What are the plans and ideas behind Alliance Entertainment’s acquisition of Diamond Comics? We already have some clues: Alliance Chairman Bruce Ogilvie Appear on Byond’s “Comics Industry” podcast on Wednesday Jesse James, Dennis Barger and Bryan McClay. I know that sentence just exudes some people’s hearts, but Barger was able to use some phone calls to Ogilvie, who stopped for an hour of chatting. He proves the complexity of being personable and knowledgeable and open to learning comics business, although that is not the focus of the purchase.
One of the key points: He was asked where the sale price ranks between $40 million, which he said was close to $50 million.
Listen to the conversation and take notes, which is more what he said (note that there is more in the hour of conversation, so check out the podcast for more information – if I misunderstood some information.)
Ogilvie talks about the changes in his historical negotiations in the music industry (which makes comics look like children’s plays), including all the changes to physical media and so on. He mentioned that bringing the alliance public into a huge cause, which slowed their acquisition strategy for a while. But, “We have a five-year plan, and it’s the first year of our five-year plan. We hit $1.4 billion at the peak. Last year, we were looking for opportunities for a lot of things. I was in an investor meeting and talked to someone from the company. [comics] Industry, they took me away [about Diamond.] I know diamonds, but I don’t know anything about it. Everyone who works with me knows this. I heard they might be going bankrupt. ”
Ojivie said they are trying to find a way to buy diamonds directly, rather than letting it go bankrupt. “Unsecured creditors won’t make a lot of money. We think it would be better for the deal if we could only buy it, but we can’t control the offer. It’s run by Raymond James, and that train has left the station. We have to wait patiently, waiting for them to file for bankruptcy. That’s starting.”
Once Diamonds go bankrupt, Universal Pictures has a bid to stalker horses, Ogilvie has contact with Universal CEO Angelo Exarhakos. “I don’t know Angelo of Adam. I talked to him one day. He is very friendly, chatting and an open book. I heard all his opinions on everything. I didn’t say anything. I never talked to him again. ”
By accessing all financial information and under the NDA, under the bankruptcy proceedings, “we wanted to be a stalker, but we were not satisfied with that number,” Ogilvie said. “In hindsight, we should have just arrived at the bar and become a stalking horse, but it could cost an extra $1.3 million. If the court proves the auction, you’ll get too high protection, and that’s the result of Universal Pictures.”
When asked why you want diamonds, he said: “It’s a natural extension. We sell Funkos, Hasbro, Legos, Mattel. It’s a small part of our business – a small part of our $1.1 billion – but it’s a big leap. But it’s a big field. To a region there, it’s a big company, or a company that’s a $30 million company. A $30 million company priced at $30 million, your $30 million price is your $30 million price, and your $30 million price was $30 million. The company. Now we can make a statement, it’s a collectible.
He also mentioned the synergy of putting all the different products under one umbrella. “This makes us a supplier for big retailers chains to do business with. We can be their entertainment experts and they don’t need any expertise.”
Perhaps the most anxious subject, Ogilvie was asked about information about small independent publishers and how the alliance handles the comics business.
“I didn’t have any [Diamond] The team is because we don’t allow it, but I want to hear what they say and what we can do to solve the business. I just know how it currently runs it doesn’t work. From everything I have read and heard, there is not enough amount of labor involved. We don’t like selling $5 CDs and DVDs. We can’t make money. We want to sell a $20 product. This is a challenge because labor costs and freight costs just draw all the profits from them. We have a 95 cents rule – if we can’t get 95 cents to move in the warehouse, we have to limit the minimum because that’s the cost of bringing things through. ”
Asked about other outlets selling comics (mentioned Ollies), he said: “We will be willing to sell anywhere. As long as the check is cleared, we are happy to sell our products anywhere in the world.”
He also asked about the $33 million receivable he mentioned in his bankruptcy filings – which was the money that the comic shop owed diamonds. Although retaining inventory is a complex issue, “we want to collect these receivables. This is not a sudden forgiveness. From day one, you will negotiate.”
One aspect of sales is mixing products and updating diamond programs, and Ogilvie has given an answer that can respond to some of his research on diamond history. “We are not banks, we are distributors. Based on our previous history and experience, we hope to help [stores] Because we want them to sell more products. ”
Other matters:
- The Alliance has an ordering system for all products.
- When asked about the preview, Diamond’s huge iconic catalogue: “We need to understand a program first. It’s not our way or the highway. We have to figure out what works.”
- Ogilvie said in a partnership with retailers and Diamond’s past business ways that one of his employees went to a comic shop and heard a lot of complaints about the diamond program, “Today I was updated by that guy today, today I’ll tell me everything they’re talking about, so I’m sure we should try to understand and understand all of that.”
- On CGA, Diamond’s favorites rating service: “The overall range of operations is small. We didn’t visit or check it out. We had a learning curve for that. I was told that from a grading perspective, CGA was a little screwed up.”
- at the Free Comic Book Festival (not mentioned as part of the acquisition). Ogilvie doesn’t seem to know much, and the group members have to explain how it works. “I think all publishers offer free comic books? No free record days. Days with record stores. Diamonds are not a very profitable business. That’s why it goes bankrupt. If I don’t make it profitable, I’ll have a very grumpy bank and staff.”
- During the bidding process: “There are two bidders who want the whole company. Global wants only alliances, and some people want only diamonds, so they build a collaboration [This was Ad Populum, owner of Neco, Rubies, WizKids and several other companies.] Everyone was close at the beginning, but it separated and one had to drop out of school and we ended up being leaders. ”
- When bringing comics to music stores and vinyl comic stores: “Everyone stays in their driveway and they will feel comfortable, but we offer something like this and they are free to order what they want. If you are a record store, you will always be a record store. We will definitely offer it and promote it there.”
- When selling more physical products that can be collected: “We tend to be stronger in the collection space. We are called “one piece,” but there is something that lasts for value.
- Ogilvie didn’t mention all the documents at all on Overstreet, and he didn’t realize it. “We had a meeting with Diamond, and like tooth extraction, there were a lot of ‘that we couldn’t talk about.’” He mentioned that he had never met the Geppi family. “We don’t have the ability to talk to anyone in Diamond. After the court approval, we will talk to their own team of leaders. I have a lot of faith in having employees. I’ve been traveling a lot to Kentucky [site of Alliance’s warehouse] over the years.
- In retaining the diamond staff: “In any company, we have to have people who have relationships with suppliers and customers. If we lose them, we really fall behind. Now obviously over time, we kind of know who the good people are and who the bad people are. We won’t have a chainsaw from day one, it’s not our DNA, it’s not our DNA. I don’t even know how to do that.”
- At the SDCC booth in Diamond: Ogilvie saw it in some other asset purchase agreements and was told it was a big deal, so they made sure to include it. He said he did not plan to attend the SDCC. [IMHO, we’ll see!] The retailer asked him about the exclusive con products he didn’t realize, and he seemed interested in the idea.
After listening to Ogilvie discussing the purchase, McClay said most of it really boils down to. “It seems that the comics thing is not an important part of it at all.”
“No, no. It’s not 100%,” Ojivi replied.
My main point is that Ogilvie is a good businessman who says a lot of the right things. But as a good businessman, it’s clear that the Diamond’s comics industry is a shadow of its former self and the problem of how to distribute $5 product patchwork quilts to companies that don’t magically solve the range from a person in the garage to studio IP Farms.
That said, the alliance is rich in funding and has huge infrastructure, and when all their channels (from Walmart to small record stores) are integrated, you’ll see some interesting new synergies being explored.
If nothing else, most people who still have a deal with Diamond (except Marvel, DC and Image) may find it useful to go back to Diamond in a secondary separate way when all dust is removed under the new owner.
Also, as I keep warning people: it’s ultimately about toys and games. When they lost their comics business, Diamond moved to toys and games, which was a valuable business after all.
PS: For any Alliance Entertainment Person reading this, bring a small amount of salt with Dennis Barger. He is a character, he is our character, but he won’t even say the owners of a few comic shops.
