Diamond Comic Distributors sent a letter to comic publishers announcing it has decided not to them scheduled payments.
This is the letter:
Dear Diamond Vendor:
As the world responds to the outbreak of COVID-19, our focus is on protecting employees, understanding the risks to our business, evaluating the risks to our industry and examining the Federal Government resources available. While the full impact of this epidemic is still unknown, one thing is certain: supply chain disruptions have cash flow implications across the extended industry that can’t be underestimated.
While we work to understand the current industry landscape, the unfortunate truth is that we are no longer receiving consistent payments from our customers. This requires that at this time, we hold payments to vendors previously scheduled to release this week. This is a difficult decision and not one we make lightly. As this situation continues to evolve, we are committed to building out a plan for payment and will have more information to share later this week.
Thank you for your patience and understanding during these difficult times.
Is Diamond Comic Distributors broke?
The letter is interesting for what it doesn’t say. Diamond does not say they don’t have the money they owe publishers. They claim they aren’t receiving “consistent payments” from comic book shops (customers). That doesn’t mean they’re broke, nor does it mean they aren’t receiving any payments. It just means they aren’t receiving as much money as they normally do.
I assume comic book shops forced to close due to COVID-19 concerns are having trouble paying Diamond. That is totally understandable. I don’t think anyone can fault comic book shops for that. It doesn’t mean every single comic book shop in North American isn’t paying Diamond. Not all comic book shops were forced to close.
Diamond Comic Distributors could be sitting on a vast sum of money and is just electing not to pay their bills. They all but admit this in the letter. They say it was a decision not to pay publishers. If they don’t have the money they owe publishers, it would not be a decision. It would not be a choice.
Diamond Comic Distributors is choosing not to pay publishers. That’s not at all the same thing as not being able to pay publishers because they’re broke.
What does this mean?
This decision not to pay publishers will kill a lot of the smaller comic book publishers. It will wipe a lot of them out. In turn, publishers will not pay employees, including creators who worked on books Diamond already distributed. In other words, this is exactly the thing the $2 trillion stimulus package was enacted to avoid.
Diamond Comic Distributors could obtain a zero-interest loan, but they elected not to do that. Comic book publishers could get zero-interest loans, but with Diamond choosing not to distribute products for the foreseeable future and deciding not to pay publishers, there wouldn’t be a point.
When Diamond Comic Distributors first announced it would not accept any more books from publishers, I thought they didn’t have a choice. I know our governor here in Maryland ordered nonessential businesses to close. Diamond’s headquarters is in Maryland. I think I was wrong. As it turns out, just about every business in Maryland is considered an essential business. I’m now beginning to think Diamond is exploiting their monopoly as the comic industry’s lone distributor along with the COVID-19 pandemic to pull some financial shenanigans.