Steve Geppi & Bob Montana

[shadroch]

Keep in mind that DC is a very small part of Time Warner. Time Warner may well have passed on Diamond because it was afraid of anti-trust issues stemming from Geppis monopoly. It may also have passed on the deal for many other reasons.

Time Warner seems more interested in owning the DC characters than actually publishing monthly comics of them.

 

That clause might have been a poison pill to keep Marvel from trying to purchase it.

There is no doubt that Diamond is hemorhaging money for years now, but how much of that is due to his being so short-sighted those many years ago.

[Aman619]

I think DC never bough DC because after ten years had passed, it wasnt worth taking over. Certainly no longer a potential cash cow now a source of vertical integration/profits.

 

but when they made the deal? it was a killer deal giving DC the upper hand.

 

Dont you remember those days after Marvel bought Heroes World? Geppi stood to lose the REST of his business if DC signed with CC instead of him. As a businessman, dont you think the power at the table was on the DC side? Geppi of course danced and argued etc for as good a deal as he could, (as we all would) but was clearly worried if he pressed too hard he'd lose it ALL, because CC would have taken an even worse deal since they were smaller and weaker than Diamond.

 

I still maintain that from that weak point, Geppi hunkered down to his new reality and was "saved" when Heroes World and Marvel went bankrupt and came back to him.

 

Why would they want the overhead of the warehousing and shipping etc??? DC came to the same conclusion.

 

also, doesnt Warners also own one of the largest trucking/shipping businesses? They did then. WB was originally bought by Kinney, a mobbed up parking lot and trucking company. If they ever WANTED to ship their own books they could have done so. But a few millions in comics business was always small potatoes.

 

To me, that clause about a buyout option was just more boot on Geppis neck pressure that DC now owned him.

[Aman619]

as you point out, the anti trust issues happening back then may also have been a minor worry.... but if there were lots of bucks at stake-- they would have gone ahead anyway ("We have congressmen on the payroll, right Tom?")

[shadroch]

As I said earlier- eliminate the competition, you can eliminate your customer service.

The biggest mistake anyone made back then was Marvel not offering to distribute DCs books.That would have been a game changer. Image and Dark Horse would have withered away, and Valiant would still be a gleam in Shooters eye.

[shadroch]

as you point out, the anti trust issues happening back then may also have been a minor worry.... but if there were lots of bucks at stake-- they would have gone ahead anyway ("We have congressmen on the payroll, right Tom?")

 

Thats just it- there isn't and really wasn't a whole lot of money involved. DCs monthly comic sales add up to about ten million dollars a year. At its height, it was perhaps 25 million. Time Warner is a multi-Billion dollar company.

Buying and defending a monopoly as small as Diamond wouldn't be worth it.

 

Have you read Mile High Chuck's take on the Marvel/Heroes World/ Diamond/DC fiasco? Pretty interesting stuff, although he obviously was a tad partisan.

[Aman619]

I try not to read Chucks opinions on ANYTHING even to flesh out other sides to a story...

[Moondog]

Nonsense.

Geppi was extremely aggressive in putting smaller distributors out of business- Comics Unlimited, Crown, the outfit in Connecticut, amongst others.

Publishers were forced to go to him and he completely changed the terms they could get.

When I had my store, I had many distributors to choose from and got discounts of 50 to 53%, depending on my order, free shipping and more promo material than I could use. These days LCS owners are little more than unpaid employees of Geppi. Say a wrong word and he cuts you off. Try to publish something Gemstone doesn't like and they won't distribute it. Store owners rarely get any credit consideration and Ind. publishers are often made to wait months for payments.

Classic example was when Dave Sim wrote an editorial about Geppis business practice and Geppi refused to carry Puma Blues, a book whose only crime was to be published by Sims company. Geppi knew fans would be outraged by his not carrying Cerebus, so he decided to hurt Sims publishing company by screwing writers and artist who he had no beef with.

Before geppis monopoly, there were over 6,000 comic shops and the independent comics market thrived. Now there are roughly 2,000 and the big four or five companies take up a much bigger piece of the pie.

 

 

Have you ever looked into what it takes to get Geppi to distribute a new book from a new company?

 

Well, that's a pretty aggressively anti Geppi point of view. I have talked to many retailers who also blame him, but the history of comics distribution isn't quite as you portrayed it. Marvel went on their own as you say, buying Snyders company in a mistake by an overly optimistic and greedy Perelman led Marvel. That left the two almost equal remaining distributors to seek survival by signing exclusives with what was left. DC made Geppi a very one sided deal where Geppi was only a sales middleman, that he had to accept for fear that Capital Cities would take the offer.

 

At the time all that mained was Image. It was at San Diego that year that Geppi announced he had made the deal with Image, and it was game over for CC. I think only Kitchen Sink stayed with CC in an effort to forstall a Geppi monopoly... And of course, because he had a lot more leverage with the loser than he did with Geppi at that point!

 

But without Marvel, Geppis comics business was actually smaller because Marvel was the biggest market share.

 

However, Geppi lucked out when Marvel pulled the plug on their distribution and then went to Diamond

 

The other point you make that I don't agree with is you leave out the 90s comics industry collapse entirely and how it forced the end of comics on credit. Stores now had to pay upfront. Which is a natural business decision when your client list shrinks from 5000 healthy stores to 2000 shaky ones in a cratering industry. You start demanding money up front and tightening the ship to avoid ballooning outstanding receivables from soon to be bankrupt comics stores.

 

No?

 

But yes stores tend to hate Geppi and bemoan the lack of choice. That's understandable.

 

You're recollection is correct. Before the monopoly, DCD was the second-largest distributor after Heroes World.

 

My view of the Montana story is that everyone but Steve made out just fine. How can he be viewed as a villain here?

[Moondog]

I think DC never bough DC because after ten years had passed, it wasnt worth taking over. Certainly no longer a potential cash cow now a source of vertical integration/profits.

 

but when they made the deal? it was a killer deal giving DC the upper hand.

 

Dont you remember those days after Marvel bought Heroes World? Geppi stood to lose the REST of his business if DC signed with CC instead of him. As a businessman, dont you think the power at the table was on the DC side? Geppi of course danced and argued etc for as good a deal as he could, (as we all would) but was clearly worried if he pressed too hard he'd lose it ALL, because CC would have taken an even worse deal since they were smaller and weaker than Diamond.

 

I still maintain that from that weak point, Geppi hunkered down to his new reality and was "saved" when Heroes World and Marvel went bankrupt and came back to him.

 

Why would they want the overhead of the warehousing and shipping etc??? DC came to the same conclusion.

 

also, doesnt Warners also own one of the largest trucking/shipping businesses? They did then. WB was originally bought by Kinney, a mobbed up parking lot and trucking company. If they ever WANTED to ship their own books they could have done so. But a few millions in comics business was always small potatoes.

 

To me, that clause about a buyout option was just more boot on Geppis neck pressure that DC now owned him.

 

They also owned the Warner Books bookstore distribution company which moved millions of graphic novels and trades. They had options to Diamond...

[shadroch]

Nonsense.

Geppi was extremely aggressive in putting smaller distributors out of business- Comics Unlimited, Crown, the outfit in Connecticut, amongst others.

Publishers were forced to go to him and he completely changed the terms they could get.

When I had my store, I had many distributors to choose from and got discounts of 50 to 53%, depending on my order, free shipping and more promo material than I could use. These days LCS owners are little more than unpaid employees of Geppi. Say a wrong word and he cuts you off. Try to publish something Gemstone doesn't like and they won't distribute it. Store owners rarely get any credit consideration and Ind. publishers are often made to wait months for payments.

Classic example was when Dave Sim wrote an editorial about Geppis business practice and Geppi refused to carry Puma Blues, a book whose only crime was to be published by Sims company. Geppi knew fans would be outraged by his not carrying Cerebus, so he decided to hurt Sims publishing company by screwing writers and artist who he had no beef with.

Before geppis monopoly, there were over 6,000 comic shops and the independent comics market thrived. Now there are roughly 2,000 and the big four or five companies take up a much bigger piece of the pie.

 

 

Have you ever looked into what it takes to get Geppi to distribute a new book from a new company?

 

Well, that's a pretty aggressively anti Geppi point of view. I have talked to many retailers who also blame him, but the history of comics distribution isn't quite as you portrayed it. Marvel went on their own as you say, buying Snyders company in a mistake by an overly optimistic and greedy Perelman led Marvel. That left the two almost equal remaining distributors to seek survival by signing exclusives with what was left. DC made Geppi a very one sided deal where Geppi was only a sales middleman, that he had to accept for fear that Capital Cities would take the offer.

 

At the time all that mained was Image. It was at San Diego that year that Geppi announced he had made the deal with Image, and it was game over for CC. I think only Kitchen Sink stayed with CC in an effort to forstall a Geppi monopoly... And of course, because he had a lot more leverage with the loser than he did with Geppi at that point!

 

But without Marvel, Geppis comics business was actually smaller because Marvel was the biggest market share.

 

However, Geppi lucked out when Marvel pulled the plug on their distribution and then went to Diamond

 

The other point you make that I don't agree with is you leave out the 90s comics industry collapse entirely and how it forced the end of comics on credit. Stores now had to pay upfront. Which is a natural business decision when your client list shrinks from 5000 healthy stores to 2000 shaky ones in a cratering industry. You start demanding money up front and tightening the ship to avoid ballooning outstanding receivables from soon to be bankrupt comics stores.

 

No?

 

But yes stores tend to hate Geppi and bemoan the lack of choice. That's understandable.

 

You're recollection is correct. Before the monopoly, DCD was the second-largest distributor after Heroes World.

 

My view of the Montana story is that everyone but Steve made out just fine. How can he be viewed as a villain here?

 

How can the man who signed a personal guarantee that he would pay and is now reneging be the villian? Besides the fact that he's not living up to his word? How about his claim that all this artwork was sold with no records being kept?

Are you serious? The market for the stuff crashed, but how does that excuse him? Had the market exploded and the art have multiplied in value, would he have reworked the deal?

How does the family recieving half of what they expected and were promised translate into it worked out fine for them? Most people don't end up in court over transactions that worked out fine.

[Moondog]

Except for the pieces that were sold, the family got all their art back and a half-million dollars. How are they victims?

 

As for what was sold, all they had to do was compare what was returned with the original inventory.

 

Let's cut to the chase, we don't see eye-to-eye about Steve. Clearly you blame him for your store failing. I credit Steve for contributing to my success as well as the success of thousands of stores. But I will admit if I were in your shoes I'd probably feel the same way.

[shadroch]

Gary,

I sold both my stores before Marvel bought Hero's World so you are way off base there. The store I managed after the merger failed but that had more to do with the ownership not reinvesting money back into the business than anything. They were late to the party, and thought that buying a few cases of some chrome cover made more sense than buying back issues and supplies- the sort of things we could sell today so we'd be there in ten years when everyone and his brother would want a ten year old book for its cool chrome cover.

For the record- I also bought 100 shares of Marvel when it went public at under 10 and after splits sold some 800 shares at 20+ so I made money off the Marvel disaster and I honestly am not speaking from a postion of sour grapes. I did have some 100 shares when they went bankrupt but I'd bought those at two and change on the way down. If I had any sour grapes, it would be that my investment of 100 shares of Classic Entertainment never panned out , but that was a long time ago.

 

Let me ask you a simple question- In your opinion,would the direct market be better off today without Geppis monopoly on it.

[rodan57]

I don't think has to be personal to see that Geppi thought he was big enough to break the contract on his own terms.

 

When you have the power you seek to use it.

[aardvark88]

In your opinion,would the direct market be better off today without Geppis monopoly on it.

 

Under ideal circumstances, there would be some competition if a current duopoly existed: say 60% market share to Diamond and 40% to Milton Griepp(sp?)'s Capitol City Distribution. But there was no room for both after the comic book implosion of the early 1990s, and everyone had to consolidate warehouses which led to a lot of smaller distributors and their staff losing jobs.

 

I know there was Styx (?) Distribution in Winnipeg, MB that bid aggressively for the exclusive rights to sell Marvel Comics in Canada, as he had his own trucking company out of central Canada.

[Tony S]

Gary,

I sold both my stores before Marvel bought Hero's World so you are way off base there. The store I managed after the merger failed but that had more to do with the ownership not reinvesting money back into the business than anything. They were late to the party, and thought that buying a few cases of some chrome cover made more sense than buying back issues and supplies- the sort of things we could sell today so we'd be there in ten years when everyone and his brother would want a ten year old book for its cool chrome cover.

For the record- I also bought 100 shares of Marvel when it went public at under 10 and after splits sold some 800 shares at 20+ so I made money off the Marvel disaster and I honestly am not speaking from a postion of sour grapes. I did have some 100 shares when they went bankrupt but I'd bought those at two and change on the way down. If I had any sour grapes, it would be that my investment of 100 shares of Classic Entertainment never panned out , but that was a long time ago.

 

Let me ask you a simple question- In your opinion,would the direct market be better off today without Geppis monopoly on it.

 

Let me ask you a question. Does it matter if the direct market would be better off today without Geppi's monopoly of it?

 

Geppi came to have that monopoly by playing the cards he was dealt the best he could. If you want to look for bad guys, look at Marvel. A number of distributors went out of business because of their decision to try to self distribute. A lot of comic book shops went out of business by chrome, die cut at over inflated prices because they were supposed to be instant collectibles. Back in the 90's, Marvel's stock prospectus proudly bragged of their intent to raise prices substantially over the next several years. Not because they had to cover their expenses, but because they thought they could and collectors and store owners would keep buying.

 

Going back even further - a good number of comic historians think that Phil Seulings pioneering efforts of direct distrubtion was really what started the decline you speak of. Once the publishers were selling most of their comics on a print to pre ordered basis, they soon discovered collectors were far more tolerant of price increases than newstand and drug store owners and customers. One could argue direct distribution saved the hobby for a time - then ultimately brought to the place we are now- where the best selling titles move 1/10 the copies of the best selling titles of 50 years ago. And modest selling books have numbers not much more than what kids used to do in their basement. Why are circulation numbers so low? Because new comics don't offer much of a value as far as entertainment goes. And why do they cost so much? Because the publishers print what is pre ordered. Lots less new comics sold translates into lots less stores. Because while back issue sales make headlines with million dollar books - new stuff you can order and sell at a set profit point pays the rent, utilities and employee wages.

 

There's lot's reasons one can come up with for the demise of comic shops and comic sales. Trying to hang it mostly on Steve Geppi seems to be lacking in perspective.

 

As an aside, I mark the end of the "good old days" of new comic book sales to when the price was raised to $1.00 for a regular comic book. That was the first price increase that was not accompanied by a "sorry we had to raise our price" And reached the point where buying a comic was much less an impulse decision.

[rodan57]

As an aside, I mark the end of the "good old days" of new comic book sales to when the price was raised to $1.00 for a regular comic book .... And reached the point where buying a comic was much less an impulse decision.

 

20¢

[ashrael]

I posted this comment on the article, but thought I would also mention it here:

 

I understand it correctly, 1970 strips valued at $80 selling for $50 is a $10 profit each, since Geppi was only paying 50% of the valuation. 1968 strips valued at $100 each would make $20 profit at $70 and, 1969 strips valued at $90 each would make $25 at $70 each. Of course there were other fees, but Geppi should have at least broken even.

[jhutton2]

A very interesting read with many business lessons contained within. This type of meltdown does not only happen in the comic world, so I am not surprised by it.

 

On an interesting side note, I own one of the original pieces of Montana art that is picutured in the article (where Jughead is chopping down a strung chicken on a rope). This was purchased through Heritage, so I am assuming the author lifted the pictures from Heritages web site.

 

An earlier comment rings true though. I own three pieces of Montana Art (a big Sunday strip and two of the smaller weekly strips). I dont really feel the need to purchase any others. Flooding the market with pieces after such a long abscence definitely drove down pricing, epecially combined with all the other mess that was happening with the economy in general during the same period.

 

Art, comics, other collectables, whatever they may be are only worth what someone is willing to pay for it at that moment. If you can wait things out to find more money than great, but what its worth is what its worth. I source collections off of the net and comic collectors all the time, and can't tell you how many people say I have "x" books, and I think they are worth "y" dollars, and then they get upset when no one, absolutley no one is willing to give them anything close to "y" dollars.

 

The market drives the value of an item, not any one individual or organization, even a monopoly that can enjoy manipulating the market for a while, will eventually always be subject to expulsion over time when something better or an alternative finally comes along.

 

Thanks for sharing.

 

Jason

[Moondog]

 

Let me ask you a simple question- In your opinion,would the direct market be better off today without Geppis monopoly on it.

 

No. The wholesale comics market is simply too small to have more than one company offering the same items to retailers. If an alternative distributor had 1/3 of the business and DCD the remaining 2/3, both would be crippled and unable to sustain the level of service that DCD provides today.

 

There just isn't enough volume to make it profitable.

 

And I apologize for my memory being off regarding your stores. Glad to hear you sold when you did. I too was very fortunate.

[Aman619]

Moondog, what is your recollection of Diamond suddenly charging for shipping? Was it gratuitous profit seeking? or a result of their diminished income and flexibility under their new "sales agent" status.

 

Ive always believed that shipping was free when Diamond was making a larger percentage, and was owning the books/inventory, .. or was the DC deal just cover for a raise in fees thru passing along the shipping to retailers?

[shadroch]

 

Let me ask you a simple question- In your opinion,would the direct market be better off today without Geppis monopoly on it.

 

No. The wholesale comics market is simply too small to have more than one company offering the same items to retailers. If an alternative distributor had 1/3 of the business and DCD the remaining 2/3, both would be crippled and unable to sustain the level of service that DCD provides today.

 

There just isn't enough volume to make it profitable.

 

And I apologize for my memory being off regarding your stores. Glad to hear you sold when you did. I too was very fortunate.

 

I imagine you are right, as things stand. But a new distributor might be much more aggressive in getting comics out of the LCS ghetto and into places where people might see them. Theres some 10,000 or more 7-11 type stores that could easily take in a rack of comics.