year? Those are the kind of questions that must be answered clearly before we can restore the relationship.

Further in the interview, Blaylock states that although alternate distribution means are not a huge part of their business at this point, he feels it’s the only way to get money available to pay freelancers and creditors, since Diamond is “garnishing” the money he was due from them.

The story seems to be missing lots and lots of elements, but some of question marks can be filled in. Diamond has long been in the habit of paying printing bills for some publishers in advance of the pre-orders — and taking the money out of the sales. This happened in Devil’s Due’s case, but the returns were so huge that Blaylock was no longer getting paid by Diamond, and could only print when Diamond could advance the money. Eventually the money Diamond was taking out of the profits were so much that Blaylock coudln’t keep up with paying talent either and had to slash titles.

Obviously, there is blame on both sides here or rather a system that wasn’t going to work given the big downturn in the economy in 2009.
Which would all go a long ways towards explaining Devil’s Due’s move to Haven. As to whether it will be successful or not, time will tell. This doesn’t seem to be a story with obvious heroes and villains. While Devil’s Due has had rough patches in recent years, no one can doubt that Blaylock is serious about publishing comics — over the years DD has had different partnerships and licenses, and Blaylock showed people could make money with licensed comics (GI Joe) when no one else was doing it. As for Diamond, they are the most key player in the industry, whatever individual beefs publishers have with them.