It was a wild weekend for comics industry watchers. As revealed late Friday, Alliance Entertainment, previously approved as the purchaser of most of Diamond Comics asset in a bankruptcy auction, suddenly terminated that agreement. While no details were revealed, a letter to publishers from Diamond said that business would go on as usual, as it has during the entire process for the most part.
Later in the day Diamond released an official statement via BusinessWire, (h/t Graphic Policy) and the tone was….upbeat?
Diamond Comic Distributors (“Diamond” or “the Company”), today announced that it will no longer be moving forward in the transaction process with Alliance Entertainment.
“Diamond Comic Distributors has pivoted to alternative, exceptionally well-known purchasers who are excited to partner with us. These companies have strong balance sheets and, importantly, unmatched presence and experience in our core industries,” said Diamond Chief Restructuring Officer Robert Gorin. “We are finalizing purchase agreements with these third parties and expect to announce the identities of these purchasers and seek court approval very shortly to complete the sale transactions.”
By the time you read this, perhaps the identity of these “alternative, exceptionally well-known purchasers who are excited to partner with us” will be revealed. Think of it as a gender reveal party except it’s a bankruptcy assets purchase agreement reveal.
“Unmatched presence and experience in our core industries” sounds promising, for sure, and maybe a little shade aimed at that infamous interview with that Alliance exec. While you can’t read too much into a statement this brief, after all the twists and turns in this story, there does seem to be a bit of a “finish the story on our terms” undertone.
Given the chipper tone in this statement, one would SUSPECT the buyer is the Universal Distribution/Ad Populum consortium. Given all that we have learned over the last six months of so, it looks like Diamond always wanted to sell to Universal, and Universal CEO Angelo Exarhakos spoke in the past about wanting to expand into the US. Everyone I talked to over the last few months who had informed speculation felt that Universal was on the path to buying up Diamond’s assets, and Exarhakos was even rumored to be at ComicsPRO for meetings.
Or this could be the biggest swerve of all.
But whoever the buyer is, it’s still not that simple. Several creditors, including Image Comics, Titan Publishing and The Pokemon Company have filed various kinds of objections to the settlement process. It seems that inventory consigned to Diamond is still an issue, with Pokemon asking for it back early on, and Titan and Image concerned that the inventory will be sold to the new owner even though it was sold on consignment and contracts included bankruptcy clauses. And there’s the matter of the $51 million dollars Diamond owes to its unsecured creditors.
The other giant monkey wrench in all of this is tariffs, those blasted tariffs. When Diamond filed for bankruptcy on January 14th, Alliance Games, it’s games distribution arm, was a profitable business. Thanks to tariffs, the games industry is now mired in uncertainty. The toy business is in even more dire straits, with 46% of small toy companies saying they might go out of business soon due to the the 145% mark-up on toys made in China. Suddenly the comics business looks almost stable by comparison. Welcome to this wonderful, chaotic world.
While more clarity on Diamond’s new but excited purchasers may have been revealed by the time you read this, one thing does seem much clearer now: according to the Alliance APA, the agreement could be terminated by “by mutual, written consent of Purchaser and Seller” and it seems likely that this was indeed a mutually agreed on termination. Diamond had already tried everything they could to not get sold to Alliance, and Alliance finally decided it wasn’t a good idea, as well.
BTW, while we’re all scratching our heads over this, and wondering what’s up, perhaps we will get some ideas tonight! By pure chance, a virtual panel entitled The Future of Comic Book Distribution is being held tonight with Boom EIC Andy Schmidt, Prana’s Atom Freeman, creator/publisher Charlie Stickney, Sweet’s Kenny Meyers and Moni Barrette of LibraryPass discussing the matter. You’ll need a ticket and it’s almost sold out, so hurry! I’ve got mine and will report on the learnings. If the panelists are lucky there won’t be any news breaking while they are speaking.
