Comic book company that owes WotC and Hasbro over $1,900,000 files for bankruptcy

Having been a big player in the comic and game distribution industry for years, Diamond Comic Distributors has now "filed a voluntary petition for relief under Chapter 11." In other words, bankruptcy. Diamond had managed to accrue upwards of $50 million in debts including over $1 million and $900,000 to Hasbro and Wizards of the Coast, respectively, and is now unable to continue operations as normal.

For the unaffiliated, Diamond has been the sole distributor for many of the best comics. For around 25 years it distributed Marvel and DC comics until, back in 2020, it lost the rights to DC with Marvel following suit in 2021. Citing these breaks in partnership in a recent FAQ around the company's restructuring, Diamond notes "unexpected loss of certain exclusive publisher relationships, compounded by an overall contraction in consumer spending, increased inflation, and a loss of margin on key print product lines" as its major reasons for filing for bankruptcy. Diamond doesn't just owe WotC and Hasbro money, it also has debts to BattleTech and Shadowrun publisher Catalyst Games ($401,483), TRPG and board game distributor Publisher Services, Inc ($223,141), and Army Painter ($316,296), to name a few.

The FAQ makes it clear that, "Post-pandemic, the comic book industry at large has seen a decrease in consumer activity paired with rising operating costs", though it doesn't mention the widely criticized approach Diamond had taken to trading that seemed to benefit the company above its publishers.

As outlined by IGN, Diamond's middleman approach, that saw comic book store owners having to place orders through its distribution network as opposed to going straight to the publisher, meant store owners were forced to be more conservative with their orders to avoid money lost on unsold comics.

This was alongside concerns that Diamond was monopolizing the market, and the company's requirement for a book to net them $2,500 before being included in their Previews catalog. All of which could be considered reasons for breaking with Diamond, and potential contributing factors in its eventual bankruptcy.

"As part of the restructuring process, Diamond has received a $39 million stalking horse bid from an affiliate of Universal Distribution (“Universal”) for Alliance Game Distributors" says the official press release detailing the news. Alongside DIP financing from JP Morgan Chase to fund post-petition operating expenses, the company has also "entered into a Non-Binding Letter of Intent (LOI) with Universal to acquire Diamond UK". All this will go a long way to finally getting the companies paid that Diamond owes money to.

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