Court Approves New Buyer For Diamond Comic Distributors. Is The Saga Finally Over?

Is the comic book industry’s long distribution drama finally at an end? After many twists and turns, the fate of Diamond Comic Distributors, once the lynchpin of the entire retail ecosystem for periodical comics in North America and elsewhere in the world, has apparently been resolved. A United States Bankruptcy Court for the District of Maryland has approved a combined bid from Universal Distribution LLC and Ad Populum to acquire key assets of the distressed company.

“We are pleased that the court has approved Universal and Ad Populum’s combined bid. Our priority during this process has been to minimize disruption to publishers, retailers, our employees, and comic and games fans everywhere,” said Diamond Chief Restructuring Officer Robert Gorin in an official announcement. “We are confident that this will provide the best outcome for everyone involved.”

Under the terms of the approved backup bid, Canadian distributor Universal will acquire Alliance Game Distributors, which handles tabletop and hobby gaming supplies. Ad Populum, the holding company for pop culture brands including NECA, KidRobot, Whizkids and others, will sweep up Diamond Comic Distributors, Diamond Book Distributors, Diamond Select Toys & Collectibles, Collectible Grading Authority, and other related assets. Diamond UK, the company’s British unit, remains separate from this transaction.

The combined bid was accepted after a month of increasingly contentious and worrisome developments following the initially successful bid of Alliance Entertainment, which won the auction for Diamond’s assets on March 25. Diamond had sought to reverse the results of the auction and have Universal declared the winner. Alliance sued, and a judge upheld Alliance’s rights on April 11.

But that didn’t settle the matter. In the course of the proceedings, Diamond disclosed to Alliance that a distribution agreement with Hasbro’s Wizards of the Coast (makers of Dungeons & Dragons, Magic: The Gathering and other popular games) had been cancelled, and that Diamond’s liabilities were $7 million (about 10%) higher than previously disclosed.

Alliance filed notice to terminate their purchase agreement on April 25. On Monday, the trustee involved in the case moved to covert the Diamond bankruptcy from Chapter 11 to Chapter 7 (liquidation), due to alleged failures by Diamond to file required paperwork. Diamond explained that as “unfortunate and unavoidable oversights.” Alliance then filed suit against Diamond again, alleging the company knowingly concealed the termination, and sought refund of its $8.5 million in earnest money.

All this turmoil represented a huge reversal in fortune for Diamond, which grew from modest beginnings to become the sole distributor for periodical comic books, and a major distributor of games, trade books and other collectibles, from the late 1990s. Diamond’s central role in the industry was controversial, but the company’s focus on the very specific needs of comics retail, and personal relationships with retailers and publishers, helped smooth the waters in a turbulent business.

Diamond created a major shock in 2020, electing to close its warehouses during the pandemic, which shut off the supply of new products to stores for weeks. That move shook the confidence of DC and Marvel, the industry’s two largest players by far, leading them to stand up alternate distribution from Penguin Random House (Marvel’s choice) and Lunar Distribution (DC).

The resulting fragmentation created years of complexity for the fragile network of independently-owned retail stores, who suddenly had to manage multiple distributor accounts and risk diluting the volume discounts they received by placing all their orders through Diamond. In the meantime, many of the industry’s other large publishers lined up behind one of the new contenders, leaving Diamond as the main conduit for smaller independents, and a reseller for some of the larger accounts rather than a direct distributor.

Diamond’s troubles became more and more apparent as publishers fled. By the end of 2024, it was obvious that restructuring was inevitable. Many in the business hoped that Chapter 11 would provide an orderly way to unwind Diamond’s debts while preserving its core capabilities, especially the expertise of its staff. When Alliance Entertainment was revealed as the winner of the auction, many in the comics business expressed concern that the company had made the bid primarily to acquire the game distribution side and had little interest or expertise in the crucial periodical distribution apparatus, a fear stoked by comments by the group’s Chairman in an industry podcast that was later taken down.

Statements accompanying the announcement suggest a hope that Diamond’s new owners will provide some stability.

“This expansion into the U.S. market through our acquisition of Alliance Game Distributors marks a pivotal moment for Universal Distribution,” said Angelo Exarhakos, President and CEO of Universal Distribution. “We’re committed to building strong, transparent partnerships and ensuring that Alliance continues to serve as a reliable and resilient link in the supply chain.”

“Ever since I was young, I’ll never forget walking through the front door of my neighborhood shop and spotting those iconic Diamond Comic boxes, each one opening to reveal my dreams and ambitions,” said Joel Weinshanker, Managing Director of Ad Populum. “We’re incredibly excited to build on Diamond’s remarkable legacy by bringing Ad Populum’s best-in-class sales, marketing, and distribution to the next chapter.”

Is this opera finally over? Has the fat lady finally sung? Unfortunately, with the many plot twists in this saga, the best we can say, in classic periodical comic book style, is “To be continued…?” At least until the ink is dry on the final agreement.